EU Renewable Energy Targets in 2020: Transport Scenarios JEC Biofuels Programme A joint study by JRC / EUCAR / CONCAWE GAIT Turkish-EU partnership for Sustainable Transportation Session A. Green and Balanced Transport/ (d.) Alternative fuel options Istanbul, 8-9 October 2015 Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 1 of 16 Overview • The European Commission’s Joint Research Centre (JRC) • The JRC-EUCAR-CONCAWE (JEC) research collaboration • 2014 scenario-based analysis of alternative fuels’ uptake in Europe 2020 Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 2 of 16 The European Commission’s Joint Research Centre Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 3 of 16 JRC Role… Identifying and characterising low-carbon technologies’ prospects - economics - contribution to Europe's policy goals via Techno-economic assessments and modelling activities of Energy and Transport developing and operating experimental activities, mathematical models, methodologies simulating the evolution of the European energy and transport technology mix analysing the transition towards a low-carbon society. Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 4 of 16 JEC: A short history… The JEC research collaboration was initiated in 2000 by: JRC: Joint Research Centre of the European Commission EUCAR: European Council for Automotive R&D CONCAWE: the oil companies' European association for environment, health and safety in refining and distribution 2000-2014: Projects Completed Well-to-Wheels (WTW) Studies: Version 1 (2003) Version 2a and 2b (2007) Version 3c (2011) Version 4 (July, 2013): WTT and TTW Reports and Appendices Version 4a full set of reports: WTT/TTW/WTW and Appendices (March 2014) Impact of ethanol on vehicle evaporative emissions (SAE 2007-01-1928) Impact of oxygenates in gasoline on fuel consumption and emissions (2014) JEC Biofuels Study for a 2020 time horizon (May 2011) 2014 update of the 2011 JEC Biofuels Study (April 2014) 2015-2017: On-going projects Well-to-Wheels, Version 5 JEC Alternative Fuels Study Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 5 of 16 Introduction and Disclaimer The JEC Biofuels Programme is a technical analysis intended to assess possible renewable fuel implementation scenarios in the light of the EU “Renewable Energy Directive”, “Fuel Quality Directive”, and “Indirect Land-Use Change Directive” in the transport sector by 2020. These scenarios have been assessed by modelling (JEC Fleet & Fuels model) and other analytical tools. Disclaimer: This study is not intended to commit the JEC partners to deliver any particular technology or conclusion included in this study. For a full description of activities, please consult reports available at: http://iet.jrc.ec.europa.eu/about-jec Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 6 of 16 Introduction: EU Regulatory Framework • Renewable Energy Directive (RED) [Directive 2009/28/EC] • • • Fuels Quality Directive (FQD) [Directive 2009/30/EC] • • • • 7% cap on conventional biofuels counting towards the RED and the FQD targets 0.5% non-binding target for advanced biofuels Multiple counting for categories of advanced feedstocks Feedstocks of non-biological origin count towards the target Vehicle Regulated Emissions • • • Requires fuel suppliers to achieve at least 6% greenhouse gas (GHG) saving from fuels supplied in 2020 with indicative targets For GHG saving from biofuels, the actual GHG saving per energy unit is considered when given by supplier. In other cases the default GHG values given by FQD1) Specifies an E10 main grade with E5 ‘protection grade’ for older vehicles Indirect Land Use Change Directive (ILUC) [Directive 2015/1513] • • • • • Requires Member States to meet 10% renewable energy share in the transport sector by 2020 Requires sustainable cultivation and production of biofuels as well as minimum greenhouse gas (GHG) savings per energy unit Light-duty (LD) passenger cars: Euro 5/5b to 2014, Euro 6 from 2015 onwards Heavy-duty (HD) vehicles: Euro VI from 2014 onwards Vehicle CO2 Emissions • • Reproduction