Fuel made from waste could replace 16% of all the fuel used on European roads by 2030, cutting spending on oil imports and boosting the rural economy by up to €15bn, according to a joint report by industry and NGOs.

The paper, whose backers include BA, Novozymes, WWF, and Virgin Airways, says there is significant untapped potential for sustainable waste from farms, forests, households, and industry to be turned into transport fuel, rejecting concerns that there are insufficient quantities of waste organic material to make a meaningful or cost-effective contribution to meeting transport fuel demand.

The researchers calculated that Europeans generate 900 million tonnes of waste paper, food, wood and plant material each year, about a quarter of which - about 220 million tonnes - is available for energy use as long as sustainability safeguards are in place.



This huge waste mountain could provide enough feedstock to produce fuel to displace 37 million tonnes of oil imports each year by 2030, creating an industry that at full capacity could support up to 300,000 jobs and make significant greenhouse gas savings, the report predicts.

Even a more conservative goal of sourcing 2% of transport fuel from waste materials by 2020 would secure over 40,000 jobs and return up to €2.4bn in net revenues to the agricultural and forestry sectors.

Deriving fuels from waste avoids competition with food production and emissions from indirect land use change (ILUC), such as clearing forests for energy crop production. Some studies have found once these ILUC factors are accounted for some biofuels actually have higher emissions than the fossil fuels they are supposed to replace. For example, some fuels derived from substances such as palm oil have been shown to have lifetime emissions higher than petrol or diesel.

But the paper says that if advanced biofuels from wastes and residues are sourced sustainably, they produce at least 60% fewer emissions than fossil fuels during their lifecycle, with savings potentially rising to 85% under certain circumstances.

“Even when taking account of possible indirect emissions, alternative fuels from wastes and residues offer real and substantial carbon savings,” said Chris Malins who led the analysis for the International Council on Clean Transportation. “The resource is available, and the technology exists - the challenge now is for Europe to put a policy framework in place that allows rapid investment.”

Other methods of producing advanced biofuels from carbon-rich waste streams are also coming to market - Virgin Arilines has a deal with New Zealand-based LanzaTech, which also supported the paper, to purchase fuels derived from waste gases in the steel industry. Similarly, today’s report estimates production of ethanol from European steel mill residues alone could amount to around one-third of the EU’s Renewable Energy Directive (RED) target for renewable fuels to have a 10% share of the transport fuel market by 2020.

However, the report warns successful commercialisation of these advanced biofuel technologies in Europe now depends on political leadership and adequate policies - a scenario that industry insiders fear is a long way from being realised.

The industry reacted with disbelief when the European Commission last month proposed axing an EU-wide 6% greenhouse gas reduction target for transport fuels when it expires in 2020, saying it will harm investment in advanced biofuels. In a further blow to the sector,member states also rejected plans for specific advanced biofuels targets last year when voting on whether to cap the contribution of crop-based fuels to the 10% RED goal.

The report says this uncertainty around long term biofuel policy is stopping advanced biofuels from reaching their full potential. It says that with only modest incentives EU member states could ensure fuels from the cheapest feedstock are able to compete on price with fossil fuel equivalents and argues they could be cost-competitive without support if feedstocks are available for little or no cost.

The paper also calls for full life-cycle emissions accounting to determine which fuels are genuinely reducing CO2 and ambitious decarbonisation targets for transport fuels in 2030.

Clare Wenner, head of renewable transport at the Renewable Energy Association, said current policy is “ill-equipped” to deliver the vision of the industry outlined in the paper.

“There are two key policy ingredients missing,” she said. “First, the UK Government needs to map out how it will meet its 2020 renewable transport target. Second, the EU needs to set a 2030 transport sector decarbonisation target at the very least to demonstrate to investors there is an enduring market opportunity in renewables fuels. Then we will see investment start to pick up again, creating jobs and growth in cutting edge bio-tech businesses.”

Europe already hosts one commercial-scale advanced biofuels plant at Crescentino, Italy, and the companies involved in the research urged the EU to ensure the industry can continue to grow and fend off growing competition from the US and South America.

“It is crucial that Europe, to maintain its role as a global leader in the fight against climate change and to retain a strong manufacturing base, provide a secure investment future for diverse, sustainable energy options,” said Freya Burton, director of communications at LanzaTech. “With increased policy certainty come new opportunities for innovative solutions that will help meet Europe’s energy challenges.”