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Brussels , Belgium
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Climate Lobbying Overview: FuelsEurope is heavily engaged with European climate policy. Despite positive top-line communications on Europe's long term climate ambition, including the European Green Deal, the organization appears not to be supporting reforms to increase the near term stringency of key EU's regulations (e.g. the EU ETS). FuelsEurope has, however, communicated strong support for the role of liquid fuels in the energy transition.

Top-line Messaging on Climate Policy: FuelsEurope’s top-line messaging on climate policy appears to have become broadly more positive in 2019-21. Director-General John Cooper stated in June 2020 that FuelsEurope supported the Paris Agreement “from the beginning.” In 2018, FuelsEurope appeared to suggest that Europe should not focus on “ever-higher unilateral targets” in response to a consultation on increasing the EU GHG emission targets. However, since December 2019, FuelsEurope has supported the EU’s target of climate neutrality by 2050, reiterating this many times, i.e., in a publication from July 2021. Despite this, in December 2020 position papers, FuelsEurope maintained that EU policy should not exceed the ambition of global policy to avoid “ambition gaps” and emphasized carbon leakage and competitiveness concerns in regard to the aviation and shipping sectors.

In a position paper on the Fit for 55 package in May 2021, FuelsEurope supported a global focus for the maritime and aviation sectors but advocated that, in the case of EU regulation, a combination of policies could be implemented to reduce GHG emissions provided a number of conditions are met. In response to an EU consultation in 2021, the association stated preference for carbon pricing mechanisms as the primary tool for driving low-carbon technologies, but in response to another EU consultation in October 2020 it recognized the need for other complementary policy measures.

Engagement with Climate-Related Regulations: FuelsEurope appears not to have supported reforms to increase the carbon price and stringency of the EU Emissions Trading System (EU ETS). In a consultation response in February 2021, the organization advocated for increased carbon leakage protection alongside any increase in ambition of the scheme, and opposed several proposals to strengthen the policy. In October 2020, FuelsEurope communicated support for increased free allowances for EU exporters under the ETS, and in a position paper on its website, accessed in May 2021, for compensation for “electro-intensive” sectors. A July 2021 Energy Monitor article suggested that FuelsEurope supported the EU’s announcement for a new emissions trading scheme for the road transport sector and not having it included in the existing EU ETS, in the Fit for 55 legislative package. FuelsEurope described the carbon border adjustment mechanism (CBAM) as one of several possible policy options, all of which should be given consideration in a consultation response to the EU Commission in October 2020. However, a May 2021 joint letter from the Alliance of Energy Intensive Industries (of which FuelsEurope is a member) advocated that if a carbon border adjustment mechanism is introduced, it should be in addition to, rather than instead of, existing carbon leakage protections in the EU ETS (i.e. free emission allowances corresponding to the EU benchmark level).

In a consultation response in November 2021, FuelsEurope advocated against a cap on energy consumption under the EU Energy Efficiency Directive and in a position paper from April 2021 suggested that any sector covered by the EU ETS should be exempt from energy efficiency requirements. In a separate November 2021 consultation on the revision of the EU Renewable Energy Directive, FuelsEurope called for a technology-neutral approach, supported more ambitious renewable targets for transport with the caveat that a wider pool of feedstocks is included, and called for the continued usage of fossil heating infrastructure. In its July 2021 press release on the EU’s Fit for 55 legislative package, the association appeared to be unsupportive of reforms proposed to the CO2 emission standards for light-duty vehicles, instead proposing that the policy should make greater room for internal combustion engine vehicles running on sustainable fuels. It further appeared supportive of a 2035 zero-emissions target for light-duty vehicles in a November 2021 consultation, stating that “narrow technology mandates would hamper the effectiveness of the transition”.

Positioning on Energy Transition: FuelsEurope is advocating for low carbon fuels to be recognized as key element of the energy transition, including with reference to a number of EU climate policies for the transport sector. While social media messaging in 2021 suggests that the organization believes low-carbon fuel uptake should be left to market forces, it has also made a number of policy proposals to further incentivize this. For example, the organization’s Clean Fuels for All policy paper, published in June 2020, proposed fuel taxation reforms to encourage investment in low carbon fuels. In presentations to EU policymakers in 2020, the association proposed further policies to support the development of low-carbon liquid fuels, including an EU ETS for road transportation and reforming the Renewable Energy Directive. However, FuelsEurope also advocated for the discontinuation of the Fuel Quality Directive in 2021, citing concerns regarding overlap with these other policies. In a position paper on the decarbonization of transportation in the Fit for 55 package published in May 2021, FuelsEurope again stated support for a standalone EU ETS for road transportation, as well as EU Sustainable Aviation Fuel mandates but specified that "as wide a feedstock based as possible" should be permitted.

In public communications in May 2021, the association stated that “oil products will remain the main energy source for transport till 2030 and beyond.” FuelsEurope appears not to support certain policies to electrify road transportation, including sales bans of new internal combustion engine (ICE) vehicles, as communicated in a press release from January 2021. Instead, it generally appears in favour of a long-term role for ICE vehicles, stating in its website, accessed in October 2021, that low-carbon fuels are a competitive solution compared to battery or hydrogen fuel cell vehicles. The association also appears to have supported increasing charging and refueling infrastructure for hydrogen and LNG under the Alternative Fuels Infrastructure Directive in a November 2021 consultation. FuelsEurope did not support stringent CO2 thresholds for defining electricity generation as sustainable under the EU’s proposed sustainable finance taxonomy rules, with Director-General John Cooper stating in August 2020: “There’s a real danger that that means the existing (gas) plants in Europe could be deemed not sustainable and therefore unable to raise any finance for anything.” A July 2021 Energy Monitor article suggested FuelsEurope sees a continued role of fossil gas in the energy mix, without placing clear conditions for CCS or methane emissions abatement.