Principles have been designed to help economies create jobs in a sector severely hit by the crisis.
The Biofuture Platform, a twenty-country, multi-stakeholder initiative, announced today the launch of a set of voluntary principles.
The principles have the support of the twenty Biofuture Platform member countries, and were developed following consultations with policymakers, industry experts and international organizations such as the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA) and the Global Bioenergy Partnership (GBEP).
One of the most labour-intensive energy industries, already employing around 3 million people worldwide, bioenergy is expected to play a key role in the decarbonization of the energy sector. However, it is also one of the sectors most affected by the COVID crisis. For example, earlier IEA analysis has estimated that transport biofuels production, expected to continue to grow before the crisis, could in fact decline as much as by 13% in 2020, the first decrease in output in two decades. At the same time, the IEA Sustainable Recovery plan shows that biofuels could be a very cost-effective way to create employment in the energy sector, as they have the second-largest number of jobs (15-30) created per million dollars of spending.
The Principles are non-binding and non-prescriptive, with member countries encouraged to implement them in accordance with broader sustainability initiatives and economic recovery programmes. A number of countries have already implemented or are considering new policies in line with the Principles.
These include Brazil’s RenovaBio and Canada’s Clean Fuels Standard programmes, which incorporate positive externalities of biofuels into market-based mechanisms. The US also recently revealed plans for a Higher Blends Infrastructure Incentive Program, to reinforce biofuel distribution infrastructure.
Other regions have also set ambitious targets. For example, India plans to scale up bioenergy use including 20% sustainable ethanol in gasoline by 2030 and the EU also has established policy ambitions to scale up advanced biofuels by 2030 in the Renewable Energy Directive (REDII).
Some countries have included sustainable fuels in their economic recovery measures. France announced an important support package to the airline industry, which incorporates sustainable aviation fuel targets.
Dr. Fatih Birol, Executive Director of the International Energy Agency (IEA), which facilitates the Biofuture Platform, commented on the development of the Principles: “Bioenergy is the overlooked giant of the renewable energy sector and will be paramount to a successful global energy transition. But its growth is currently not on track to meet sustainable development goals. It is critical that governments incorporate bioenergy in their COVID economic recovery plans, promoting jobs in the sector and ensuring its considerable potential does not remain untapped”.
Policymakers may apply the guidelines in relation to several sectors as they consider recovery packages. The impact of the crisis on the bioeconomy covers a range of industries, both directly and indirectly.
As transport accounts for significant share of green finance in recovery packages, funding targeted to innovation could link to the development of new bioenergy technology solutions for long distance transport and industry, which would in turn create jobs.
Globally, transport biofuel production should be considered. Whilst it reached a record 162 billion litres in 2019, or 2.8 million barrels per day, it is expected that production will contract by by 20 billion litres (13%) in 2020, returning to 2017 output levels. By comparison, prior to the start of the Covid‑19 crisis, output was anticipated to increase by a further 5 billion litres (3% y-o-y) in 2020.Additional opportunities lie in biogas and biomethane, gases which can play a key role in the transformation of the global energy system, ensuring resources are continuously used and reused to meet rising demand for energy services, while delivering wider environmental benefits. Realising the multiple benefits of biogas and biomethane requires co‑ordinated policymaking across energy, transport, agriculture, environment, and waste management.
The five Principles are:
1) Do not backtrack: Ensure continuity and long-term predictability of bioenergy, biofuels, and bio-based material targets and existing policy mechanisms that have proved successful;
2) Consider short-term COVID support for producers: Where appropriate, address short-term challenges for bioenergy and bio-based materials industries in the context of relief packages related to COVID-driven economic losses;
3) Reassess fossil fuel subsidies: Take advantage of a low oil price environment to reassess fossil fuel subsidies for a fairer playing field;
4) Build Back Better with Bio: Where appropriate, integrate the bioeconomy sector as part of broader recovery programmes, e.g. by requiring bioeconomy investments/targets as part of aid and recovery packages for specific sectors such as transport and chemicals; and
5) Reward sustainability: Integrate sustainability rewarding mechanisms into policy frameworks, promoting positive externalities in the production and use of bio-based fuels, chemicals and materials.