Eurofuel Newsletter #2

Dear reader,

Welcome to the second EUROFUEL newsletter of 2024. This month, we want to share with you an outlook on the EU debate over the future of the energy transition. We will also deep-dive into the attempts to reconcile the climate ambitions set in motion in the past five years with the rediscovered imperative to promote a more competitive European economy.

With the mandate of the current Commission coming to an end and the last pieces of the Green Deal finally falling into place, the focus in Brussels is increasingly shifting to the future and what comes next. On the one hand, the Commission has set in motion the process by outlining its ideas for a new green agenda with the publication of the Communication on the 2040 climate target, which suggests potential pathways to reach a 90% emission reduction target beyond the current legislative framework. On the other hand, European industrial leaders have also decided to throw their hat into the fold with the Antwerp Declaration, a high-level platform advocating for a new Industrial Deal that would refocus the EU efforts towards competitiveness through new investments and reduced red tape. Meanwhile, the various political groups have developed their own electoral wish lists, awkwardly trying to balance a claim to the legacy of the Green Deal while at the same time catering to the growing tide asking for a more pragmatic approach to the energy transition.

In the midst of this shifting political landscape, it is paramount that we remain vigilant to ensure that low-carbon liquid fuels remain a key part of the debate and that our industry is seen as a key contributor to the EU sustainable competitiveness.

Dr Ernst-Moritz Bellingen



Building Energy Performance

Looking beyond 2030: the EU 2040 Climate Targets

With the final adoption of the Energy Performance of Buildings Directive (EPBD) by the Council on 12 April, all the key files for the heating sector of the Fit for 55 package are now in their implementation phase.
Nevertheless, this does not mean that the work in Brussels is done, with the Commission already starting to prepare for what comes after. On 6 February, the Commission published its non-binding Communication on the EU 2040 Climate targets, calling for a 90% net greenhouse gas emissions reduction compared to 1990 levels. The target is meant to serve as a stepping stone between the bloc’s 2050 climate neutrality goal and its 2030 emissions reduction target of 55%.

Overall, the Communication limits itself to provide generic indications regarding the specific paths and sectors that will require further actions to achieve the target. However, it mentions the core pillars the next Commission should focus on to achieve the 90% reduction, including:
• fully implement existing EU laws to reduce emissions by at least 55% by 2030.
• decarbonise the industry by relying on existing strengths like wind power, hydropower, as well as technologies that can capture and store carbon, and re-use it (CCUS).
• increase domestic manufacturing in growth sectors like heat pumps, batteries, electric vehicles, solar cells, and others.
• keep fairness, solidarity, and social policies at the core of the transition, helping vulnerable citizens, regions, businesses and workers through tools such as the Social Climate Fund and Just Transition Fund.
• have an open dialogue with all concerned, including farmers, businesses, social partners and citizens.

Heating is barely mentioned, with most of the focus given to industrial decarbonisation and manufacturing of green tech. That said, the decarbonisation of the energy system features prominently in the background as the main enabling factor. Unfortunately, electrification remains listed as the main driver of the energy transition, with low carbon and renewable liquid fuels relegated to a mere citation as part of the phasing out of fossil-fuels. Nonetheless, the recognition of the role that low-carbon fuels can play in the decarbonisation of transport does leave room for hope, especially in consideration of the changing narratives in favour of a stronger commitment to technology neutrality in the name of competitiveness.

To this end, we aim to work tirelessly in the coming months to ensure that the next European Commission adequately considers the role of sustainable low-carbon liquid fuels under the RED framework in meeting the 2040 targets. All low-carbon energy vectors must remain on the table to enable the rapid decarbonisation of European households.


European industries call for a new Industrial Deal while von der Leyen launched her bid for a second term


In a move that signals a significant shift in the European Union's approach to industrial strategy and climate ambitions, a coalition of over 688 companies and 253 industry associations (as of April) presented the Antwerp Declaration to EU leaders. This declaration is a rallying cry for a European Industrial Deal that not only complements the EU's Green Deal but also addresses the pressing need for economic revival and strategic autonomy.
The Antwerp Declaration outlines an actionable ten-point policy recommendation aimed at reinvigorating Europe's industrial sector while maintaining a commitment to climate neutrality. Key proposals include simplifying regulations, increasing public funding for clean technology, ensuring competitive energy provision, improving infrastructure, securing access to raw materials, and fostering the development and promotion of net-zero products. The signatories emphasise the need for a revitalised Single Market and advocate for more intelligent innovation frameworks. They also propose the appointment of a First Vice-President to ensure the Industrial Deal is implemented in line with the next Commission's agenda. These measures are envisioned to bolster Europe's resilience, sustainability, and competitiveness on the global stage.

In tandem with this industrial push, Ursula von der Leyen, President of the European Commission, is threading a delicate balance as she seeks re-election. Her campaign strategy reflects a nuanced recalibration of climate policies, aiming to be more accommodating to industry needs without backpedaling on environmental goals. Von der Leyen is poised to maintain the European Green Deal as a cornerstone of her agenda, yet there is a clear pivot towards balancing environmental commitments with the economic and security concerns that resonate with the electorate and political leaders.

The European People's Party (EPP), which counts von der Leyen among its members, has recently showcased its support for this balanced approach. The party has chosen not to oppose the EU's ban on the sale of combustion engine vehicles from 2035, illustrating a convergence of environmental and industrial visions. The EPP's election manifesto pledges to further develop the European Green Deal, framing it as the key to a prosperous, competitive, and sustainable future for Europe. This stance is in sync with von der Leyen's vision and signals a shift within the EPP, which now sees the Green Deal as an integral part of their policy platform. The manifesto underscores the importance of setting emission reduction targets while also calling for innovation from both private and local entities, suggesting a preference for incentivising technological solutions rather than imposing outright bans on polluting technologies.

