Assessment of Initiatives to Facilitate and Secure the Introduction of Alternative Motor Fuels in the European Union

Project details

PREMIA

Assessment of Initiatives to Facilitate and Secure the Introduction of Alternative Motor Fuels in the European Union
© Free Foto
Funding: European (6th RTD Framework Programme)
Duration: 06/04 - 06/07
Transport Themes: Environmental impacts (key theme).
Innovative technologies
  • Outline
  • Funding
  • Results
  • Documents
  • Contact
Background & policy context: 

The European Commission has set the objective to substitute 20% of motor fuel consumption by new and alternative fuels by the year 2020. Three categories of fuels are envisaged: biofuels, natural gas and hydrogen.

There are many constraints for a market introduction and large-scale application of these fuels. In any case big efforts will be needed to reach the objectives of the European Commission.

Certain alternative fuels are closer to market maturity than others. Biofuels could achieve market maturity rather soon (at the time of this project it was estimated up to 2010), while hydrogen is much further away from market maturity (estimated up to 2020). So the actions to secure their market introduction may require different approaches.

Although a general European approach is most obvious, country specific conditions and constraints may require different approaches in different countries. The strategy to introduce alternative motor fuels is best adapted to the specific country legislation, the available resources (e.g. land for biofuels), supply opportunities and available energy sources and available infrastructure.

Objectives: 

The objective of the project was to investigate the cost effectiveness of measures to support the large-scale introduction of alternative motor fuels and alternatively fuelled vehicles in the EU15 and the Candidate Countries, in relation to the market maturity of the technology and the country dependent situation.

The focus was on biofuels, as a ready-to-market alternative fuel, and hydrogen as a fuel further away from market maturity. Current and past initiatives to facilitate and secure the market introduction of alternative motor fuels (R&D support, demonstration actions and direct incentives) would be evaluated for their role in the process towards market introduction of alternative motor fuels.

Methodology: 

The following methods have been employed:

  • literature review: state of the art of AMF, development of indicators;
  • local workshops: national boundary conditions for introduction AMF and policy measures, dissemination;
  • expert interviews: effectiveness of ongoing and past RD&D, incentive programs;
  • international workshops: international cooperation on assessment framework, dissemination;
  • modelling: Scenario calculations for the introduction of AMF in the EU and policy recommendations.

PROJECT WORK PACKAGES

  • WP1: Technological status and prospects of AMF.
  • WP2: International incentives on AMF.
  • WP3: Assessment of long-term options in the EU-Hydrogen.
  • WP4: Assessment of short-term options in the EU-biofuels and large scale natural gas.
  • WP5: Country specific situations.
  • WP6: Scenario calculations for EU-15.
  • WP7: Policy issues.
  • WP8: Dissemination.
  • WP9: Project Management
Institution Type: 
Institution Name: 
European Commission
Type of funding: 
Key Results: 

Common assessment frameworks for research, development and demonstration were introduced, and national incentive programmes that can facilitate the market introduction of alternative motor fuels were developed. These tasks have been completed by conducting local and international workshops, expert interviews or scenario calculations for the introduction of biofuels in the EU.

The project analysed the production and consumption of biofuels, price evolutions (both for fossil and biofuels), feedstock production and the active policy measures and market conditions in different Member States. Also the experiences gained all over Europe were described. This work has enabled the evaluation of the most important key drivers for biofuel support for the future as well as the conditions that influence a Member State’s potential and interest in producing and consuming biofuels.

PREMIA has grouped countries based on their economic strength, their energy situation and their natural suitability of growing bioenergy crops as well as on the importance of the agricultural sector for the economy. Additionally, scenarios for 2010 and 2020 were assessed. The use of biofuels was estimated for each country, taking into account the impacts of biofuel production on the energy and agricultural markets (e.g. through increasing feedstock prices).

Technical implications: 

The PREMIA project presented a common assessment framework for demonstration actions of alternative motor fuels in transport. First focus is on hydrogen demonstrations, but also other fuels like biofuels or natural gas can be addressed. The assessment framework is an important tool for follow-up of the progress within the initiative itself, but also for society and policy makers, because the results indicate where current and future strengths and weaknesses of the technology are, and in which field further progress and public support is still needed.

