Finnish Petroleum and Biofuels Association: Government energy targets challenging - transport sector plays a key role

Press Release 6 Oct 2015

The Finnish Petroleum and Biofuels Association believes that the Government Programme targets to halve the domestic use of imported oil and increase the use of renewable fuels in transport sector are bold and challenging. Achieving these targets requires action and decision-making, at both the EU and national level. It is vital that cost-efficiency and technology neutrality serve as the guidelines in striving to meet these targets.

The different oil usage sectors offer different possibilities for reducing the use of oil. The transport sector holds the greatest potential. On the other hand there has already been a considerable decrease in the use of oil for heating over the past ten years.

One of the Government´s spearhead project aims to use of carbon-free, clean and renewable energy in a cost-effective way. In transport this spearhead project will be achieved not only through energy-efficiency, but also the use of liquid biofuels, which already have a distribution network in place.

The Government Programme targets include halving the use of imported oil for domestic needs during the 2020s, encouraging the replacement of imported oil for heating with emissions-free, renewable energy alternatives and increasing the percentage of renewable fuels for transportation to 40 % by the year 2030.

Reference year essential, tax revenues to be considered

The Finnish Petroleum and Biofuels Association emphasises the importance of specifying a reference year for the target to halve the domestic use of imported oil. Oil use has declined by over 1.5 million tonnes over the past ten years. It would be natural to use 2005 as the reference year, as it is commonly used by the EU as the reference year when setting its climate and energy targets.

A rapid phasing out of oil heating would not be sensible or cost-effective. A natural pace for the phasing out of oil boilers and the continuously increasing energy-efficiency of oil heating match up very well with the timetable set for halving the domestic use of oil.

It is also important to consider the possible source of tax revenues equivalent to those currently generated when reducing the domestic use of oil. A significant amount of tax revenues and supply security fees are currently collected from petroleum products.

Special Finnish conditions to be considered

"Finnish Petroleum and Biofuels Association companies are heavily involved in building a sustainable energy future, by acting responsibly, producing high-quality liquid biofuels and also developing new solutions," states Managing Director Helena Vänskä. According to Vänskä, it is not enough that companies producing biofuels invest more in the production of renewable fuels, but rather that there should be increasing market demand to cover growing production and product offerings.

"It is here that we need cost-effective and technology neutral tools and guidelines to ensure sufficient demand. In addition to this, we must also ensure that EU policies take Finland's special conditions into consideration and not throw up legislative roadblocks to the production of advanced biofuels," notes Vänskä.

Finland must actively influence at the EU level - national measures support long-term policies

The Finnish Petroleum and Biofuels Association believes that Finland should actively and consistently influence EU policy and legislation that has an impact on the operating environment of the biofuels sector. The aim should be to prevent any elements from the EU that would compromise the operating environment or distort fair and equal competition in alternative sources of energy and power.

According to the Finnish Petroleum and Biofuels Association, Finland needs national measures that support long-term policies, which generate demand for biofuels as well as predictability and assurance for companies to invest in new biorefineries.

The Finnish Petroleum and Biofuels Association proposes, among others, the following measures and decisions for concrete implementation:

EU level

  • Biofuel targets for 2030 and promotion: e.g. an extension of the Fuel Quality Directive (FQD); a separate target for renewable energy in the transport sector; including biofuels in the range of policy tools "at the highest level" as one concrete solution; a common Nordic market for low-carbon transport
     
  • Facilitating the use of higher bio-content fuel grades: e.g. the standardisation of higher contents, such as E20; internal market issues
     
  • Ensuring an adequately large raw material base for biofuels: e.g. extension of the Indirect Land Use Change (ILUC) Directive post-2020 and its interpretation; the Circular Economy Package and the definition of recycling under the Waste Framework Directive; sustainability criteria for solid biomass
     
  • Harmonisation of EU-level control measures, including taxation: e.g. Re-introducing the Finnish equal and progressive tax model for transport fuels for consideration as a common EU model; amending EU minimum tax legislation or allowing exemptions from tax legislation for biofuels

 

National level

  • Initiate discussions as quickly as possible on how to increase the use of renewable energy in transportation after 2020
     
  • Equal and technology neutral control measures: e.g. vehicle and fuel taxation and emissions accounting, which includes "transport taxes for transport”, i.e. the same energy content calculation for all transport fuels and adjustment of exemptions remaining in the current tax model. In addition, equality in accounting, i.e. electric vehicle CO2 emissions are not "zero", but rather depend on the method used to generate electricity. Emissions accounting should take into consideration emissions generated by both fuels and vehicles, i.e. the "well-to-wheels" chain, also developing vehicle taxation based on this.
     
  • Measures for increasing the demand for biofuels: e.g. a target/obligation for increasing the use of renewable fuels in accordance with the low-carbon programmes of large cities, for example: in bus traffic; in promoting the use of higher bio-content fuels in heavy transports in fleet use; in the administrative approval of ethanol conversions for older, petrol-fuel vehicles

Seminar addressed the future of energy

Held on 6 October, the Finnish Petroleum and Biofuels Association addressed the Government Programme targets as well as, more broadly, the future of energy. The seminar was opened by Industrial Counsellor Timo Ritonummi fo the Ministry of Employment and the Economy. He presented an overview of the energy outlook for Finland and the EU in 2030. Principal Scientist Juhani Laurikko of VTT presented a study, which examined ways to achieve a 40% reduction in carbon dioxide emissions produced by transport. Senior Researcher Bjart Holtsmark of Statistics Norway opened a discussion on Norwegian support and subsidy policies for electric vehicles.

 

Further information: Finnish Petroleum and Biofuels Association, Managing Director Helena Vänskä, tel. +358 (0)40 581 6786

Contact information for communications: Communications Manager Mervi Tepponen, tel. +358 (0)40 562 1060, firstname.lastname@oil.fi

 

Finnish Petroleum and Biofuels Association is the collective industry association that represents the interests of its members.  The mission of the Association is to actively promote responsible use of liquid fuels and contribute to a sustainable energy future, while forging a favourable operating environment for it´s members. The Oil Industry Service Centre Ltd, owned by the association, executes the energy efficiency agreement Höylä III and carries out industry-wide environmental and education projects. Website www.oil.fi

 

Finnish Petroleum and Biofuels Association | Unioninkatu 22 | 00130 Helsinki  |  Finland  | office@oil.fi