Norway's government introduces 0.5 per cent blending mandate for advanced aviation biofuels from 2020
Thu 11 Oct 2018 – The Norwegian Ministry of Climate and Environment has announced a requirement for a minimum requirement of 0.5% content of advanced biofuel be mixed with jet fuel sold from 2020. This follows a consultation that had proposed a 1% requirement by 2019. The ministry has stipulated that no biofuel should be used from “problematic” raw materials such as palm oil and should come instead from advanced fuels produced from wastes and residues. It has used calculations from the Danish Environmental Protection Agency to estimate that the mandate will result in a reduction of 14,000 tonnes of CO2e in the first year. Meanwhile, as part of its 2019 national budget, the government has said it intends increasing the air passenger tax on long-haul flights and reducing it on regional flights in order to give the tax an “environmental profile”.
Commenting on the advanced aviation biofuel mandate, Climate and Environment Minister Ola Elvestuen said: “Biofuels are part of the solution to reduce emissions from the transport sector, especially in aviation where the options are limited over the long-term. At the same time, we know that the climate effect of biofuels varies between the different types. Therefore, we are now demanding that advanced biofuels be used in the blending requirement for aviation.”
The government says it is up to the those involved in the jet fuel supply chain to work out how the mandate should be achieved, and they should “adapt to the requirement as appropriate”.
Said Elvestuen: “The government’s goal is that by 2030, 30% of airline fuel will be sustainable and with climate benefits. By establishing a blending requirement, we can ensure that there is a market for alternative aviation fuels. This will facilitate technology and industry development in Norway.
“By postponing the introduction to 2020 and notifying this in good time, we are providing predictability to the industry and the time to adapt.”
He told Reuters that the 0.5% quota would correspond to a price increase for airlines of around NOK 54 million ($6.5m) annually.
The 30% by 2030 target stems from a report published by Rambøll on behalf of the Norwegian aviation sector in 2017 (see article). The report found that a domestic aviation biofuel market could be created based on the use of sustainable feedstocks from Norwegian forestry residues and pulpwood. However, it said this would be only possible with the help of policy intervention and public funding because of the need to address the price premium of sustainable fuels compared to traditional jet fuel.
The report suggested implementing a blending requirement to build a market and creating a fund to bridge the price gap. A fund could be raised, it suggested, by uniting the Norwegian carbon tax on fuel used on domestic flights with the air passenger tax and use it to cover the price differential or purchase biofuel on behalf of airlines.
Earlier this year, Norwegian airport operator Avinor set out an ambition for all domestic and short-haul flights lasting up to one-and-a-half hours be operated by electric aircraft by 2040 (see article).