Low carbon liquid fuels enable climate neutrality in transport by 2050

Fuels Europe has presented a study that shows how low carbon liquid fuels (LCLF) could enable the transport sector to contribute to EU climate neutrality by 2050. The path shown in the study also shows that the transport sector can save 100 million tons of CO2 emissions per year by 2035.

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LCLF play a strategic role in the transition to a climate-neutral economy by 2050, especially in sectors where there are currently no equivalent technological alternatives. Examples of this are aviation, heavy goods transport or ship transport.

In order to save 100 million tons of CO2 emissions in the transport sector every year from 2035, the right policy framework must be created that enables the creation of a market for LCLF, support investment mechanisms and mitigate investment risks. The following policy principles are central to achieving climate neutrality by 2050: Creating a market for LCLF with a significant carbon price signal, either through a dedicated cap and trade mechanism on emissions from road fuels or a WTW carbon intensity standard for fuels. The CO2 standards in vehicles must be amended and all overlapping fuel policies should be reformed or simplified. In addition, fuel taxation should be revised by accounting for the carbon-intensity, to incentivise investments in advanced renewable fuels. Investors should be put in the best conditions by ensuring regulatory stability, allowing access to private and public funds, favourable fiscal treatment and protecting the investments from carbon-leakage.

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