Climate Lobbying Overview: FuelsEurope is heavily engaged with European climate policy in 2021-23. Despite generally positive top-line communications on Europe's long term climate ambition, including the European Green Deal, the organization appears unsupportive of reforms to increase the near term stringency of key EU regulations, including the EU Carbon Border Adjustment Mechanism (CBAM), EU Emissions Trading System (EU ETS), and CO2 emission standards for light-duty vehicles.

Top-line Messaging on Climate Policy: FuelsEurope’s top-line messaging on climate policy appears to have become broadly more positive in 2021-23. FuelsEurope supported the EU’s target of climate neutrality by 2050 in a joint letter to the French President in March 2022. A May 2022 joint letter, signed by Fuels Europe, and numerous 2022 twitter posts echoed this support. However, it has often stressed the risk of carbon leakage for EU industrial competitiveness resulting from a unilateral increase in EU climate ambition, including in a joint statement in February 2022. Although FuelsEurope stated support for the EU’s Fit for 55 package in a joint statement in February 2022, in a February 2021 consultation response the association indicated that it prefers carbon pricing mechanisms as the primary tool for driving low-carbon technologies.

Engagement with Climate-Related Regulations: FuelsEurope seems to have predominantly negative engagement with EU climate regulations. The association has consistently not supported reforms to strengthen the EU Emissions Trading Scheme (ETS), for example in a joint statement in February 2022, where it advocated for strengthened carbon leakage protection measures, including a “sufficient” level of free allocation of emissions allowances, and did not support many proposed reforms to the Market Stability Reserve. Furthermore, in a July 2022 open letter, FuelsEurope appeared unsupportive of Parliament’s Environment Committee’s proposal to increase the ambition of the EU ETS, stating it would “harm the competitiveness of European industries in the EU or international markets”. In a February 2022 joint statement, FuelsEurope supported the EU’s Carbon Border Adjustment Mechanism (CBAM), whilst advocating for the continuation of current carbon leakage protection measures under the EU ETS until at least 2030, a position which is misaligned with the EU Commission, and supported the inclusion of export rebates. Additionally, according to a July 2022 ‘Energy Intelligence’ article, FuelsEurope CEO, John Cooper, supported the EU’s CBAM with the exception that fuels could be exported without carbon pricing.

In an EU public consultation response in November 2021, FuelsEurope did not support reforms to the EU Energy Efficiency Directive, including advocating for energy intensity targets instead of absolute energy consumption targets, and was unsupportive of the proposed increase of the energy savings obligation to 1.5%. Furthermore, in a position paper published in April 2021 the association suggested that any sector covered by the EU ETS should be exempt from energy efficiency requirements. FuelsEurope also appeared to oppose the ban of fossil fuel-based systems under the Energy Performance of Buildings Directive in a December 2022 joint letter.

FuelsEurope stated support for the EU’s Renewable Energy Directive (RED) on its corporate website in September 2021. However, in a November 2021 EU public consultation response it called for a technology-neutral approach, supporting more ambitious renewable targets for transport with the caveat that a wider pool of feedstocks is included, and opposed a strengthening of the bioenergy sustainability criteria. FuelsEurope also appeared to support the grandfathering of strict renewable Hydrogen criteria until 2030 under RED’s Delegated Act on Renewable Fuels of Non-Biological Origin in a July 2022 joint statement. According to a September 2022 Euractiv article, FuelsEurope supported an increased advanced biofuels target under RED.

FuelsEurope did not support reforms to the EU’s CO2 standard for light-duty vehicles legislating a 2035 zero-emissions target in a November 2021 consultation response, stating that “narrow technology mandates would hamper the effectiveness of the transition”. Evidence from a July 2022 Politico article suggested FuelsEurope are unsupportive of a stringent EU CO2 emissions standards for cars and vans, by asserting that “opening the regulation to recognise climate neutral fuels simply makes sense”. Furthermore, in a September 2022 Twitter post, FuelsEurope Director General, John Cooper appeared unsupportive of the effective 2035 ICE-phase out date for light-duty vehicles through higher CO2 standards, calling for Trilogue negotiations to “enable, after 2035, ICE cars registered to run exclusively on CO2-neutral fuels”. More positively, FuelsEurope did appear to support maximum GHG intensity targets for marine fuels under FuelEU Maritime in a November 2021 EU public consultation response.

Positioning on Energy Transition: FuelsEurope takes mostly negative positions on policy to transition the energy mix by advocating for the use of ‘low carbon fuels’ in transportation over full electrification. On its corporate website in May 2021, FuelsEurope stated that “oil products will remain the main energy source for transport till 2030 and beyond.” In a March 2022 open letter to the French President, FuelsEurope Director General John Cooper opposed the EU’s 2035 effective ICE phase-out date and called for the long-term role of hybrid vehicles post-2035. Similarly, FuelsEurope appeared in favor of a long-term role for ICE vehicles by calling for a technology-neutral approach in the shift to low-emission vehicles in a November 2021 EU public consultation response and highlighted the role of 'low-carbon liquid fuels' in the decarbonization of transport over electrification. The association also appeared to support increasing charging and refuelling infrastructure for hydrogen and Liquified Natural Gas under the Alternative Fuels Infrastructure Regulation in a November 2021 consultation response. However, in a December 2022 joint letter on RePowerEU, FuelsEurope appeared supportive of the policy’s aim to decarbonize energy intensive sectors and advocated for more investment.

FuelsEurope also appeared unsupportive of a stringent kerosene fuel taxation for aviation on its website in September 2021, arguing that it should only be applied to intra-EU flights with a review to include international aviation at a later stage, alongside opposing CO2-based ticket taxes for aviation. In a May 2021 position paper, FuelsEurope advocated for exemptions for manufacturing, logistics and aviation sectors from reforms to align the Energy Taxation Directive (ETD) with the energy transition via increased taxation on fossil fuels. However, in a November 2021 EU public consultation response it supported an exemption period of 10 years from energy taxation for sustainable alternative fuels. Furthermore, in a November 2022 joint statement, FuelsEurope supported taxation benefits for low-carbon and renewable fuels under the ETD, without specifying which fuels would count under these definitions.