Published on September 05, 2023 on our customer app
The Ministry of Infrastructure just opened a consultation about two major changes for 2024, a transitory year before a full revision of the biofuels policy.
Greening mobility faster
The government wants to support a faster development of renewables in transport. Currently enforced at 19.9% e.c, the blending mandate is proposed at an unexpected 28.4% e.c. This sudden – huge – increase of support is motivated by the anticipation of the system reform in 2025, when “much more renewable fuel will be needed”. It is based on a governmental decision made few months ago to make “20 PJ of additional renewable fuels available in road traffic”.
The government wants to dynamize the HBE system, as “there are signs that the market instrument no longer functions as such, because the annual obligation is low in relation to the production of renewable energy. The falling price for HBEs is an important indicator of this.”
Objective to balance between road and shipping
As reported by SquareCo in October 2022, the plan to halve the shipping ratio was aborted due to a lack of anticipation. This time, the government is willing to act to counter-balance the flow of HBE-G generated by the shipping blending of 9A biodiesel. It proposes to cut the sector multiplier from 0.8 to 0.4, so the same quantity of 9A Fame would generate only half the amount of HBE-G it currently does.
This announcement is not a surprise, as the government expressed several times its desire to fix the unbalance between the road and the shipping sector, before a specific maritime target is designed (most likely from 2025).
Once again, the Dutch government reacts to the market conditions with pragmatism and radical measures. If confirmed by Q4-23, both proposals will sustainably support HBE certificate prices, even if the shipping sector continues to blend the same amounts of 9A biofuels. The government made its costs calculations (EUR 388 million split between 39 obligated companies) using a HBE price of EUR 10, about double as the current price.
We’ll update our NL forecasts later today.
Three new 9A feedstocks proposed
The government wants also to specify further the list of 9A feedstock by adding three new definitions, as mentioned below. Those may have been used already under other letters, but the government wants to provide more transparency to waste streams used for biofuels production.
Velasse is released when soybean meal is processed into soy protein isolate, a raw material for meat substitutes, consisting of water (70%), sugar (10%) and smaller amounts of ash, protein and fat. Only product with max 12% sugar content would be eligible.
Waste water from the paper and cardboard industry is used to remove short cellulose chains and contaminants from the paper. This is a stream with a very low concentration of cellulose, which makes it illogical to classify it under Annex IX-A, sub p (other non-food cellulose material), of Directive 2018/2001/EU. If the flow is not treated anaerobically, the flow would be discharged into the sewer.
Wastewater from the food industry is created when washing fruit and vegetables and when rinsing equipment. Organic residues contained in the rinsing water can be purified anaerobically, and thus create biogas. By speaking of rinsing water instead of wastewater, it is better framed that it is not a water flow that is released from an industrial process, but water that is used for rinsing.