Rhein on Energy and Climate

Hardly noticed in Europe, India, China and Indonesia, the three biggest Asian countries, have most recently raised their gasoline prices. This unpopular measure had become necessary in view of rising world market prices, excessive budget subsidies or current account deficits.

The persistent preaching by the IMF against fossil fuel subsidies might also have had some influence on policy makers.

In Asia, transport represents the fastest rising source of energy consumption and C02 emissions. It was therefore timely for governments to look at the economic and environmental costs and help reduce consumption through higher fuel prices.

The latest measures taken by India and China raise their fuel prices (around € 1.0/litre) beyond those in the USA (0.74 €/litre) and closer to those in Europe (€ 1.3-1.5/litre).

For the two biggest, though still very poor countries on earth this is also a modest contribution to their fight against climate change, alongside their big investments in solar and wind power.

The FMI and and the Asian Development Bank should persist in preaching the abolition of all fossil fuel subsidies and, subsequently, the imposition of high excise taxes to compensate for the external costs of burning fossil fuels.

Fuel taxation should be on the agenda of the forthcoming international climate conference in Warsaw. Effective gasoline/diesel taxation, accompanied by strict fuel efficiency standards are simple and effective instruments for reducing C02 emissions.

There are still poor countries like Egypt which subsidise the gasoline price at € 0.45/litre though they can ill afford to!

It is high time for the UN-sponsored climate conferences to address the principal causes of climate change: road transport, fossil-powered electricity, fossil heating, air transport, deforestation and agriculture.

 

Eberhard Rhein, Brussels

 

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  1. This was as inevitable as eggs are eggs.

    Saudi Arabian Oil is running out as fast as any other and with the demise of the UAE oil and now Iran and Nigerian supplies coming to an end by 2050 and the huge demand for transport fuels from China, India, and the Phillipines and Indonesia what do you expect. They have to trim their subsidies in order to keep up with their debt portfolios.

    Mr Rhein well reported.

    Does this mean that you would support more robust approach to Renewable Fuels? The current issues in the Blending Regines focus on a Ratio of 10% (and it will almost certainly increase to 15 and 20% in the early next decade) BUT and a really BIG BUT this 10% (15% or 20%) rule is being flouted by the Oil Companies to prevent manufacturers making more available (including those such as a collegiate company in his position) where he can make as much of the Renewable Fuels as he can from Ligno-Cellulose sources and he has three projects ready to go but because of this stranglehold of the oil companies sticking to the limits and the fact that they blend at supply level centre the proffering (selling) of a larger quantity of these biofuels is met with a no sale.

    Are you aware of this Mr Rhein?

    I think not!

    What I suggest Mr Rhein is needed is a slight rethinking of the Directive words here and the posting of the fact that any fuel mixture (Renewable to Oil based) would be permitted and the 10% (155 or 20%) thresholds are just the recommended minimum which should be used only as the base. By changing this wording Mr Rhein, the Public, and the Tax Payers, would start to see a benefit.

    Here, Mr Rhein, is the issue in a nutshell! My friend’s company can make the Renewable Fuel Butanol for slightly more than €urocents 22 per litre. By the time makes its profit, and reapays its financiers, and then the Taxation Institutions receive their tax take, this fuel has a marketable value at the pump of €urocents 90 per litre! In a Blending Ratio of 10% the Public will not see any noticeable benefit. However now consider a series of different Blending Ratios, and the table below is given to give you some guidance.

    Renewable Fuel Blending Ratio……Assume Gasoline is €1-60 per litre
    …….Assume Butanol is €0-80 per litre
    .

    Butanol %………….Gasoline % Price Per litre at the pump
    5.75% 94.25%………. €1-554
    10% 90% ………. €1-52
    15% 85% ………. €1-48
    20% 80% ………. €1-44

    30% 70% ……… €1-36

    40% 60% …….. €1-28

    50% 50% ……. €1-20

    60% 40% ……. €1-12

    70% 30% ……. €1-04

    80% 20% ……. €0-96

    90% 10% …… €0-88

    95% 5% …….. €0-84

    And a 100% is possible

    If Mr Rhein you repeated these figures with the prices of Gasoline and Diesel in the UK or Belgium or Netherlands or Italy and Greece where the respective pump prices are over €2-00 per litre imagine the response. Imagine selling fuels these days for uses in cars at €1-20 a litre when the average prices were €1-70! If that was your company and garage selling this fuel you would have queue from here until Christmas 2030!

    I hope Mr Rhein you take this on board as I will ask my colleagues who sit in the EU to make contact with you over this issue for there are lots of reasons why you should be aware of this issue. They are being stopped in finalising their projects with financial imparts because there is an undertow of feeling that the system they use — nothing fancy — is the truth. Renewable Fuels need not be expensive nor heavily subsidised and there is the ability in the EU to supply over 75% of all raod transport fuel from renewable sources. this is real business Mr Rhein, and this will have a major effect on the perception of the Public in the Common Good over the EU as a result.

    I request that you take note,

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