BOGA offers a vision for the development of transport and fuels of the transition to decarbonization until 2045

If the state does not create a Fund for energy efficiency in transport this year, next year it will be impossible, experts from the oil and gas association are categorical

Energy / Bulgaria
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"We tried to create a vision of what transport will look like in the next ten years, with the view that it is clear to everyone that the energy transition in transport has to happen in one way or another. Whether it will be influenced by legislation from Brussels, whether it will be for environmental reasons, but it has to happen. Unfortunately, we find that the state does not perceive this sector as a priority", commented the chairman of the Bulgarian Oil and Gas Association (BOGA) Svetoslav Benchev at a press conference. He referred to the absence of the transport sector, both in the energy strategy and in the Integrated Energy and Climate Plan. This is also the main reason why BOGA experts were ambitious to develop a vision of exactly how to make the energy transition in transport happen, so that sustainable mobility is guaranteed, without the presence of which huge problems can arise.

"There is no idea or vision of what will happen in transport," said Benchev, reminding that this sector is a huge consumer of energy on the one hand and on the other - it is already part of the energy policy of every EU country. These are simply the requirements and the methodology for calculating energy in each country, he added.

There are several parameters laid down in the BOGA vision, the main one being that the transition must happen meaningfully and at a good socio-economic cost in order to be successful. As the chairman of BOGA put it, "Otherwise, things will happen, as with the coal plants in the country. If we don't act now, in a few years it will become extremely difficult, extremely complex and extremely expensive for consumers."

"The principles on which the strategy is based concern the question of what fuels will be produced, how and where they will be produced, who will produce and deliver them, the diversification of sources of energy products, which is especially important given the situation as a result of the war in Ukraine, .is the ban on Russian oil, the supply problems that will occur with deliveries through the Bosphorus," explained Svetoslav Benchev. The document also touches on the question of transitional fuels and what they will be, "since we cannot go completely and suddenly either to electric cars or to biofuels", which applies especially to heavy transport equipment. He also drew attention to energy efficiency in transport. "We hear about how buildings are and will be rehabilitated, but no one is saying what will happen in transport. And transport is the sector with the greatest intensity, not only in Bulgaria, but also in the EU," he reminded.

"This also applies to decarbonisation in transport - how will it happen and with what fuels: propane-butane, LNG, electricity? Electrification of fuels means that new fuels must be added to those fuels that are on the market.

It is most important to have a balance between price, quality and available quantities, because some of the fuels that we call alternative are so expensive that they cannot even be applied on the territory of the country," he reminded. According to him, the electrification of transport is not least. The state's lack of vision of what is about to happen is evident even in the presented energy strategy of the Ministry of Energy, which does not even include the possible consumption of electricity that electric cars will consume in the coming years. "We did a simple calculation that if even just half of the motor vehicles go electric, that means two new nuclear reactors - 2 GW, but they are not even included in this calculation (the strategy of the Ministry of Energy n.b.)". he reminded.

The time parameters of the vision presented by BOGA are "roughly" divided into three periods - from this year and the next until 2035, for the period 2035 - 2045 and after 2045, for which, as Svetoslav Benchev expressed it, "one can only guesswork', as some of the technologies, especially in heavy-duty vehicles such as hydrogen and batteries, are still in the development stage.

"The policies that must be followed are related to preserving the production of fuels in the country. This is extremely important because the refinery is Bulgarian. It feeds us and will continue to feed us with fuels, but it will have to modernize and start producing new types of fuels - carrying out co-processing (mixing conventional with biofuels) in production, developing the possibility of recyclable fuels, i.e. . from used oils, etc. All this speaks of turning the refinery into a petrochemical complex, which enables the presence of these fuels on the territory of the country", pointed out the chairman of BOGA.

Regarding biofuels, the opinion of experts from the association is to stimulate current and future producers so that they carry out their activities on the territory of the country. However, legislative measures are also necessary for this. This also applies to the domestic production of sustainable aviation fuels, which will also need legislative support and even financial incentives. "For this thing to happen, and we must be one of the leaders in Europe, because we have the opportunity and the capacities that can implement this, but we do not have a legislative framework," Benchev pointed out.