permitted with due acknowledgement Passenger cars: new vehicle fleet average 130 gCO2/km by 2015; proposal for 2020 was 95 gCO2/km Light Commercial Vehicle (LCV) fleet: EC proposal of new fleet average of 175g/km by 2017, target of 2020 is 147 g/km 8-9 October 2015 Slide 7 of 16 JEC Biofuels Programme: Objectives Objectives of the JEC Biofuels Programme: • Clarify opportunities and barriers to achieve renewable energy and fuel carbon intensity targets in the EU transport sector by 2020 • Extend the “Fleet & Fuels” (F&F) Model to test legislative concepts for Renewable Energy Directive (RED) and Fuel Quality Directive (FQD) amendment. • Update the EU27 F&F Model baseline from 2005 to 2010 • Update fixed demand values for non-road transport modes • Focus on conventional and alternative fuels and biofuel blends while accounting for growth in alternative powertrains share in 2010-2020 • Update the advanced biofuel supply outlook from the bottom up • Define and assess realistic and technically feasible alternative fuels implementation scenarios for 2020 Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 8 of 16 JEC Biofuels Programme: Approach Develop a consensus on demand and supply outlook of alternative fuel types and availability to meet the 2020 RED and FQD targets European Energy and Transport industries’ research organisations involved on equal footing in joint collaborative effort • Review and analyse data and projections - Conventional and advanced alternative fuels Considering domestic production and imports Including the most recent updates on WTW energy and GHG implications • Define and analyse possible biofuel blend implementation scenarios • Analyse uncertainties and their impacts on legislative targets - Reproduction permitted with due acknowledgement Fleet development (fleet activity and alternative powertrains) Availability of non-conventional biofuels to the EU market Market uptake of new blend grades European electricity mix in 2020 (share of renewable energy sources, RES) European Flight Path biofuels target 8-9 October 2015 Slide 9 of 16 2014 JEC Biofuels Study: Reasons for a revision Since JEC Biofuels publication in 2011… …changes in legislative initiatives, vehicle fleet, fuel and biofuel demand, availability of advanced biofuels ~ Potential impact of these changes on the RED and FQD targets… …JEC decision to update its Biofuels Study by… • Updating F&F Model (2010 baseline year) via historical fleet data (+) revised outlooks for alternative vehicles • Updating fuel demand values for non-road transport modes • Adding ramp-up factors to new blend uptake to reflect market experience • Revising supply outlook for conventional and advanced biofuels • Re-evaluating all of the results via sensitivity analysis Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 10 of 16 ‘Fleet & Fuels’ Model: Overview • A spreadsheet-based model simulating the EU27+2 vehicle fleet development and the demand for fossil fuels and alternative fuels, including biofuels • The model can be used to simulate different combinations of vehicles, powertrains and fuels (fossil and alternative) • • • • • • • Total fuel demand and diesel/gasoline balance Total biofuels demand, including ethanol and biodiesel, HVO Total renewable energy demand, including electricity, biogas Renewable energy demand for road transport to be used for RED calculations GHG emissions reduction according to FQD Article 7a Legislative proposals, including: - Cap on conventional biofuels - Multiple counting for advanced biofuels - Specific target for advanced biofuels - ILUC reporting factor Parameters relevant to determine fuel demand (for example): • • • • • Reproduction permitted with due acknowledgement Passenger car, van, bus and coach and heavy-duty truck demand Vehicle efficiency and improvement in efficiency over time Percentage diesel in new car sales Introduction of alternative vehicles (FFV, LPGV, CNGV, electric vehicle, etc.) Vehicle model year (vintage) assumed compatible with fuel grade 8-9 October 2015 Slide 11 of 16 Road Transport: Demand