Rhein on Energy and Climate

Humanity consumes excessive amounts of energy,more than 80 per cent from fossil sources; and consumption is expected to keep rising by at least one third during the next forty years as global population will rise by another two billion people, all of whom aspiring living standards comparable to those of USA, Japan or Europe.

A rise of energy consumption in these proportions is unsustainable and will therefore not happen:

  • Conventional oil and gas will be phasing out. Shale gas or oil sands, whatever their reserves,cannot be a proper substitute because of environmental hazards, especially for ground water, and even more green house gas emissions. Coal should not be an answer because this will accelerate C02 emissions and climate change, unless large-scale use of carbon capture and storage.
  • Rising global energy demand will drive up production costs and prices, thus curbing consumption. This has become visible for oil and gas.

Before these developments were visible at the horizon, USA and EU from 2006 onwards, Brazil even earlier, have resorted to bio energies, considering them as a “green” tool to enhance energy security while reducing green house gas emissions.

To that end, they have put in place special support systems, in particular blending rules for gasoline and diesel. The EU has defined a 10 per cent blending ratio for 2020. This policy has generated an extraordinary boom of bio energy agriculture and industries, focused on sugar cane in Brazil, maize and soy beans in USA, and maize and rapeseed in the EU.

Brazil has developed the most sophisticated system: more than two thirds of its gasoline consumption comes from bio-fuels. Sugar cane offers an optimal C02 balance. Substituting fossil gasoline by bio- gasoline therefore makes some sense in terms of C02 emission and energy security. Moreover, Brazil possesses vast land reserves and afford setting aside some these for the production of bio crops. But even Brazil has to take into account land use change and deforestation.

The assessment of the US and EU policies is much less positive: Their green house gas emissions resulting from the cultivation of maize, soy bean, rape seed or sunflower crops, their transformation into bio-fuels and the use of NO2 and phosphate fertilizer for the cultivation easily exceed the carbon emissions from burning fossil oil/gas.

True, the EU requires bio energies to save at least 35 per cent and from 2017 on 50 per cent of fossil green house emissions. But who verifies the effective results in the myriad of agricultural and industrial establishments? And can this requirement take into account land use changes in distant Argentina, Brazil or Indonesia that export rising volumes of bio fuels to Europe. Worse, the USA, by far the biggest global producer of bio fuels, has not fixed similar environmental criteria.

Considering the additional green house gas emissions caused by the production of bio energies, the negative impact from maize monoculture on soil fertility and water availability, the negative impact resulting from land use changes and the impact of the increasing competition between bio energy and food crops upon the the global food supply it is clear that bio energies cannot be a sustainable substitute for fossil energies.

Presently, bio crops do not require more than some seven per cent of global grain acreage. But the USA converting more than 40 per cent of its maize crop into bio fuels may have reached a limit not to be overstepped. This has become clear in 2012 when the country suffered from the worst drought in half a century making it difficult, if not impossible to supply enough maize both for bio fuels and animal or human consumption.

With droughts becoming a more common phenomenon across the world, bio fuels will also cease to offer a better security of supply than conventional fuels!

Both the USA and EU therefore need an urgent review of their support policies for bio energies.

  • Bio fuels must no longer be regarded as an appropriate tool for reducing green house gas emissions. Wind energy, solar panels and above all higher energy efficiency are far more effective means for curbing green house gas emissions without damaging by-effects on nature and the environment.
  • Their production should therefore be phased out. The EU should start by halving its 10 per cent blending proportion. By the same token it should substantially tighten its car emission standards. By 2025 average fuel consumption should not exceed 4,3 liter/100 km!
  • The USA that should finally impose higher federal excise taxes on gasoline. The Obama Administration has just approved the highest ever fuel consumption standards, 4.3 liter/ 100 km, for which it deserves great praise.
  • Both EU and USA should – for once- take China as an example, which has banned the use of bio fuels.
  • The EU should step up research on second generation biomass production from algae and other plants not competing with food crops or fertile land.
  • The EU must urgently revise its cap and trade C02 emission regime so as to allow a much higher price of emission certificates. The present price of around € 8 per ton is far too low to constitute an effective incentive for reducing C02 emissions.

Brussels 30.08 2012 Eberhard Rhein


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