OSLO: The Norwegian government is set to increase its biofuels blending mandate from 1 January 2017 and introduce blending sub-mandates for ethanol as well as for biofuels made from double-counted feedstocks.
The decision, published in the country’s national budget, will see the biofuels mandate increase by 1.5 percentage points to 7pc by volume. Respective sub-mandates of 4pc and 1.5pc will be set for ethanol blending and advanced biofuels blending after double counting.
The purpose of introducing the new sub-mandates, according to Norway’s Ministry of Climate and Environment, is to reduce the risk of indirect land-use change (ILUC) effects and ensure actual global greeenhouse gas emission reductions from biofuels.
The government has also announced plans, likely to be debated in parliament, for a 0.5 percentage point/yr increase both in the general biofuels mandate and the advanced biofuels sub-mandate through 2020. These mandates will be 8.5pc and 3.0pc in 2020, respectively.
And it is also considering the introduction of E10 — gasoline with a maximum blended volume of 10pc ethanol in 2019.
The Norwegian biofuels mandate was raised from 3.5pc to its current level of 5.5pc in October 2015. It applies to the sum of gasoline and diesel supplied for road transport. Only biodiesel and ethanol supplied within the biofuels mandate of 5.5pc is covered by road use tax.
Within the biofuels mandate, the tax on biodiesel is the same as for diesel and the tax on ethanol the same as for gasoline. As of 2016, these are NKr3.44/litre ($460.51/t) and NKr4.99/litre ($667.84/t), respectively. Additional biofuel is not covered by the road use tax.
There is currently no biodiesel mandate in Norway. Such a mandate has not been proposed due to the ILUC risk of conventional biodiesel, the Ministry of Climate and Environment told Argus.
Biofuels made from feedstocks that are classified as wastes, residues, non-food cellulosic material, and ligno-cellulosic material are double-counted in Norway in line with the EU renewable energy directive (RED). There is currently no cap on double-counting.