results 1/2 Road fuel (Mtoe) Gasoline fossil to Car Gasoline fossil to LCV Sum fossil Gasoline Diesel fossil to Car Diesel fossil to LCV Diesel fossil to HD Sum fossil Diesel (incl. drop-in) Diesel to Gasoline ratio (road only) CNG Of which CBG LPG LNG H2 FAME HVO/co-processing (drop-in) BTL (drop-in) Butanol Adv. DME Total Ethanol Of which food/energy based Of which non-food/energy based Electricity Of which Renewable Electricity Sum road 2010 2015 2020 91 2.5 93 76 28 89 192 2.1 0.2 0.0 2.5 0.1 0.0 9.8 0.4 0.0 0.0 0.0 2.9 2.6 0.3 0.0 0.0 301 79 2.8 82 84 26 87 197 2.4 0.8 0.1 2.5 0.2 0.0 13.2 2.3 0.0 0.3 0.0 3.2 2.6 0.6 0.1 0.0 299 69 3.0 72 84 22 86 193 2.7 2.4 0.5 3.0 0.4 0.0 13.0 3.0 0.4 0.3 0.1 3.7 3.0 0.7 0.3 0.0 288 RED Contributions Non-road Road Sum RED-% 0.8% 7.9% 8.7% FQD GHG saving 4.3% Reproduction permitted with due acknowledgement • Demand for road fuels is projected to peak in 2015 and decline towards 2020 • Given the assumptions of growth in activity and stock size, the decrease in energy demand is the result of significant energy efficiency improvements in vehicles • The split of diesel vs gasoline demand continues to grow towards 2020 due to three main effects: - • Share of diesel vehicles in car sales is 50% in 2020 (35% currently) Alternative powertrains tend to replace more gasoline vehicles Gradual uptake of E10 demands more ethanol at the expense of fossil gasoline towards 2020 Contributions of alternative fuels like CNG, LPG and LNG are very small. However, the growth potential of CNG could play a significant role. 8-9 October 2015 Slide 12 of 16 Road Transport: Demand results 2/2 Bio-diesel components in 2020 [Mtoe] Bio-gasoline components in 2020 [Mtoe] 0.4 0.3 3.0 0.6 2.7 14.1 FAME • BTL Conv. Ethanol Adv. Ethanol Butanol Biofuels demand results - • HVO FAME dominates biofuel market Ethanol demand increasing beyond 2010 driven by E10 introduction HVO and BTL demand follow availability assumptions (backward compatible - not grade dependent) FAME / Ethanol demand by 2020 - Reproduction permitted with due acknowledgement FAME demand in all transport sectors will be ~14.1 Mtoe/yr, fairly stable from 10.9 Mtoe/yr (2010) Bio-gasoline demand will be ~3.7 Mtoe/yr, increasing from 2.6 Mtoe/yr (2010) 8-9 October 2015 Slide 13 of 16 Fuel demand scenarios: Background & Findings 4 biofuel implementation scenarios based on the following considerations: CEN specifications for mass market fuels and vehicle compatibility outlook (ramp-up) Market experience in E10 uptake (Germany, France, and Finland) Scenario 1 (ref) Gasoline Grade 1 Gasoline Grade 2 2010 2011 2012 2013 2014 Diesel Grade 1 Diesel Grade 2 Scenario 2 Gasoline Grade 1 Gasoline Grade 2 2010 2011 2012 2013 2019 2020 Scenario 1: E10 & E5 ‘protection grade’ B7 diesel grade 2014 2015 2016 E5 E10 with ramp-up 2017 2018 2015 2016 2017 E5 E10 with ramp-up 2018 2019 2020 E10 E20 with ramp-up Scenario 2: E20 introduced in 2019 E10 becomes ‘protection grade’ Scenario 3: E10 & E5 ‘protection grade’ B7 diesel main grade B10 diesel for HD captive fleet Scenario 4: Combination of Scenarios 2 & 3 B7 2010 2011 2012 2013 Diesel Grade 1 Diesel Grade 2 Scenario 4 Gasoline Grade 1 Gasoline Grade 2 2018 B7 Diesel Grade 1 Diesel Grade 2 Scenario 3 Gasoline Grade 1 Gasoline Grade 2 2015 2016 2017 E5 E10 with ramp-up 2014 2019 2020 B7 B10 captive HD fleet* 2010 2011 Diesel Grade 1 Diesel Grade 2 * 2.5% of total HD diesel demand is B10 2012 2013 2014 2015 2016 E5 E10 with ramp-up 2017 2018 2019 2020 E10 E20 with ramp-up B7 • B10 captive HD fleet* • • • Only a limited impact can be expected from the market introduction of higher blends Introducing a new grade to the market takes time and will therefore not make significant difference until 2020 Reproduction permitted with due acknowledgement In scenarios 2 and 4 E10 becomes main grade and is fully utilized. This results in a steep increase of bio-gasoline demand Higher bio-gasoline demand in scenarios 2 and 4 result in higher RED of 0.6% Scenario 1 Scenario 2 Scenario 3 Scenario 4 Bio-gasoline (Mtoe) 3.7 5.4 3.7 5.4 