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Estonian fuel retailers meet biofuel obligation in 2023

Diesel fuel.
Diesel fuel. Source: ERR

While proceedings had to be brought against a few fuel sellers when they failed to meet Estonia's biofuels quota in 2021 and 2022, all retailers performed their obligation last year.

The obligation placed on fuel sellers means that at least 7.5 percent of the fuel sold must be produced from renewable sources. This can include biogas used in transportation, solar or wind energy, or diesel fuel produced from biomass, known as HVO (Hydrotreated Vegetable Oil).

"We actually checked all major biofuel volumes coming into the country by meeting the tankers, taking samples of the fuel and analyzing them in competent laboratories to ensure that the fuel, which is supposed to be of biological origin, is indeed so," Olav Avarsalu, deputy director-general of the Environmental Board, told ERR.

Marina Molokova, the supply and wholesale manager at fuel retailer Neste, mentioned that although the demand for biofuel has increased, the state could do more to encourage the consumption of biofuels.

"For example, HVO is taxed the same as fossil fuels, which is not right. We have tried to get our government to revise the tax policy so that alternative fuels would be taxed fairly, based on CO2 emissions," Molokova said.

According to Marina Molokova, the transition to biofuels should occur gradually. "The Neste corporation has clearly stated that the direction is towards transitioning away from fossil fuels to these alternatives, and this direction is clear," she added.

Rein Vaks, head of the energy department at the Ministry of Climate, believes that in the longer perspective, both biofuels and liquid fuels in general should be replaced with something else.

"Today, we see that electricity is increasingly moving into the transport sector; it's in small vehicles today, and it will be in larger vehicles tomorrow. We tend to think that biofuels and liquid fuels will probably not be so competitive over the next 10-15 years, simply because the internal combustion engine will gradually be phased out and replaced with something else," said Vaks.

"However, before we reach that point, we must also contribute to the decarbonization of the transport sector. We can't just continue without doing anything in the transport sector, and today the best option is to use fuels in internal combustion engines that are greenhouse gas neutral, considered renewable, and do not emit fossil greenhouse gases into the air," Vaks explained.

Estonian fuel sellers have generally met the biofuel requirement without adding biofuels to automotive fuels. Initially, when this was done, consumers started avoiding fuels with biofuel additives.

Audit Office: Biofuels are not competitive or always environmentally friendly

A report by the European Court of Auditors recently warned that although the European Union has invested €430 million in developing biofuels, they are still not competitive or always environmentally friendly.

Court of Auditors member Keit Pentus-Rosimannus explained in the special report that the Court sees three main problems with biofuels at the European Union level: lack of environmental friendliness, availability of biomass and high production costs. Additionally, the European Union lacks a long-term comprehensive plan for the future use of biofuels.

"The European Commission assumed that biofuels would increase energy independence, but in reality, dependency on other countries has grown, as evidenced by the import of used cooking oil from China and Malaysia. The biofuel sector competes for raw materials with other sectors, especially the food sector, but also the cosmetics, pharmaceutical and bioplastic sectors. Compared to fossil fuels, biofuels have not become economically viable due to their higher price," said Pentus-Rosimannus.

The special report states that the environmental benefits of biofuels are often overestimated.

Biofuels are often produced from raw materials whose cultivation involves deforestation or competing with land intended for food production. This raises an ethical question – whether the priority should be food or fuel, according to Pentus-Rosimannus' statement.

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Editor: Marcus Turovski

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