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VW, Shell and Lurgi Propose Taxation Scheme for 2nd-Generation Biofuels

20 July 2006

At the recent Forum for Future Energies in Berlin, Volkswagen, Shell and the engineering company Lurgi proposed a fuel duty model based on CO2 efficiency and sustainability criteria as an alternative to the planned quotas.

The model takes a market-based, technology-neutral approach for the long-term promotion of biofuels at a European level, and the companies hope that such an approach would boost the development of second-generation biofuels such as biomass-to-liquids (BTL) synthetic fuels.

Volkswagen is prepared to invest heavily to press ahead with production of second generation biofuels in Germany. However, to do so, we need clear, harmonized conditions in Europe in the form a CO2-based fuel duty model, which gives a sound long-term planning basis.

—Prof. Jürgen Leohold, Head of Volkswagen Group Research

Volkswagen and DaimlerChrysler are working with CHOREN on the production and testing of SunDiesel, a BTL synthetic diesel. Shell has a partnership with CHOREN to develop Biomass-to-Liquids technology that uses CHOREN’s gasification process as a front-end to Shell’s Gas-to-Liquids technology.

Volkswagen, Shell and Iogen are conducting a joint study to assess the economic feasibility of producing cellulosic ethanol in Germany. (Earlier post.)

Alongside an exemption from fuel duty for BTL until 2015, Volkswagen and Shell would also welcome the same conditions for 2nd generation bioethanol.

July 20, 2006 in Biomass-to-Liquids (BTL), Cellulosic ethanol, Europe, Policy | Permalink | Comments (8) | TrackBack (0)

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Comments

Biomass-to-liquid technology at present is effectively waste-to-energy technology. Because one should treat waste anyway, this approach is almost insensitive to fossil fuel price and once perfected, will stay kind of forever (for energy crops it is quite opposite). Very welcomed initiative. And fuel fee waiver until 2015 is right incentive too.

This seems fair to me. Large investments now in BTL need guarantees that the fuel will have a retail price advantage in the future. When the duty-free period expires in 2015 it could be easily undercut by fuels derived from coal or tar sands if they get to pollute for free.

To be fair to mother nature (and to all its inhabitants), fuel duty-tax should be GHG based. Why not call it what it is, i.e. a pollution tax. It could replace many other existing taxes.

To give everybody an egal chance, the pollution tax rates should be progressively but universaly applied. Each country should collect-receive the revenues from the universal pollution tax relevant to the activities within their borders.

All polluters (coal fired power plants, airlines, cars, truck buses, ships, farmers, industries, armed forces, etc) should pay directly or indirectly for the harmful pollution they create. The reverse should also apply and one should be compensated to eliminate GHG.

Harvey:
It is very dangerous approach. Agriculture is very massive producer of GHG, and if calculated due to net GHG emissions, corn ethanol would be way more GHG polluting then gasoline. Cattle farming and rice cultivation over the world produce GHG emission comparable with transportation. Look for example at

http://66.102.7.104/search?q=cache:2FRXgAZr4voJ:www.agr.gc.ca/policy/environment/pdfs/climate_change/founda2.pdf+corn+stover+plowed+under+methane+GHG&hl=en&gl=ca&ct=clnk&cd=6

http://www.pewclimate.org/global-warming-basics/facts_and_figures/anthroghg.cfm

All data is pretty old, more recent estimations are even more impressive.

One question, how much biomass (and this carbon) do we bury more or less permanently as garbage? I know some of it comes back as methane emissions, but how much stays down there?

Allen:
This chart, however old, gives pretty good idea of the scale, indicating waste disposal as source of about 2% of antropogenic GHG emissions:

http://www.pewclimate.org/global-warming-basics/facts_and_figures/anthroghg.cfm

More resent researches put percent of biological antropogenic GHG emissions (agriculture, land use, and alike) somehow higher.

Arguably, collecting and using for energy generation biogas from decomposition of organic wastes (from landfills and from animal manure) is by far the most effective and win-win strategy at any turn of events.

Andrey, I believe the GHG emissions from agriculture are primarily from rain forest slash and burn cattle ranches, not general farming practices. I think Harvey has got the right idea. Similarly, the Chicago Climate Exchange (CCX) has developed standardized rules for issuing carbon credits for the following types of offset projects:

Methane destruction:
Initiating and operating landfill methane collection and destruction in the United States, Canada, Mexico, Brazil and other countries as applicable.
Initiating methane collection and destruction systems at livestock operations.
 
Agricultural practices:
Committing land to continuous no-till, strip-till, or ridge-till cropping in the central United States and other regions or countries as applicable.
Initiating grass cover planting in specified states, counties and parishes in the United States.

James:
Yes, as I am aware of it is mostly cattle, forest burning, and rise puddles. Different sources provide widely different estimations.
I am skeptical about antropogenic impact on climate, but biomethane collection and utilization, preventing of rainforest being burnt, and no-till practice is no brainer and should be implemented and enforced world wide, no matter reason and cost.
Look also at:

http://www.guardian.co.uk/international/story/0,3604,1035851,00.html#article_continue

you won’t be sorry. I can only imagine the picture…

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