As Europe navigates this ongoing shift towards a more industry-centric policy landscape, the Antwerp Declaration and von der Leyen's re-election bid serve as critical signposts. They indicate an ongoing effort to balance industrial policy with climate ambition. This shift in attitude could be a headlight towards fostering a renewed and more pragmatic approach to low-carbon liquid fuels, recognising their potential role in a diversified energy mix and as a stepping stone in the transition to a fully renewable energy future.

The coming months will be pivotal in determining how this balance will be struck and what it will mean for the future of Europe's industry and environment, as well as for the advancement of sustainable fuel alternatives.


Eurofuel welcomed European Parliament´s EPBD approval

Eurofuel, the European Liquid Heating Fuels Association, welcomed the European Parliament's adoption of the Energy Performance of Buildings Directive (EPBD) at its first reading.

This landmark decision underscores a pivotal step towards a more sustainable future for residential buildings across the European Union.

The EPBD's main provisions, including the ambitious targets for reducing primary energy consumption in residential buildings, mark a significant stride towards achieving our shared climate objectives. Eurofuel applauds the commitment of member states to ensure a reduction in the average primary energy usage by at least 16% by 2030, with even more ambitious targets set for 2035.

The directive places a great emphasis on decarbonising heating systems. Eurofuel is in full support of the proposed measures that aim to phase out the use of fossil fuels in heating and cooling by 2040. Additionally, the ban on subsidising stand-alone fossil fuel boilers starting from 2025 is a crucial step towards prioritising cleaner and more sustainable alternatives.

Eurofuel recognises the importance of incentivising the adoption of hybrid heating systems, which leverage renewable energy sources alongside traditional heating methods. We believe that such systems, including those combining boilers with heat pumps, offer a pragmatic approach to achieving both energy efficiency and environmental sustainability in residential buildings. Moreover, with the help of green fuels, buildings can also achieve climate targets with oil heating.

´As an association committed to promoting the interests of the heating oil industry while advocating for environmentally responsible practices, Eurofuel stands ready to collaborate with policymakers, industry stakeholders, and consumers to facilitate the transition towards cleaner and more efficient heating solutions´, says Federica Miano, Secretary General of Eurofuel.


Germany´s Green Fuels Ready Label stands for future-proofing 


GREEN FUELS READY Produktlable CMYK page 0001

The amendment to the Building Energy Act, which came into force on 1 January 2024, therefore provides for new heating systems to be operated proportionately with renewable energies in the future after certain transitional periods following modernisation. The Green Fuels Ready label identifies heating systems, tanks, and components that have been approved by the manufacturer for use with up to 100% renewable fuels.

The requirements of the German Building Energy Act are an important step towards climate-neutral buildings by 2045. Condensing boilers for liquid fuels can also meet these requirements. In addition to the combination with a heat pump as a hybrid heating system, the use of renewable fuels, so-called green fuels, is also possible.

The requirements can be met in several ways: If you opt for a new condensing boiler, using a liquid fuel with the appropriate renewable content is a good option. If combined with a solar thermal system for heating and hot water, the solar heat generated will count towards the required renewable quota. Condensing boilers combined with electric heat pumps as hybrid solutions are particularly economical. The energy stored in the tank ensures that peak loads are covered on cold days and provides a reliable heat supply. However, saving energy by insulating buildings is, and will continue to be, sensible. This further reduces the need for green fuels.

The Green Fuels Ready label provides valuable guidance for heating modernisation projects. Manufacturers can use it to label heating systems, tanks and components that can be operated with up to 100% renewable liquid fuels, including mixtures with fossil liquid fuels. The label was created by the Federal Association of the German Heating Industry (BDH) in cooperation with en2x - Wirtschaftsverband Fuels und Energie.


Switzerland has a new CO2 Act without strict bans on oil heating 


In 2021, the existing CO2 Act of 2011 was revised in Switzerland and heavily criticised as it contained rules that would have been equal to a ban on oil heating. Various planned measures would have significantly increased the cost of fossil fuels and heating oil, which was unpopular with the citizens. A referendum was held, and the law was rejected.

In March 2024, a revised version of the CO2 Act was passed in the Swiss parliament and will come into force in 2025. This time, a referendum and a national vote are not expected. During the drafting of the law, points were constantly weakened or deleted, as there was a fear that a referendum would otherwise be held again. The result is now a fairly harmless law that does not provide any new national rules in the heating sector. In the area of mobility, too, only minor adjustments have been made to the existing law.

One positive aspect is the support for renewable liquid fuels. In aviation, Switzerland is adopting the blending quotas for SAF (Sustainable Aviation Fuel) from the EU, and eFuels can now also be counted towards the emission values for vehicle fleets. Unfortunately, renewable heating fuels are not included in this law. As there is now no national regulation for the whole of Switzerland, the energy directors of the cantons have published a new model regulation as a result, which is to serve as a template for the cantons' local energy laws. In the published draft, they recommend that the cantons write a ban on new gas and oil heating systems into law as soon as possible, but by 1 January 2030 at the latest.

Renewable fuels such as biodiesel, HVO, or biogas are not mentioned or accepted at all, as the energy directors do not want these fuels to be used for heating. In contrast to the energy directors' negative attitude towards renewable fuels, the Federal Office for the Environment is currently working intensively on setting up a register for certificates of origin for renewable fuels.

From 1 January 2025, this should enable biodiesel and HVO to be officially counted as renewable energy for heating. There are already some cantons with bans on new oil heating installations in their energy laws, but other cantons can still be convinced that renewable fuels and hybrid systems need to be integrated into their energy laws. It is now important for the heating sector to show that renewable fuels are a working solution that should not be forgotten in the future energy mix.