IEA proposes global green seal for fuels – 10/01/2024 – Market

The IEA (International Energy Agency) presented two reports during the G20 meetings that propose a global certification system for sustainable fuels, considering both direct greenhouse gas emissions and those generated by land use.

The idea is to apply a sustainability seal to each fuel in grades ranging from A to E, in a similar way to the energy efficiency seal used today on household appliances. As a result, the mechanism could be easily assimilated by society — both by investors, to decide on the investment of resources, and by the general population, when refueling vehicles, for example.

The details are in the text Carbon Accounting for Sustainable and in its expanded version, the Towards Common Criteria for Sustainable Fuels, presented by the agency at the day’s events.

The proposed mechanism aims to unify concepts and facilitate the trade of biofuels internationally. The organization highlights ethanol, identified as the biofuel in commercial use that most quickly meets demand and reduces emissions.

The IEA also encourages the adoption of different sustainable options that exist today, even if they are not perfect, and says that the respective emissions can be even lower over time as long as the appropriate investments are made.

The AIE studies on the topic were commissioned by the Brazilian government, which saw the conclusions as positive for the national market. According to representatives of the Lula administration (PT), the agency’s vision dismantles the thesis used mainly in Europe that biofuels are not that beneficial for decarbonization, and that some of them would lead to deforestation or compete with food production.

For the AIE, although change in land use may be important, it must be managed through separate policies — and not analyzed together with direct emissions. The goal is to avoid placing the entire burden of the transition on those who are investing in clean technologies.

“The agency’s understanding was a great victory”, highlighted Heloisa Esteves, director of Studies, Oil, Gas and Biofuels at EPE (Energy Research Company), a state-owned company linked to the MME (Ministry of Mines and Energy).

Esteves reinforces that the Biofuels Situational Analysis, released by EPE in August within the “land saving” principles (which aim to maximize the use of land already explored), shows that there is a high potential for expanding production in Brazil of biofuels without the risk of competition with food production.

According to the text, the additional production of biofuels in the country, just with the recovery of degraded arable and potentially mechanizable pastures in Brazil, was estimated at around 8 billion liters (equivalent to almost a quarter of current production).

The business sector agrees with the perception that the topic, with strong political content, is advancing from a technical perspective through a relevant international organization.

“The agency legitimizes that Brazil has a replicable solution in ethanol, and I understand that it is an ally in bringing technical elements to a discussion that has a lot of geopolitics and energy security for the countries”, he told Sheet André Valente, director of sustainability and ESG at Raízen, who has been following the discussions

Today, existing disagreements begin with the nomenclature — with wide variations on what exactly constitutes a sustainable fuel. Terms such as “green”, “blue” or “advanced” are used around the world, but without an international consensus on their respective meanings and without accurate emissions data.

Among the standardizations that the organization defends is that the calculation of emissions not only considers the production of the fuel — but also transportation and distribution, as these steps can significantly contribute to changing the numbers (as in the case of hydrogen) .

Furthermore, it suggests that the emissions limit for a fuel to be considered sustainable be at an intermediate level. For the agency, this level must be low enough to promote ambitious goals — but not so much that it makes initiatives unfeasible, especially in countries that cannot afford almost zero-emission fuels.

Paolo Frankl, head of Renewable Energy at the IEA who presented the report at the G20, says setting overly ambitious limits from the start could limit technological diversity, increase transition costs and even slow emissions reductions.

The main example is green hydrogen, a clean technology — but still very expensive. “In the short term, the biggest problem hydrogen faces today is creating demand, creating economies of scale and decreasing the cost of electrolysis. Therefore, the criteria must be applied carefully and thoughtfully over time,” he says.

Therefore, he defends the use of biofuels even if they still emit some CO2. “Should legislation allow the residual use of fossil CO2? In the long term, no, because this would no longer fit into a zero-emission situation. But in the short term, during the transition, yes,” he stated.

The agency suggests a set of five levels to be applied to different biofuels using carbon dioxide emissions as a basis, ranging from zero at level A (the cleanest) to a maximum value of 50 grams of CO2 equivalent per megajoule (gCO2-eq /MJ) at level E.

Frankl, from the IEA, says he hopes that the G20 and COP30 (United Nations Climate Conference) will continue to place biofuels as a priority in the coming years. He suggests that the labeling system be developed and tested to build a global system of its kind by 2030 or 2035.