De-risking renewable fuel technologies through transnational pre-commercial procurement of renewable fuel industrial value chains

Expected Outcome

Project results are expected to contribute to all of the following expected outcomes:

• Public authorities, industry, technology providers, energy producers and consumers profit from de-risking of cost-effective essential value chains of those renewable fuel technologies that can contribute to domestic commercial fuel production beyond 2030 customized to their needs, from improved access to better financing exploiting synergies across funding schemes, and from more effective market uptake, business models, increased competitiveness, and commercialization opportunities.
• Energy producers, clean tech manufacturing industries, researchers and consumers benefit from improved performance, lower environmental impact, security and competitiveness of ad-hoc renewable fuel technologies compared to existing ones, as well as new market opportunities.
• Community, public authorities and industry benefit from sharing the de-risking cost and reducing it by engaging several competing solution suppliers/technology providers in parallel, boosting transnational public and private investments in de-risking and attracting new players to tackle supplier lock-in issues
• The implementation of the Strategic Energy Technology Plan (SET Plan) Action of Renewable Fuels and Bioenergy is supported and facilitated by better alignment of public and private R&I priorities and of funding mechanisms.
• Policy makers and regulators are provided with evidence to accelerate permitting procedures and increase the public acceptance of innovative and sustainable renewable fuel projects improving the regulatory framework.

Scope

An exceptional effort is needed to develop, demonstrate and de-risk essential renewable fuels technologies and establish their industrial value chains in a cost-effective way to cover the EU needs where renewable fuels are the main long-term solution. Proposals should steer the development of these technologies at EU level and bring them to the market. Pre-commercial procurement of R&D, validation and possibly, first deployment of industrial value chains of essential renewable fuel technologies is considered an effective tool to de-risk such activities and overcome the “valley of death” because real take off by engaging primarily concerned contracting entities is expected. The scope of this action is to design and bring industrial value chains of essential renewable fuel technologies at TRL 8 by the action end. The competitive development in phases of entire industrial value chains should built upon existing knowledge on technology and value chain readiness based on existing EU projects and studies, thus speeding up the de-risking.

‘Transnational buyers’ could be public plus possibly one or more private procurers, and that provide similar services of public interest. The buyers will collectively develop and implement the pre-commercial procurement of R&D services from a number of providers and designate a lead procurer to award the contracts. The procurement must be open to providers of R&D services established in any EU Member States and Associated Countries.

Inclusiveness of a broad range of public and private procures across EU and Associated Countries and across national borders is encouraged, to effectively share the risk and benefit from creating in the EU market readiness of industrial value chains of essential renewable fuel technologies. Public and private EU airport and port authorities and their respective managing bodies, aircraft operators and shipping companies, other state, regional or local authorities and bodies governed by public law or their associations, are some examples of expected public[1] and private procurers with an incentive to improve solutions in areas of public interest, such as reduction of greenhouse gas emissions from energy supply as fuels.

The consortium is encouraged to plan activities during the project to raise awareness to the R&D providers that will win PCP contracts about unlocking and increasing their investment capacity in the field of renewable fuel technologies, for example by using possible combinations of the PCP procurement contract with additional support for companies from the EIC, InvestEU, regional funds or possibly other sources of Union funding. Participation of public contracting authorities and entities managing or funding such funds in the project is encouraged. In addition, the procurers should include in the proposal what will be their planned approach for deployment in case the PCP results in successful solutions; this could be through a combination of deploying a limited set of solutions already during the PCP project and/or foreseeing a deliverable that prepares follow-up procurement to purchase (larger volumes of) such type of solution(s) after the PCP.

Essential value chains to de-risk should be based on identified technologies by our studies[2] (i) – vii) below) as those that can contribute essentially to domestic commercial fuel production beyond 2030, and possibly other that can be demonstrated at commercial scale by the end of the execution phase of the project[3]:

• Production of advanced bioEthanol and further processing into ATJ-SPK
• Biomass Gasification and FT-Synthesis to produce FT-SPK
• Production of BioMethanol for further processing into MTJ
• Hydrotreatment of Lipids from marginal/contaminated lands to produce HEFA
• Biomass Pyrolysis and Upgrading or co-processing to produce biokerosene and bio-heavy fuel oil
• Biomethane from AD and Gasification and Methanation to produce biomethane for shipping or further processing into methanol (methanolysis) for shipping
• E-Methanol production from CO2 and renewable H2 for shipping

Industrial value chains of the essential renewable fuel technologies should be developed based on domestic sustainable feedstocks across EU and Associated Countries and on also creating synergies across all end use energy and transport sectors for markets and production facilities for renewable fuels.

Hydrogen production as end-product is not in scope.

[1] Public contracting authorities and entities as defined in REGULATION (EU) 2021/695, Directives 2014/24/EU and 2014/25/EU

[2] a) Study on Development of Outlook for the Necessary Means to Build Industrial Capacity for Drop-in Advanced Biofuels - European Commission, b) How To Mobilize Industrial Capacity Building For Advanced Biofuels

[3] All hydrogen used to the production of the synthetic fuels should comply with the EU legislation on the renewable and low carbon methodology, i.e. the processes of Steam Methane Reforming using fossil fuels for the production are out of the scope, as there is no RI associated to these methods.