Breaking Europe’s addiction to oil

Former Secretary General of NATO Anders Fogh Rasmussen and Novozymes’ CEO take steps to highlight Europe’s problematic addiction to oil – and what can be done about it

By Anders Fogh Rasmussen, former Secretary General of NATO, and Peder Holk Nielsen, CEO Novozymes

fogh_700x200Napoleon is meant to have said an army marches on its stomach. 200 years on, controlling vital resources remains a winning hand. Europe is addicted to oil. We live in a fossil-fuel-driven economy, and we depend highly on unstable states to fuel it. Other regions have been in this situation before us, and have dealt with it. As things stand now, Europe is not dealing with it at all.

Energy security is vital for stability and prosperity in Europe – and advanced biofuels can help us get there. Advanced biofuels are produced from sustainable sources such as waste and agricultural residues. The technology is ready. Using it would be good for energy security, the environment, and for jobs in rural areas. But to use it, we need a clear and unambiguous EU policy.

The European Commission’s recent “State of the Energy Union” did not contain a serious attempt to wean Europe off imported oil and encourage large-scale investment in alternatives.

The Energy Union was inspired by the new, political reality facing the EU – with an assertive Russia, conflict in Ukraine and continued instability in the Middle East. This is very likely a reality that is here to stay.

For inspiration the EU should look across the Atlantic, where the United States has worked determinedly to reduce its reliance on foreign oil. In 2009, the U.S. Navy embarked on an ambitious programme to secure 50% of its energy from alternative sources by 2020, including domestically-produced advanced biofuels. As noted recently by Secretary of State John Kerry, the programme is making steady progress.

Clear political guidance has spurred investments in alternative fuel plants and biofuels have become a mainstream product in the United States. Renewable fuel mandates have helped to reduce foreign oil imports by 25% while saving the American consumer an average of €0.25 a litre. Advanced biofuels such as cellulosic ethanol from waste and residues represent reductions in lifecycle CO2 emissions of between 88% and 108%. Production is on the increase and although still a drop in the ocean of the country’s oil use, the direction is clear and – importantly – inspires the confidence of investors.
 
Brazil, too, provides a compelling example, having worked since the oil crises of the 1970s to reduce its reliance on imported energy. Today, Brazil is a net oil exporter and the world’s second-largest producer of bioethanol, which has replaced more than one-quarter of the gasoline once used in the country.

The contrast to Europe is stark. The EU remains overwhelmingly reliant on foreign oil: for each 100 litres consumed in the bloc, 90 litres are imported – and the situation will, according to the IEA, only get worse. EU member states spent a staggering €271 billion on imported oil in 2014 – more than the GDP of Denmark. The EU is heavily dependent on oil imports with around half coming from Russia, Saudi Arabia and Nigeria – making the European Union extremely vulnerable to unpredictable geopolitical tensions and conflicts.

We should commend the EU Commission for accelerating the creation of an Energy Union. Only by standing together as a bloc will the EU stand a chance of improving energy security.

But until now, the work has primarily focused on gas. In order to succeed, we need to broaden and include oil.

To that end, we need a reinforced effort to promote sustainable energy sources that directly replace imported oil. In this context, advanced biofuel kills three birds with one stone: Improved energy security, better environment and more jobs.

However, unlike the United States and Brazil, Brussels’ policies towards promoting advanced biofuels have been unambitious and ambiguous. It does not have to be this way. Europe has the means to shrug off the spectre of oil addiction, if it can muster the political will to do so.

Stepping up production of advanced biofuels can supplement and gradually replace oil imports. Already by 2030, it could displace up to 16% of road transport fuel, according to the International Council on Clean Transportation (ICCT).

Today, the advanced biofuels are readily available. The technology is being demonstrated on a commercial scale on the European market. Advanced biofuels allow ample room for growth.

Of course, the advantages of a thriving advanced European biofuels industry extend far beyond energy security and politics. By 2020, the U.S. advanced biofuels market is expected to create hundreds of thousands of jobs in addition to the approximately 400,000 jobs already created. There is no reason Europe cannot repeat this economic success story. This will create an estimated 300,000 jobs, principally in rural areas and significantly lower greenhouse gas emissions from cars in Europe.

This potential is within our reach. The industry is ready to deliver. But the EU needs to ensure solid implementation of existing 2020 targets – including as for advanced biofuels. And Brussels needs to provide a clear direction towards 2030 on how the entire bloc will decrease together its dependency on imported oil and lower CO2 emissions in transport in order to encourage large-scale investment in the sector.

Getting out of the imported oil habit will not be easy – but security, economics, politics, and environmental concerns dictate that we cannot afford to stay hooked for much longer.

For additional information, please contact:
Frederik Bjørndal:
TFBH@novozymes.com

Facts

  • Former Secretary General of NATO and current Chairman of Rasmussen Global, Anders Fogh Rasmussen, and Novozymes’ CEO Peder Holk Nielsen are organizing a high-level policy conference at the European Parliament in Brussels on how to improve EU energy security with advanced biofuels. The conference will take place on February 25.
  • The conference will feature key note speeches by Vice President in charge of the Energy Union, Maroš Šefčovič, and Mr. Fogh Rasmsussen, while representatives from industry, trade organizations, Member States, Parliament and NGOs will share their perspectives as well.
  • Mr. Fogh Rasmussen wrote last week an op-ed on the topic of home-grown energy security for Europe; read it over at Project Syndicate.
  • Follow @Novozymes on Twitter for much more information in the run-up to the conference.