As the need for alternative fuels and technologies in transport is emerging, it is important to follow up the progress and potential of new technologies towards market introduction. Demonstration projects can be an effective way to gain experience and demonstrate the feasibility of the technology. By using a consistent assessment framework these projects can indicate where current and future strengths and weaknesses of the technology are, and in which field further progress and public support is still needed. The learning process from different initiatives can be optimised by using a common way to collect data and to assess the results. The PREMIA assessment framework is used as a basis for new European projects demonstrating hydrogen and biofuel use in transport. The common methodology can help towards intercomparison of project results and to build consistent conclusions.

The assessment framework focused on the three main steps in the AMF pathway: fuel production, distribution and end-use. The framework consists of a technical part and a socio-economic part. Technical categories are directly technology related, such as technical performance, environmental impact, cost and safety & regulations. Socio-economic evaluation is more generic and focuses on awareness rising, acceptance, energy security and socio-economic impact.

The listing of indicators was a guideline for AMF demonstration projects. The extensive list of indicators and underlying components can be regarded as different modules which can be integrated in the data collection process. Some evaluation categories are basic (most parameters on technological performance, energy use, cost, safety, project visibility), other evaluation categories like harmful emissions, LCA calculations, socio-economic studies, may only be part of the project if specifically mentioned in the project description.

Policy implications: 

In order to implement biofuels in the most cost-efficient way and to optimally affect security and diversity of fuel supply, an overall European approach is fundamental. Country policies need to be further streamlined within a European context.

The experiences in Member States with high shares of biofuel consumption – Germany, Sweden, France and Austria – reveal that a mix of policies is necessary in order to successfully stimulate the biofuel market. A successful policy mix needs to simultaneously:

  • create stable 'technical' preconditions, such as fuel standards, fuel availability and compatibility with engines;
  • create a financial or regulatory framework that reduces the final consumer prices of biofuels to that of fossil fuels;
  • create long-term investment security for investors.

Future biofuel support policy will need to be adapted to the situation of larger volumes being involved. It will therefore have to focus on:

  1. The most efficient policies and measures to promote biofuels. So far, subsidies through (partial or total) tax exemptions (complemented by other measures) have proven to be the most successful instrument in creating a market niche for biofuels. This has been the case particularly in countries with high taxes on fossil fuels, where the tax exemption could compensate the higher production costs of biofuels. While tax exemptions seem to be one key instrument in creating a niche market for biofuels, they may be too expensive for achieving high shares of biofuels. Therefore, a number of Member States recently changed to obligation systems.
  2. Measures to influence the composition of biofuels and underlying production pathways in order to better meet the dominant objectives of a biofuel policy. Such measures are particularly important to complement e.g. an obligation scheme, which tends to favour lowest-cost biofuel options. While supply side measures have had a limited impact until now in developing market demand, they may be an appropriate tool to steer a growing biofuel market in the desired direction.
  3. Combining national and EU biofuel policies is important to create long-term investment security. At the moment, progress in implementing a biofuel support policy varies substantially among Member States, as do the production and consumption volumes. In recent years, however, more Member States have introduced an active biofuel support policy and developed domestic production capacities. Despite di
Partners: 

Belgium
Vlaamse Instelling voor Technologisch Onderzoek (Flemish Institute for Technological Research); Joint Research Centre

Greece
Centre for Research and Technology Hellas; South East European Transport Research Forum

Finland
Valtion teknillinen tutkimuskeskus (VTT Technical Research Centre of Finland)

Contact Name: 
Mr Luc Pelkmans
Contact Email: 
Organisation: 
Vlaamse Instelling voor Technologisch Onderzoek (VITO)
Address: 
Boeretang 200
Zipcode: 
2400
City: 
MOL
Contact country: 
Belgium
Telephone: 
+32 14 33 58 30
Fax Number: 
+32 14 32 11 85
Link to CORDIS information: