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  • Time to consider investing in fuel-saving technologies

    T&E's Nusa Urbancic writes in today's Financial Times: Sir, Your special report on oil and gas (March 21) highlighted renewed investor interest in biofuels and tar sand oil following recent rises in the oil price. But it failed to mention California’s low-carbon fuel standard or the European Union’s revised fuel quality directive, two recent regulatory developments that will have important implications for these alternative sources.

    [mailchimp_signup][/mailchimp_signup]These laws reward investments in low-carbon fuel technology and make it harder for carbon-intensive fuels such as those produced from tar sands, and most biofuel feedstocks to compete. Connie Hedegaard, the EU climate commissioner, has made it clear that tar sands will be subject to higher greenhouse gas “default values” when the final implementation guidelines for Europe’s fuel law are published later this year. The California standard already does this.

    Pressure is also mounting on biofuels. Current sustainability criteria in the fuel quality directive do not account for emissions from so-called indirect land use change (ILUC) but that should change when the commission rules on the issue this summer. Full carbon accounting for biofuels including ILUC should reflect the reality: that almost all biofuels available today are no better from a life-cycle emissions perspective than conventional fossil fuels.

    Investors looking beyond the current spike in oil prices would be smart to consider the long-term future of these fuels, especially as where California and Europe lead, the world tends to follow. A smarter bet would be to invest in fuel-saving technologies rather than “alternatives” that often create more problems than they solve.

    Nusa Urbancic
    Policy Officer, Low Carbon Fuel
    Transport and Environment