Bio-diesel (Mtoe) 17.46 17.46 17.52 17.52 RED% FQD% 8.7 9.3 8.7 9.3 4.3 4.7 4.3 4.7 8-9 October 2015 Slide 14 of 16 Biofuels Supply Outlook: Background • Fleet and Fuels model uses different biofuels pathways classified according to the FQD • Each pathway has the default GHG emission value for 2010 • For ‘conventional’ pathways, it is assumed that pathways that do not meet the GHG saving threshold will improve towards the threshold of 50% in 2020 • For the ‘advanced’ biofuels pathways the default GHG emission values are those of the FQD • Some pathways have multiple counting factors • Where applicable ILUC factors are applied for individual pathways • Each pathway is also flagged when it is ‘conventional’ biofuel subject to the cap of the ILUC Directive. • For the HVO and co-processing production capacity the reported 2012 feedstock mix of Neste Oil was used • Reproduction permitted with due acknowledgement The assumption is that the mix will be composed of 50% conventional crude palm oil and 50% waste material towards 2020. 8-9 October 2015 Slide 15 of 16 Conventional and Advanced biofuels: JEC definition ‘Conventional’ and ‘Advanced’ can refer to… the feedstock used in a certain renewable energy production process. OR to a conversion technology. • • Within the feedstock dimension, conventional and advanced are also referred to as ‘low-ILUC risk’ and ‘ILUC risk’ respectively. On the technology dimension, conventional and advanced strongly depend on technology maturity over time. Conventional biofuels: Biofuels produced from ILUC risk feedstocks regardless of the conversion technology. Advanced biofuels: Biofuels produced from low ILUC risk feedstocks regardless of the technology. Non-conventional biofuels: Biofuels produced from low ILUC risk feedstocks including advanced technology. Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 16 of 16 Conventional Biofuels: EU demand vs capacity • • • Current European installed production capacity of ethanol and FAME is sufficient to cover the projected demand in 2020. The projected 2020 ethanol and FAME demand indicates that it could be covered by domestic production at installed capacity usage rate of 73% for ethanol and 67% for FAME. The usage of European ethanol and FAME capacity strongly depends on the world biofuels market conditions and trade flows. Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 17 of 16 Non-conventional Biofuels • • Bottom-up approach to collect and analyse announced projects (global scale) Scope is bio-derived components: - Ligno-cellulosic Ethanol Butanol Methanol HVO/Co-processing Biomass-To-Liquid (BTL) Dimethyl Ether (DME) World outlook of non-conventional biofuels in 2020 is ~9.2 Mtoe, EU is ~4.2 Mtoe • • Main sources are: - Hart Energy (2012): “advanced biofuels outlook 2025” - IEA Task 39: “Status of Advanced Biofuels demonstration Facilities in 2012” - NER300 projects funded by the European Commission - Additional publicly announced projects and companies consultation Focus of JEC study is on availability, not on costs and investments Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 18 of 16 Conclusions: General remarks • Achieving the 2020 targets is now less likely compared to 2011. Reasons: - • Compared to 2011 the fleet baseline is characterised by a larger share of old vehicles Slower uptake than expected of gasoline grade E10 Advanced biofuels supply outlook remains uncertain especially on drop-in fuels Changed alternative vehicle assumptions Reduced likelihood of introduction of new higher blend grades (B10/E20) Results depend on: - Reproduction permitted with due acknowledgement Compatibility of: vehicles and the supply and distribution system for all fuel products European (CEN) fuel specifications to enable timely market uptake of biofuel blends Biofuel supply, especially the availability of certified sustainable biofuels to Europe Non-road contributions to the RED and FQD Consumers’ readiness to purchase (biofuel) market blends and compatible vehicles 8-9 October 2015 Slide 19 of 16 Conclusions: • None of the scenarios