An assessment of trading mechanisms as a method for increasing liquid biofuels in the road transport sector
conference paper
The road transport sector is currently excluded from the EU-ETS and is unlikely to be included until 2020. Abatement costs for biofuel-related measures in the transport sector are higher than in other sectors. Therefore an inclusion into the EU-ETS represents a risk that transportation companies will purchase allowances from other sectors, leading to higher CO2 prices within the EU-ETS. This would also reduce incentives to mitigate emissions in the transport sector itself. Policy options include regulation, market based instruments such as emissions trading and provision of information. Policy makers will need to decide whether to focus on limiting emissions from the transport sector or to increase use of biofuels. A cap & trade scheme would be the appropriate instrument to reduce emissions. To increase biofuel use, regulation would be the appropriate instrument. Inclusion of emission reductions from the transportation sector via a baseline & credit approach would favor biofuels and could lead to more flexibility and lower costs. Such an approach could also be specially designed to address issues of sustainability and to accelerate the implementation of new technologies. This approach was taken in California and this paper illustrates that it could also be the way forward for the EU.
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Topics
TNO Identifier
821537
Publisher
ECN
Source title
16th European Biomass Conference & Exhibition, Valencia, Spain, 2-6 juni 2008.
Collation
4 p.
Place of publication
Petten
Pages
4 p.
Files