EU report says $8.86B investment required for 2030-2040 targets

In Belgium, a new report examines how advanced biofuels can contribute to reducing emissions in EU transport as part of the EU’s industrial competitiveness and decarbonization policy.

Advanced biofuels can be sustainably produced domestically, the report concludes, without dependencies for technologies and feedstock. EU-coordinated financial support for capacity development of essential industrial value chains would be necessary. It should cover industrial production development and feedstock supply mobilisation by farmers and feedstock aggregators.

According to the report, achieving EU targets will require a portfolio of complementary solutions for 2030-2040, made up from a diverse mix of technologies. This is needed so that the full range of eligible feedstocks can be used to produce the complete spectrum of necessary fuels.

Through developing business models of industrial value chains, the report estimates that financial support will be required to close the gap between the biofuels’ Levelised Cost of Production (LCoP) and the market price of their fossil fuel counterparts. By 2030, annual financial support to build industrial plants for biofuel production would need to range between €3.8 and €7.5 billion.

Additional annual support of €700 million to €1.25 billion would be required as a direct disbursement to farmers and aggregators for providing the necessary feedstock. Even higher level of support would be needed for deployment towards 2040. Existing EU funding schemes and instruments at EU level, such as the InvestEU, the Connecting Europe Facility, the European Regional Development Fund, and the Common Agricultural Policy Pillar I and II instruments, can incentivise industrial capacity building and feedstock supply.

Finally, the report stresses that financial measures should be complemented by administrative support. Better alignment between the Common Agricultural Policy and the Renewable Energy Directive would be needed, as well as improvements in registries and sustainability certification system.