1. Why has the ethanol concentration of 95 octane petrol been raised in Finland?On 1 January 2011, the ethanol concentration of 95 octane petrol was raised in Finland in order to ensure that the legislative transport biofuel obligation will be met. The increase in petrol ethanol concentration is one of many measures aimed at achieving the environmental targets set for the transport sector.
Finland’s goal in the country’s long-term climate and energy strategy is to reduce the carbon dioxide emissions from road transport by 15 percent from their 2005 level by the year 2020. This means that Finland strives to reduce her carbon dioxide emissions by some four million tonnes, one fourth of which should be achieved by increasing the share of renewable energy in transport, in other words by increasing the use of biofuels.
This goal stems from the binding national targets set for Finland by the European Union as regards emission reductions, and from the EU Fuel Quality Directive (FQD) and the Renewable Energy Directive (RED). A further motivation is the Finnish energy tax reform (1 January 2011) that gave a tax incentive to bio components meeting the sustainability criteria.
The Renewable Energy Directive (RED, 2009/28/EC) sets a binding obligation to increase the share of renewable energy in transport by 2020 to ten percent calculated on the fuel energy content. Moreover, the Directive contains detailed sustainability criteria for biofuels as well as minimum requirements for reducing their greenhouse gas emissions over the life cycle.
In the new national legislation on biofuel distribution requirements taking effect on 1 January 2011 Finland has pushed her target up to 20 percent. This is considered viable since Finland is able to increase her domestic biofuels production with new technologies so to benefit from the so called double credit mechanism provided by the Directive. The double credit biofuels will be manufactured from raw-materials such as waste, residue materials, non-food cellulosic plant materials and lignocellulose.
The Renewable Energy Directive is complemented by the Fuel Quality Directive (FQD, 2009/30/EC) the goal of which is to cut the carbon intensity of fuels by ten percent by 2020, six percent being the binding obligation and four percent coming from voluntary measures. The obligatory part of the reduction is achieved by increasing the proportion of biological components in fuels.
The Fuel Quality Directive defines the maximum amounts of bio components in fuels as follows: Petrol may contain up to 10% v/v ethanol and diesel up to 7% v/v FAME (Fatty Acid Methyl Ester), being typically biodiesel manufactured from rapeseed. These national obligations have been defined in the Government Decree on Fuel Quality (1 January 2011).
The energy tax reform changed the basis of the Finnish fuel excise tax as from the first of January 2011: Fossil fuels and biofuels are subject to an energy content tax proportionate to their energy content, and to a carbon dioxide tax based on fuel's carbon dioxide emissions. Biofuels benefit from this reform.