achieve the RED target of 10% renewable energy in transport. - • The FQD target (-6% GHG savings) is also not met. - • Results range from 7.83% (EC ILUC proposal) to 8.75% (Council compromise) Including ILUC results in a big shortfall The overall impact based on the sectors’ trend since 2009 is in any case very positive. Achieving the EU targets for alternative transportation fuels is subject to the ambition level of using sustainably produced, low-ILUC risk biofuels. Decisions on transport fuels policy measures must be based on sound and detailed impact analysis, covering all vehicle, powertrain and infrastructure challenges and global supply projections of sustainable renewable fuels While the JEC scenario analysis is focussed on the EU level, the impacts of Member State initiatives are also likely to be important: yet, initiatives at the national level must not increase fuel disparity – and resulting market fragmentation. Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 20 of 16 Contacts THANK YOU FOR ATTENTION *** The study report is available at: http://iet.jrc.ec.europa.eu/about-jec *** For questions / inquiries / requests / notes to the JEC Consortium, please use the centralised mail address: infoJEC@jrc.ec.europa.eu Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 21 of 16 JEC Biofuels Programme: Contributors JRC Laura Lonza Alberto Moro EUCAR Thomas Becker Michael Bippes Valérie Boch Hans-Peter Deeg Sebastian Enrico Finke Andrea Gerini Per Hanarp Heinz Hass Eberhard Holder Eva Iverfeldt Opel VW Renault Porsche VW Fiat Volvo Ford Daimler Scania Lisa Jacobsson Lisa Johansson Jürgen Kölch Heiko Maas Frédéric Novel-Cattin Béatrice Perrier Willibald Prestl Anders Röj Jörg Wind Volvo Volvo BMW Ford Renault PSA BMW Volvo Daimler CONCAWE Frederick Bernard Sophie Boreux Marta Chrusch Carlos Diaz Garcia Jeff Farenback-Brateman Gerd Hagenow Heather Hamje Liesbeth Jansen Baudouin Kelecom Sari Kuusisto Reproduction permitted with due acknowledgement TOTAL TOTAL BP Repsol ExxonMobil SHELL CONCAWE Kuwait Petroleum ExxonMobil Neste Oil Jean-François Larivé Elena Marin Pedro Antonio Medina Robledo Walter Mirabella Robin Nelson Catherine Price Alan Reid David Rickeard Ken Rose Tom Venderbosch CONCAWE Repsol CEPSA LyondellBasell CONCAWE SHELL CONCAWE CONCAWE CONCAWE CONCAWE 8-9 October 2015 Slide 22 of 16 Backup: F&F Model: Alternative powertrain parameters Alternative Fuel Passenger Cars In 2020 New Sales In 2020 Vehicle Fleet Flex-Fuel Vehicles (FFV) 0.5%; 80`000 0.2%; 600`000 Compressed Natural Gas Vehicles (CNGV) 3%; 480`000 0.8%; 2.3 million Liquefied Propane Gas Vehicles (LPGV) 3%; 480`000 1.6%; 4.5 million Electric Vehicles 3%; 480`000 0.8%; 2.1 million Battery Electric (BEV) & Plug-in Hybrid (PHEV) Hydrogen Vehicles (FCEV) 0.25%; 40`000 0.04%; 100`000 Alternative Fuel Vans In 2020 New Sales In 2020 Vehicle Fleet Compressed Natural Gas Vehicles (CNGV) 3%; 70`000 1.2%; 370`000 Light Commercial Vehicles (LCV) Liquefied Propane Gas Vehicles (LPGV) 1%; 20`000 0.6%; 180`000 • New LCV average CO2 target in 2020: 147g/km Flex Fuel Vehicles (FFV) 0.5%; 11`000 0.16%; 50`000 • Sales in 2020: 2.2 million/a; Overall fleet in 2020: 31 million Electric Vehicles 2%; 45`000 0.8%; 240`000 • Alternative fuel vehicles in the market, Fuel Cell Vehicles (FCVs) in Battery Electric (BEV) & Plug-in Hybrid (PHEV) Hydrogen Vehicles (FCEV) 0.25%; 6`000 0.04%; 14`000 2017 In 2020 New Sales • Total fleet mileage from 395 to 424 billion v-km/a in 2020, Alternative Fuel Heavy Duty Vehicles 3.5t to 7.5t to 16t to Bus(YoY growth: 0.73% until 2020) > 32t 7.5t 16t 32t Coach Compressed Natural Gas Vehicles (CNGV) 2% 1.5% 2% == 5% Heavy-Duty (HD) Vehicles Liquefied Natural Gas (LNG) == == 1% 1% == • New truck average YoY efficiency improvement: ~1.5% Di-Methyl Ether Vehicles (DMEV) == == 0.5% 0.25% == • Sales in 2020: 0.7 million/a; Fleet in 2020: 8 million 95% Ethanol (E95) Vehicles == == 0.5% == 2% • Alternative fuel vehicles entering the market in specific HD classes Electric Vehicles (EV) == == == == 0.25% • Total fleet mileage increases towards 2020 