Fuel with a bio-blend is becoming cheaper than pure fossil fuel
- Latvijas klimata neitralitātes biedrība
- Nov 5, 2024
- 3 min read
Delfi.lv: 5.11.2024
It has been calculated that adding a biological blend makes fuel cheaper than using pure fossil fuel, experts emphasized during the discussion “Which fuel will be cheaper and how will we compensate the price increase?”
At present, fossil fuels are cheaper, while renewable energy sources are used less. In the future, fossil fuels will become more expensive, and renewable energy sources will be increasingly applied, along with broader use of price-compensation mechanisms, stressed Armands Gūtmanis, Chairman of the Board of the Sustainability Cluster Latvia.
“The information report on Latvia’s greenhouse gas emissions, forecasts, and compliance with climate commitments shows that Latvia will not be able to achieve the 17% reduction target — neither under the scenario with existing measures nor under the one with additional measures. The failure to meet annual targets could begin as early as this year, and it may become necessary to use flexibility options, such as purchasing emission quotas from other countries. That is why decisive action in reducing transport emissions is crucial,” Gūtmanis explained.
The broader use of renewable resources must be cheaper than fossil fuels, emphasized Baiba Miltoviča, representative of the Latvian Consumer Rights Protection Association, pointing out that Latvia will have access to more than €600 million from the Social Climate Fund to support residents.
“The government has two major tools for limiting fuel prices – first, to promote the wider use of renewable resources (including those produced in Latvia), and second, the targeted use of money from the European Social Climate Fund to offset price increases and make renewables cheaper than fossil resources. This will ensure that the green transition takes place fairly and will help consumers make more sustainable choices,” said Miltoviča.
Justs Dimants, leading researcher at the association Sustainability Cluster Latvia, emphasizes “When considering the various climate and renewable energy targets that must gradually be achieved by 2030, along with the associated costs, it is important to look for the most cost-effective scenarios. Some scenarios require aggressive subsidies (for fuel production, infrastructure development, or vehicle purchases), which in turn demand significant expenditures in these areas. Other scenarios do not require subsidies, as they allow the use of existing infrastructure and vehicle fleets. One quite realistic way to achieve the 16% reduction target in GHG emission intensity set out in the Transport Energy draft law would be through the use of R33 fuel, E10 gasoline, renewable electricity, and by replacing the currently used natural gas with biomethane.”
R33 is a fuel that consists of 26% renewable diesel (HVO) and 7% conventional first-generation biodiesel. This fuel has been tested and positively evaluated in Germany and can be used in all diesel-powered cars. To ensure a fair and inclusive transition process, the European Union has created the Social Climate Fund, which will start operating in 2026.
Andris Kužnieks, Deputy Head of the European Commission Representation in Latvia, emphasizes:“The work initiated by the European Union and its Member States on the implementation of the Green Deal will continue with full force in the coming years, as it is clear that there can be no retreat in the face of climate change and geopolitical challenges. It is important to remember that one of the central elements of the Green Deal is emissions trading, or in other words, putting a price on carbon. The new emissions trading system, which will come into force in 2027, will provide significant support for achieving climate targets, channeling investments into decarbonisation and further reducing emissions. It is essential to make use of the opportunities offered by the newly established Social Climate Fund, which will be financed both from Member States’ contributions and other mobilised resources, in order to support the most vulnerable groups in society and ensure fairer conditions in the green transition.”
Aija Timofejeva, Director of the Energy Sustainability Department at the Ministry of Climate and Energy (KEM), emphasizes that transport energy should be understood not only as conventional fuel but as any type of energy that powers transport. She points out that from 2030 it will be mandatory for all EU Member States to include a set share of renewable energy in fuels.“Currently, Latvia ranks first with the lowest share of renewable energy in fuel. According to the current plan, Latvia does not intend to wait until 2030, but could gradually introduce the system already from 2027, so that we can start reducing quota payments by then,” explains the KEM representative, adding that for every percent of renewable content blended into diesel to “green” it, the quota fee can be avoided.
“This is the core discussion: is it cheaper to blend in renewable fuel, or to pay the quota fee? Our calculations show that the biological blend is cheaper than fossil fuel,” concludes the Director of the Energy Sustainability Department.
Comments