Transport Policies

Most policies to increase the use of renewable energy in the transport sector focus on support for the production, promotion, or use of biofuels. During 2013, such policies continued to be enacted or revised by a number of countries that are using a mix of fiscal incentives and regulations. Common policies include biofuel production subsidies, biofuel blend mandates, and tax incentives. As of early 2014, blend mandates existed in 33 countries, with 31 national mandates and 26 additional mandates at the state/ provincial level. (See Reference Table R18.)

New blend mandates were introduced in 2013 by Ukraine, which established an initial E5 mandate (5% ethanol blended with gasoline) scheduled to increase to E7 by 2017; Ecuador, which enacted a B5 mandate (5% biodiesel blended with diesel fuel) with plans for a future (undated) increase to B10; and Panama, whose current E5 mandate is set to be increased to E7 in 2015 and E10 in 2016.131

Many existing blend mandates were strengthened in 2013. India raised its ethanol blend mandate from E5 to E10 at the end of 2013; Malaysia began extending the B5 blend mandate to more regions with the aim of enacting it nationwide by July 2014; and the Philippines began implementing the E10 mandate, delayed since 2011.132 In South America, Argentina increased its blend mandate from B7 to B10, and Brazil increased the national ethanol blend level from E20 to E25, and began studying a possible increase in its biofuel blend from B5 to B7.133 In Africa, Zimbabwe raised its existing blend mandate twice, initially from the existing E5 mandate to E10 in early 2013, and subsequently from E10 to E15; it also set a goal of introducing E20 by early 2014.134South Africa set a date of October 2015 to begin implementing the E2 and B5 blend mandates first established in 2007.135

At the same time, biofuel support policies in Europe and the United States continued to be challenged by concerns about the impacts of cultivating energy crops onfood production, land use, biodiversity, and water. Net lifecycle greenhouse gas emissions from biofuels are also under review.

In the United States, the Renewable Fuel Standard (RFS) was reduced for the first time since it was enacted in 2005, with a decrease in the mandated blending level from a minimum of 54 billion litres (14.4 billion gallons) of corn ethanol to 49 billion litres (13 billion gallons).136 At the state level, Florida repealed its E10 blend mandate, and Maine adopted legislation to ban ethanol blends in the state.137 Similar discussions are under way in the European Parliament, where critics have questioned the use of first-generation biofuels to meet the EU target of 10% renewable energy—including biofuels, electricity, and hydrogen—in total transport energy by 2020.138

The use of fiscal incentives and public financing for the biofuels industry continued to expand during 2013. Brazil offered tax credits and provided low-interest loans for ethanol producers at an estimated cost of USD 480 million (BRL 970 million).139Poland initiated a USD 3.3 million (EUR 2.4 million) tender to support the production of renewable fuels, and the United States provided USD 16.5 million in grants to advance the development of algae-based biofuels.140 In a blowto biodiesel, China instituted tax and trade duties on imported biodiesel in an effort to support domestic petroleum diesel refineries.141

Many countries continue to explore additional options for integrating more renewable energy into the transport sector, such as increasing the number of vehicles fuelled with biomethane, renewable hydrogen, or electricity from renewable sources. Electric vehicles (EVs) continue to receive policy support from a number of countries, although this is seldom linked directly to renewable electricity. Examples of support schemes enacted in 2013 include China providing a subsidy of USD 9,813 (CNY 60,000) for the purchase of an EV; Germany pledging USD 247.8 million (EUR 180 million) for electro-mobility demonstration projects; India introducing plans to produce 5-6 million EVs by 2020 as part of its National Electric Mobility Mission Plan 2020; Romania enacting a subsidy programme to provide vouchers worth USD 3,697 (RON 12,000) for the purchase of an EV; South Africa adopting incentives for manufacturers to promote a domestic EV industry and, by early 2013, considering the provision of tax incentives for consumers purchasing EVs; and the U.K. providing funding to expand the EV charging network under its Plugged-in Places scheme.142

131 "Ukraine aims to lift bioethanol output by 6-fold," Xinhua, 1 April 2013, http://news.xinhuanet.com/english/business/2013-04/01/c_132277395.htm; Meghan Sapp, "Ukraine set to supply 2014 E5 entirelyfrom domestic production," Biofuels Digest, 30 October 2013, http://www.biofuelsdigest.com/bdigest/2013/10/30/ukraine-set-to-supply-2014-e5-entirely-from-domestic-production/; Meghan Sapp, "Ecuador to begin B5 blend in May," Biofuels Digest, 26 March 2013, http://www.biofuelsdigest.com/bdigest/2013/03/26/ecuador-to-begin-b5-blend-in-may/; Panama from Jim Lane, "Biofuels Mandates Around the World: 2014." Biofuels Digest, 31 December 2013, http://www.biofuelsdigest.com/bdigest/2013/12/31/biofuels-mandates-around-the-world-2014/.

