On 14 July 2021, the European Commission presented the Fit for 55 package, which contains numerous legislative proposals aiming to make the European mobility and energy sector fit for a 55% emissions reduction by 2030. In order to outline the exact impact of the package, Dr2 Consultants asked Marcel Borger, founder and CEO of OrangeGas, exactly what the new package means for his business. As a clean fuels and energy supplier, OrangeGas finds itself right in the midst of the proposed policy measures.
Below you can read more about how OrangeGas has prepared for the publication of the Fit for 55 package, how it views the proposed legislations and how the package will likely impact OrangeGas.
When did you first hear about the Fit for 55 package?
We were aware of upcoming legislation relevant to OrangeGas quite early on, such as the revision of the CO2 emission performance standards for cars and vans, but we were not aware that this initiative was part of the Fit for 55 package. We recognized the importance of the upcoming legislation, but we realized we had too little knowledge about it. That is why we hired a new employee focusing on Public Affairs. She mapped out the upcoming legislation and as such we became familiar with the Fit for 55 package in early 2021.
The package contains a lot of legislation: which elements are most relevant to OrangeGas?
OrangeGas supports the EU’s ambition to become the first climate-neutral continent by 2050. Our philosophy is to tackle the energy transition with an open and integrated approach. That is why we offer a total package of clean energy carriers for road transport. We are of the opinion that the European Commission is making a serious mistake by solely focusing on electric and hydrogen vehicles and neglecting the potential of biomethane as a green fuel. Biomethane is the cleanest energy carrier available in the market today.
There are three initiatives most important to us: the revision of the CO2 emission performance standards for cars and vans, the revision of the Renewable Energy Directive (RED3) and the Alternative Fuels Infrastructure Regulation (AFIR). Moreover, two other important initiatives are the revision of the Energy Taxation Directive (ETD) and the extension of the EU Emissions Trading System (EU ETS) to road transport.
The proposed legislation determines which technologies and energy carriers will be used for road transport in the future. With regards to the boosted CO2 emission performance standards for cars and vans: the Commission proposes to ban the internal combustion engine by 2035. The internal combustion engine is seen as the problem, while the problem is actually the fossil fuels. For us, it is important that – in addition to electric vehicles – internal combustion engine vehicles continue to operate so that they can run on clean, non-fossil, affordable energy carriers such as biomethane. Biomethane is 100% non-fossil and produced from waste streams such as sludge, manure, and household waste. According to OrangeGas, there should be a mechanism in place to account for the contribution of net-zero fuels, such as biomethane.
How do you assess the impact of the relevant Fit for 55 elements? Which threats and opportunities were you able to identify?
We support the goal of climate-neutral road transport by 2035. However, reaching this goal is only possible if all green technologies are embraced and if emissions are based on a well-to-wheel approach. The newly proposed CO2 emission performance standards for cars and vans solely focuses on electric and hydrogen passenger vehicles. With this, we expect that CO2 emission reduction will be lower than wished for in the coming years, because solely electric vehicles will not be able to meet the market demands of the European society.
As OrangeGas, we think the Commission is overlooking an important transition fuel. Vehicles running on biomethane reduce CO2 emissions by at least 90% (compared to gasoline), the needed infrastructure is in place with over 4,000 refueling stations in Europe and it is affordable for all European citizens. This means we can start reducing CO2 emissions already today! Moreover, even if the international combustion engine is banned by 2035, vehicles with internal combustion engines will be driving around for the coming 30 years or so. We think those vehicles should be fueled with biomethane instead of fossil fuels.
We see opportunities once the proposed legislation is based on a well-to-wheel approach in calculating greenhouse gas emissions of energy carriers in the road transport sector. Legislation should be based on a net-zero approach, instead of a tailpipe-emission approach. As such, counting CO2 emissions along the entire chain is the only fair and just method. OrangeGas offers a total package of clean energy carriers for road transport: electricity, hydrogen, and biomethane. Since all Member States have to make their vehicle fleets more sustainable, and since we offer all sustainable energy carriers, we will continue to be a big market player in Europe. This is definitely the case since biomethane byproducts also serve to support the production of electric fuel cells and other (bio)fuels and therefore also support the transition towards electrification.
How do you prepare, as an organization, for the impact of this new legislation?
The vision of OrangeGas is to realize affordable and sustainable road transport for everyone. This vision will not change. We will continue investing in green fuel infrastructure. Meanwhile, we will keep promoting biomethane and informing citizens and policymakers about today’s cleanest fuel: biomethane.
Do you have any advice for other organizations or companies which might also see threats and/or opportunities in the Fit for 55 package and the European Green Deal ambitions of the European institutions?
“Have guts, work together, and prove them wrong.”
We think it is very important to work together, to create a broad and strong coalition of stakeholders. With such a coalition, you (1) combine knowledge, strengths, and assets, and (2) proclaim one message rather than fragmented messages.
More specific, we think there are four elements that are of great importance: expertise, information, visibility and evidence. You need expertise on the topic itself (in this case biomethane) and on the EU decision-making processes. In order to have the right expertise on the EU procedures, we hired an employee working on Public Affairs and we are supported by Dr2 Consultants. Their support makes a significant difference in getting our message across. Secondly, it is of importance to inform and educate policymakers. Often, they have too little knowledge on, in our case, biomethane. Therefore, we publish position papers, produce videos, and organize dialogues. Thirdly, you have to make sure your product is seen and known to citizens. The better your product is known, the bigger influence it will have on society and policymakers’ decision-making. Finally, while Public Affairs activities are crucial, you cannot forget to keep your core business running, which is the living proof of your business model’s success.
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