The vision also emphasizes the project, which has been talked about for a long time already - the construction of the Alexandroupolis-Burgas pipeline, through which "it will be necessary to ensure the availability of oil on the territory of the country in order to be able to bypass the Bosphorus and have the opportunity in every one moment for the refinery to be guaranteed'. According to BOGA, this oil pipeline should also have a product pipeline, through which oil products will initially reach the territory of Bulgaria, and subsequently unconventional biofuels and other liquid fuels, which will also be part of the market and competition in the country.

Establishing transport connectivity with neighboring countries is one of the main requirements laid down in the vision, as it guarantees the security of the country. "If something happens, we will not be able to secure our country, since we do not have proper railway connections with Greece, we only have two bridges with Romania. So, it is necessary to move towards creating connectivity with neighboring countries and opportunities for more serious imports, which can later be used for alternative fuels as well, stated Svetoslav Benchev.

From this point of view, it is of utmost importance to “build the necessary infrastructure for electrification in transport, so that the electricity reaches the highways.

"The government should start investing in the construction of such infrastructure, and first of all, all the administrative regimes that are now getting in the way should be removed.

The state should stimulate the construction of RES capacities around these charging stations in the future, so that in the end this transport can be truly green and the energy that goes into electric cars can be green - produced locally, not transported, not from thermal power plants, so that it can be said that electromobility is really clean", added the chairman of the association.

It is no less important that the transition in transport is socially tolerable. "If we don't have a transition period in transport of at least 10 years, during which we can decarbonize it, for example through propane-butane, through liquefied natural gas and HVO biofuel, the prices in Bulgaria will go up very ominously. Therefore, there should be a period in which to stimulate cleaner mobility. And stimulation not only in words, but through measures. For example, tax incentives for switching from petrol to LPG, recyclable fuels, parking in green zones for free or at a reduced rate so that people switch to these cleaner fuels over the next 10 years. I realize that these are indeed fossil fuels too, albeit with less emissions, but we cannot make the energy transition in the next 10 years any other way. This applies mostly to vulnerable groups of the population, because there is a risk of limiting mobility and difficulties", comments Svetoslav Benchev.

In addition, according to him, excise rates should not be increased in the next 10 years. He reminded that there is a directive in Brussels that has not yet received the approval of the member states, but would lead to a serious jump in fuel prices. For example, the price for the end user of gasoline would increase by 10 to 16 cents per liter, and of propane-butane - by 30 cents per liter. At the same time, there is also the challenge of emissions trading in transport, which must take place from 2030. If the increase is added to this, when the directive on excise rates for transport fuels is adopted, then the situation will become serious, he warned the president of the association.

BOGA also refers to the need to create a Fund for energy efficiency in transport, which will start operating from this year or the next. "After a year, this will no longer be possible, and if the state does not create a Fund to contribute funds, the differences will be huge," Benchev said. In his words, in order for the energy transition to happen, there must be support for transitional fuels. This means that the state will need to reduce rates and ease administrative procedures for the bituminous fuels. Support for electromobility is also needed.

Sustainable mobility development goals in transport require robust legislation, fostering innovation and an easy-to-apply regulatory framework, as well as competitive delivery prices, the chairman of the Bulgarian Oil and Gas Association was categorical

Electrification is not the only solution for decarbonization in transport, commented Venelin Marinov from BOGA. He presented the progress of different biofuels in the sector internationally, including those of a new generation by capturing CO2 from the air and producing it using green hydrogen.

According to Marinov, the current refinery in Burgas should become the "refinery of the future". "That means building it as an energy center connected to an industrial grid that will have to run on blue or green hydrogen."

BOGA representative Maya Blagoeva, for her part, focused on transitional fuels such as propane-butane, and in the future, a switch to bioLPG, with the potential to reduce CO2. As a motive for this type of fuel, Blagoeva indicated its mass. 40% of the world use propane-butane as a type of fuel for their cars. There are 27 million cars using this type of fuel in the world, Blagoeva explained. Referring to the easy conversion of the fuel base to the cheaper and less emitting fuel, she pointed out that this is an opportunity for the use of LPG in transport in the transition period. But together with other sectors, there are 200 million people using propane-butane in the world, she reminded. Gas fuels will continue to be an alternative, Blagoeva said categorically, referring specifically to social tolerance.

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