with 1.2% YoY growth Hydrogen Vehicles (FCEV) == == == == 0.5% Passenger Cars • New car average CO2 target in 2020: 95 gCO2/km • Diesel / gasoline new sales share 2020: 50% / 50% • New sales in 2020: 16 million/a; Overall fleet in 2020: 275 million • Alternative fuel vehicles in the market, Fuel Cell Vehicles (FCVs) in 2017 • Total fleet mileage Year-on-Year (YoY) growth: 1.8% until 2020 Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 23 of 16 Backup: Biofuels Supply Outlook: Pathways used Biofuels pathways used EU2009 EC2012 EP2013 iLUC factor Cap applied? Counting factor Cap applied? Counting factor Cap applied? [gCO2eq/MJ] 44.2 43.0 43.0 43.0 43.0 40.0 24.0 43.0 [gCO2eq/MJ] 12 12 12 12 12 13 13 12 No No No No No No No No [1,2 or4] 1 1 1 1 1 1 1 1 5% 5% 5% 5% 5% 5% 5% 5% [1,2 or4] 1 1 1 1 1 1 1 1 Ethanol from Wine Ethanol from Farmed wood Ethanol from Waste wood Ethanol from Wheat straw Ethanol from advanced Butanol from advanced Butanol from conventionals Methanol from waste wood 15.0 25.0 22.0 13.0 35.3 35.3 35.3 5.0 0 0 0 0 0 0 0 0 No No No No No No No No 2 2 2 2 2 2 1 2 No No No No No No 5% No Pathways diesel pool FAME from Rapeseed FAME from Soybean FAME from Palm Oil FAME from Sunflower seed FAME from conventionals 52.0 58.0 52.5 41.0 47.3 55 55 55 55 55 No No No No No 1 1 1 1 1 Diesel from Farmed wood FT Diesel from Waste oil Diesel from Waste wood FT Diesel from advanced HVO/co-processing from Waste oil 6.0 14.0 4.0 35.3 20.5 0 0 0 0 0 No No No No No HVO/co-processing from Rapeseed oil HVO/co-processing from Palm Oil 42.8 44.2 55 55 Pathway DME pool DME from Waste wood 5.0 0 Pathways gasoline pool Ethanol from Wheat Ethanol from Maize Ethanol from Barley Ethanol from Rye Ethanol from Triticale Ethanol from Sugar beet Ethanol from Sugar cane Ethanol from other conventionals Reproduction permitted with due acknowledgement Applied in all 4 cases GHG intensity in 2020 CEU2013 Counting Cap factor applied? Counting factor 6% 6% 6% 6% 6% 6% 6% 6% [1,2 or4] 1 1 1 1 1 1 1 1 7% 7% 7% 7% 7% 7% 7% 7% [1,2 or4] 1 1 1 1 1 1 1 1 4 2 2 4 2 2 1 2 No No No No No No 6% No 1 1 1 1 1 1 1 1 No No No No No No 7% No 2 2 2 2 2 2 1 2 5% 5% 5% 5% 5% 1 1 1 1 1 6% 6% 6% 6% 6% 1 1 1 1 1 7% 7% 7% 7% 7% 1 1 1 1 1 2 2 2 2 2 No No No No No 2 2 2 2 2 No No No No No 1 2 1 1 2 No No No No No 2 2 2 2 2 No No 1 1 5% 5% 1 1 6% 6% 1 1 7% 7% 1 1 No 2 No 2 No 1 No 2 8-9 October 2015 Slide 24 of 16 Backup: Blending (different legislative concepts) • Fuel suppliers have the option to optimize their conventional biofuels usage in gasoline and diesel, given the cap. Depending on the biofuels GHG intensity and their cost, a fuel supplier will seek maximizing GHG saving at minimum cost. This study simulates scenarios and therefore the following blending assumptions are made: • Current legislation RED (2009/28/EC) and FQD (2009/30/EC) 1. Blend all available advanced biofuels (excluding drop-ins) 2. Add conventional biofuels up to biofuels demand as determined by the F&F model (E5, E10 and B7) 3. Blend all available drop-in biofuels • European Commission ILUC proposal of October 2012 1. Blend all available advanced biofuels (excluding drop-ins) 2. Add conventional biofuels up to biofuels demand as determined by F&F model (E5, E10 and B7) 3. Blend all available drop-in biofuels 4. Assume that fuel suppliers will do steps 2 and 3 in order to maximize the FQD GHG reduction as the cap of 5% only applies to RED target. • European Parliament (EP) vote in 1st reading of September 2013 1. Blend available advanced biofuels 2. Blend conventional biofuels up to the cap of 6% and not more than the biofuels demand as determined by F&F model (E5, E10 and B7) 3. Blend only advanced drop-in biofuels It is assumed that fuel suppliers will not maximize the FQD like in the EC ILUC proposal step 4, as the cap also applies to the FQD • Council compromise proposal of December 2103 The same blending priorities are assumed as for the EP vote with an accounting cap on conventional biofuels of 7%. Reproduction permitted with due acknowledgement 8-9 October 2015 Slide 25 of 16