132 Meghan Sapp, "India's ethanol mandate slowed down further by hitches at OMCs," Biofuels Digest, 3 October 2013, http://www.biofuelsdigest.com/bdigest/2013/10/03/indias-ethanol-mandate-slowed-down-further-by-hitches-at-omcs/; Esther Ng, "Analysis: Malaysia's expanded B5 biodiesel mandate too late for some producers," Platts, 21 August 2013, http://www.platts.com/latest-news/agriculture/singapore/analysis-malaysias-expanded-b5-biodiesel-mandate-26202623; Isabel Lane, "Philippines raises biofuel blend mandate to 5%," Biofuels Digest, 15 July 2013, http://www.biofuelsdigest.com/bdigest/2013/07/15/philippines-raises-biofuel-blend-mandate-to-5/; Meghan Sapp, "Philippines implementing long awaited E10 mandate on April 1," Biofuels Digest, 26 March 2013, http://www.biofuelsdigest.com/bdigest/2013/03/26/philippines-implementing-long-awaited-e10-mandate-on-april-1/.

133 Meghan Sapp, "Argentina to boost to B10 on June 1," Biofuels Digest, 17 April 2013, http://www.biofuelsdigest.com/bdigest/2013/04/17/argentina-to-boost-to-b10-on-june-1/; "Brazil to raise ethanol mix in gasoline to 25%from 20% May 1," Platts, 1 March 2013, http://www.platts.com/latest-news/oil/riodejaneiro/brazil-to-raise-ethanol-mix-in-gasoline-to-25-8194390; Stephan Nielsen and Mario Sergio Lima, "Brazil Government Weighs Mixing More Biodiesel with Diesel Fuel," Bloomberg, 30 October 2013, http://www.bloomberg.com/news/2013-10-30/brazil-government-weighs-mixing-more-biodiesel-with-diesel-fuel.html.

134 Meghan Sapp, "Zimbabwe heads for higher blends with E15 and sights on E20 for 2014," Biofuels Digest, 3 December 2013, http://www.biofuelsdigest.com/bdigest/2013/12/03/zimbabwe-heads-for-higher-blends-with-el5-and-sights-on-e20-for-2014/

135 All Africa, "South Africa: Nation to Blend Biofuels From 2015," 1 October 2013, http://allafrica.com/stories/201310011284.html.

136 The reduction of the RFS comes in response to industry pressure and an Environmental Protection Agency warning over its feasibility with the current fuel mix. The EPA reported that the approaching "blend wall," the level atwhich the RFS could not be met by the current renewable fuel mix being used in the United States (predominantly E10), could necessitate reducing the current RFS target. Timothy Gardner, "In win for Big Oil, U.S.proposes biofuel mandate cut," Reuters, 18 November 2013, http://planetark.org/wen/70402; David Ripplinger, "What is the long-term impact of the RFS cut?" AG Week, 9 December 2013, http://www.agweek.com/event/article/id/22237/

137 Jim Lane, "Florida repeals E10 ethanol mandate," Biofuels Digest, 3 June 2013, http://www.biofuelsdigest.com/bdigest/2013/06/03/florida-repeals-elO-ethanol-mandate/; Isabel Lane, "Maine approves ethanol blend ban," Biofuels Digest, 13 May 2013, http://www.biofuelsdigest.com/bdigest/2013/05/13/maine-approves-ethanol-blend-ban/.

138 Erin Voegele, "European Parliament votes to cap crop-based biofuels," Ethanol Producer, 11 September 2013, http://www.ethanolproducer.com/articles/10226/european-parliament-votes-to-cap-crop-based-biofuels.

139 "Updated 2-Brazil throws troubled ethanol industry tax breaks, credit," Reuters, 23 April 2013, http://uk.reuters.com/article/2013/04/23/brazil-ethanol-taxes-idUKL2N0DAlE3201304 23?rpc=401&feedType=RSS&feedName=mnaNewsFinancialServ icesAndRealEstate&rpc=401.

140 Poland from Eclareon, Monthly Progress Update: Part of the project "Assessment of climate change policies in the context of the EU Semester" (Brussels: European Commission, 5 November 2013), http://ec.europa.eu/clima/policies/g-gas/progress/docs/progress_201310_en.pdf; Jim Lane, "US DOE invests $22M in algae biofuels accelerators," Biofuels Digest, 2 August 2013, http://www.biofuelsdigest.com/bdigest/2013/08/02/us-doe-invests-22m-in-algae-biofuels-accelerators/

141 Judy Hua, "UPDATE 1-China levies consumption taxon biodiesel, kerosene imports," Reuters, 2 January 2014, http://www.reuters.com/article/2014/01/02/china-fuel-tax-idUSL3N0KC0MM20140102.

142 Colum Murphy, "China Hopes Cities Can Help Boost Electric Car Sales," Wall Street Journal, 27 October 2013, http://blogs.wsj.com/chinarealtime/2013/11/27/china-hopes-cities-can-help-boost-electric-car-sales/; India from Sharish Garud, The Energy and Resources Institute (TERI), personal communication with REN21, 25 January 2014; Romania from Eclareon, Monthly Progress Update: Part of the project "Assessment of climate change policiesin the context of the EU Semester" (Brussels: European Commission, 5 November 2013), http://ec.europa.eu/clima/policies/g-gas/progress/docs/progress_201310_en.pdf; South Africa from Jonathan Skeen, REN21, personal communication with REN21, 1 January 2014; Government of the United Kingdom, "Guidance: Plugged-in Places," https://www.gov.uk/government/publications/plugged-in-places.