At a glance
“Towards Common Criteria for Sustainable Fuels,” by Ilkka Hannula, Ana Alcalde, Jose Bermudez-Menendez, Herib Blanco and Paolo Frankl. International Energy Agency (IEA). September, 2024.
This report says low-emission fuels, such as liquid biofuels, biogases, certain kinds of hydrogen and hydrogen-based fuels can play an important role in the energy transition. They are especially useful in sectors where it is harder to fully electrify or otherwise reduce greenhouse gas emissions, such as shipping and heavy industry. The report calls for international collaboration to established unified criteria for sustainable fuels, because the fragmented state of current global standards gets in the way of comparing emissions intensity across regions. One practical solution on offer: a passport for shipments of hydrogen or hydrogen-based fuels that would giving trading partners the information they need to assess emissions intensity throughout the full hydrogen lifecyle, including production, transport and distribution. The report was produced in support of Brazil’s G20 presidency this year. It pitches the South American country, which has extensive experience in biofuels and growing expertise in hydrogen, as a potential leader in shaping international standards.
Key findings
- Global fragmentation: A lack of unified standards for biofuels, hydrogen, and hydrogen-based fuels limits scalability and hampers the global energy transition.
- GHG intensity measurement: Standards must comprehensively account for GHG emissions from production, transport, and distribution, particularly for hydrogen and hydrogen-based fuels, which can have high transport-related emissions.
- Brazil’s biofuels experience: Brazil’s work in biofuels and its increasing focus on hydrogen-based fuels potentially makes it a strong candidate in advocating for global standards in sustainable fuel criteria.
- Decarbonization urgency: Biofuels and hydrogen-based fuels are critical for achieving the IEA’s Net Zero by 2050 scenario, particularly in hard-to-abate sectors.
- Investment barriers: Inconsistent regulations around biofuels and hydrogen infrastructure slow investment in low-emission fuel technologies.
Take a look
Bigger picture
The lack of harmonized global standards for sustainable fuels highlighted by this report is not just a problem of imperfect data. It also makes it harder to reduce emissions. Without standardized metrics, it can be hard to ensure that the fuels marketed as sustainable or low-emission or green are truly delivering on those promises. This can happen across regions, but also within sectors, such as by failing to account for the diversity of hydrogen production methods. Green hydrogen is produced using renewable energy sources. Grey hydrogen is produced from fossil fuels. Both have different carbon footprints. Skewing the comparison of the environmental impact of sustainable fuels — for better and for worse — gets in the way of informed choices about the role they should play in the global energy transition.
The report argues Brazil’s deep experience with biofuels, particularly ethanol, positions it as a potential leader in shaping global standards for sustainable fuels as it hosts the G20 Leaders’ Summit in Rio de Janeiro from Nov. 18 to 19. Brazil started focusing on this sector in the 1970s in response to an oil crisis. But land-use competition remains an issue. Expanding biofuel production can present challenges for food crops and even lead to deforestation, particularly in sensitive ecosystems like the Amazon rainforest. Water usage for biofuel crops can also pose significant sustainability risks. As Brazil pushes to scale its expertise in biofuels and pivot toward hydrogen, these trade-offs could come under greater scrutiny.
Challenges and opportunities
Key challenges for developing common criteria for biofuels, hydrogen, and hydrogen-based fuels include:
- A lack of global agreement on definitions and standards for sustainable fuels, particularly hydrogen-based fuels.
- High costs associated with infrastructure development for hydrogen production, storage, and distribution.
- Inconsistent regulations that deter investment and slow international trade.
To address these challenges, the report suggests:
- Global co-operation on GHG intensity standards for biofuels and hydrogen
- A hydrogen passport system could help build trust in hydrogen markets by ensuring transparency in emissions accounting.
- Sustainability certifications for biofuels, hydrogen, and synthetic fuels will enable fair comparisons, boost investor confidence, and accelerate innovation.
- Policy frameworks that support advancements in biofuels and hydrogen-based fuels can significantly reduce GHG emissions, facilitating the energy transition.
In their own words
Fuel sustainability is becoming an increasingly important consideration for regulators, but criteria of what makes a fuel ‘sustainable’ vary across assessment frameworks. Terms such as ‘green,’ ‘blue,’ or ‘advanced’ are frequently used today to describe the sustainability features of fuels and to differentiate them from their unabated fossil counterparts. However, there is no international consensus on the meaning of these terms. Their definitions are inconsistent and, critically, they do not usually provide quantitative information about GHG emissions.
Towards Common Criteria for Sustainable Fuels, By the International Energy Agency (IEA), Sept. 2024.
Final thoughts
The report presents a framework for harmonizing sustainable fuel standards, including a hydrogen passport and expanded certification systems for biofuels, hydrogen, and synthetic fuels. These initiatives are crucial for enhancing transparency, boosting investor confidence, and facilitating global trade.
The hydrogen passport is a promising tool for improving accountability in GHG emissions tracking, but successful implementation of this and other complex standards will require substantial co-ordination between governments, industries, and international bodies. The report also lacks in-depth analysis of environmental and social impacts in resource-constrained regions. The question of whether global players, especially in emerging markets, will align is crucial to the success of the proposed solutions.
Furthermore, the report does not provide detailed analysis on how the proposed fuel standards will interact with broader decarbonization policies, such as carbon pricing or carbon border adjustment mechanisms. This omission suggests a potential gap in understanding how these standards fit within the larger policy environment, which could be crucial for their successful implementation.
Download the full report originally published by the International Energy Agency (IEA) in September 2024. The IEA has also since published a correction to two of the charts in the original report.
