Greenhouse gas impact of marginal fossil fuel use

When assessing the benefits of biofuels, they are compared to the fossil fuels they replace. In the framework of the European Renewable Energy Directive and the Fuel Quality Directive, this is done by comparing the lifecycle greenhouse gas emissions of biofuels to a ‘fossil comparator’. This fossil comparator is based on the average greenhouse gas intensity of fossil fuels brought on the EU transportation market. Unconventional oils such as extra heavy oil and bitumen (tar sands), kerogen oil (oil shale), light tight oil (shale oil), deep sea oil and synthetic products such as gas-to-liquids and coal-to-liquids, typically have higher carbon footprints than conventional oil mainly because the effort required to extract, refine and/or synthesize them is much larger than for conventional oil. As the share of these unconventional oil-based fuels gradually rises in the total fuel supply over time, the greenhouse gas footprint of the average fuel consumption also rises.

Even for conventional oil production fields, because larger existing fields get depleted, the extraction efforts increase while smaller fields are taken in operation . Both effects increase the carbon footprint of conventional oil. Therefore the fossil comparator should be adjusted upward to reflect these changes. Furthermore, in reality biofuels do not displace the average of fossil fuels brought on the market, but the marginal ones; those fossil fuels that are ultimately not produced because of a relatively lower and enduring demand following the introduction of biofuels. The marginal fuels are the resources that are most sensitive to long-term marginal price reduction, which is the main mechanism through which biofuels displace fossil fuels.