FAQ : Use of ethanol petrol, E85 and flexi-fuel vehicles (FFVs)
FAQ
1. Why does consumption go up with E85 and go down with essEnce5?
The calorific value (internal energy) of ethanol is lower than that of petrol (30% less). In E100 (100% ethanol) this property leads to an over-consumption of about 40% - 50%. With the addition of 15% petrol, the mixture is more efficient, and over-consumption is reduced to 15% - 30%. For essEnce5, the effect of ethanol is positive since it oxygenates the fuel which improves combustion and therefore engine efficiency.
2. What are the advantages of E85 for distributors, government administrations, or companies compared with other fuels?
With E85, the ratio of investment cost to CO2 gains is very promising. For example, E85 emits three times less CO2 than natural gas, while the cost of adapting a natural gas pump to E85 is CHF 15,000 (best case scenario). By comparison, the creation of a natural gas pump costs about CHF 300,000. Moreover, FFVs, unlike natural gas vehicles, can fill up anywhere since they run on both conventional petrol and E85. The price of an FFV is almost the same as that of the basic model, which is not the case for natural gas vehicles.
3. What guarantee is there that the CO2 reductions from imported products will be as great as those that you calculated for Swiss bioethanol?
In the case of sugar cane, the energy balance and the CO2 balance are very interesting, thanks to such factors as the use of manual labour in the fields, agricultural yield, and the use of bagasse (cellulose) to provide the industrial heat required for the transformation process. Moreover, boat transport has only a limited impact on the global CO2 balance. However the values given should be validated.
4. So isn't it better to import everything?
Alcosuisse is trying to encourage domestic production for various reasons - to make Switzerland play its part (since almost 3/4 of all CO2 emissions are produced in the northern hemisphere, we cannot demand measures solely from the countries of the South), to contribute to energy independence, to launch a state-of-the-art industry, to find new markets for Swiss agriculture, etc. Other European countries have chosen to support their local production through a proactive policy. Also, world production is struggling to keep up with demand, which is pushing prices higher.
5. The development of ethanol production in Brazil carries its own risk for the environment and for workers' health. What can be done to remedy the situation?
Alcosuisse has suggested that a provision be added to the new Law on Taxation of Mineral Oils, which would provide for tax exemption to be subject to compliance with sustainable development criteria. Parliament has taken these arguments on board in the text of the new Law. Only products obtained from socially and environmentally acceptable production chains will qualify for tax relief. Similar requirements are under discussion on the European level and the UN is working on a sustainable label for biofuels. Support measures for biofuels are an important element in the establishment of sustainable development requirements.
6. Isn't it a misnomer to talk of bioethanol when agricultural products are not necessarily organically produced?
The "bio" prefix refers to the vegetable nature of the raw material (biomass) as against synthetic ethanol, which is made from petroleum. The term agrofuel applies only to products obtained from agricultural production, which is not the case for all biofuels.
7. Which way are ethanol production prices likely to go in Switzerland?
At the moment, the production price is just over 1 franc a litre, which works out at a retail price of CHF 1.20 a litre ex works Delémont, after taking account of all transport, handling, stocking, quality control, etc. The production price should soon drop to about 1 franc a litre.
8. How much does Brazilian ethanol cost?
Before answering that question, we should mention that dehydrated bioethanol (bioethanol fuel) is subject to very high requirements which none of the ethanols produced in Brazil can meet. However, the price would be about 85 to 90 centimes a litre in Switzerland for the required quality. As a matter of fact, that is already the market price today irrespective of the production costs. We would also mention that there is strong demand for Brazilian bioethanol, in both the domestic and international markets. Also, the new locations and installations are less well situated, and these two factors are pushing prices higher. On the other hand, for Swiss ethanol, the falling cost of raw materials and improved production processes are pushing prices down, so the spread between the two should narrow considerably.
9. Are the people who are now starting to distribute E85 and essEnce5 sure that the new Law on Taxation of Mineral Oils will include tax exemption for bioethanol?
This is provided for in the new Law. The enabling legislation (Ordinance) will set out the details of its implementation. However, there is definitely the political will to provide tax relief for biofuels, since there is consensus on the need for support for this type of renewable energy.
10. What are the stakes for Alcosuisse and for national production if this new law is passed?
It is almost a foregone conclusion that both local and imported products will be tax exempt. It is therefore essential for Swiss production that the law makes some provision for local production. Parliament has expressed this in the Law. The Federal Council does not seem to share this opinion and does not wish to have to apply the principle. The final decision is not yet known.
11. Where does your project stand in relation to the "climate centime"?
We have had numerous contacts with the Swiss Petroleum Union, which is well acquainted with our dossier. The Climate Cent Foundation wants to support biofuel distribution rather than its production.
12. What will happen if Alcosuisse loses its monopoly?
Alcosuisse is not seeking to hide behind a monopoly or to be the sole player in the market; its idea is rather to grant licences to those that wish to import ethanol. Alcosuisse would like these imports to be conditioned by a positive result in terms of sustainability and by a guaranteed market for a portion of the Swiss production. If the monopoly should end, Alcosuisse would be one of several players in the Swiss ethanol market. It would have the advantage of already existing installations and its experience in the field.
