Image: Topias Dean, Sitra (www.sitra.fi)
According to a new report, the EU needs to prioritise domestic biomass for materials and chemicals. We gathered some questions and answers about the report.
Report: EU Biomass Use in a Net-Zero Economy
This new study by consultancy Material Economics is the first to model the EU’s 2050 demand for biomass feedstocks from all sectors and to compare this to a realistic biomass supply.
Most scenarios for a transition away from using fossil fuels foresee a large increase in biomass use. This report overviews the future demand and supply of bioresources in the EU, and envisages the optimal uses of bioresources in the transition to a net-zero economy.
Material Economics produced the new analysis in collaboration with the Energy Transitions Commission and European Forest Institute, funded by Climate-KIC, European Climate Foundation, the Finnish Innovation Fund Sitra and Vinnova. The study finds that the optimal future for biomass use is highly targeted, prioritising the most valuable uses where the properties of biomass make it the greatest contributor to a net-zero economy; or where alternatives are likely to remain too expensive.
EU Biomass Report: Questions and Answers
What is the background and motivation of this study?
The demand for biomass in the EU is increasing. Bioenergy use alone has grown by 150% since 2000 in response to policy incentives, and climate scenarios envision massive additional growth. In addition, biomaterials’ use is likely to grow significantly, and the availability of sustainable supply to meet this increasing demand for biomass is far from certain. Biomass production and extraction profoundly affect natural systems, and while we need to stop climate change, we must address the ongoing decline in biodiversity. International markets for food, feed, fuel, and fibre also link EU consumption to continuing global deforestation and other changes in land use. There is therefore good reason to revisit and reappraise the role of biomass.
What is the key message of the study?
The findings show an urgent need to prioritise future biomass use, as current hopes for increased use far exceed realistic sustainable increases in supply. With new priorities and rapidly shifting economics, the future of biomass use looks to differ radically from what was previously imagined. Biomass will play valuable roles in future materials and chemical production and in some aspects of energy supply, but biomass is scarce and valuable, and it cannot be viably used, at scale, in all the applications now envisioned.
How does all this relate to the EU Green Deal and the Fit for 55 package?
Both policy and business strategy should adjust to a bigger role for biomaterials and to a selective use of bioenergy focused on a few niches that maximise value in the context of a rapidly electrifying energy system.
We hope that this study can contribute to ongoing policy debates and pending business decisions. Policy already shapes the use of biomass heavily, having overseen a 150% increase in bioenergy use over the last two decades, but it has not always succeeded in steering biomass use towards the highest-value uses. Looking ahead, this study finds that a value of several billion euros a year as well as uncounted biodiversity impact is at stake in affecting a course correction.
If bioenergy is not used in power systems, heating, or passenger vehicles, can the EU meet its climate targets?
Yes, electricity generation with wind and solar, heat pumps, and electric vehicles already provide competitive solutions to decarbonising these sectors, and the technology costs are expected to further decrease in the future. A net-zero transition with lower biomass claims is more cost-effective by about 36 billion EUR a year in 2050. Achieving this scenario depends on the effective deployment of alternatives to bioenergy across a wide range of applications, such as green hydrogen, synthetic fuels, power system flexibility and the availability of clean electricity. Resource efficiency and a circular economy also stand out as key factors to enable a high-value scenario, alongside technological development in alternatives to bioenergy.
How will the cost of bioresources develop in the future?
The future marginal production cost of biomass is expected to be around 6-8 EUR/GJ in the EU. This is based on the cost of producing additional biomass from energy crops. The cost of bioresources depends on multiple factors and varies across regions, making price estimation difficult. However, if demand is higher than supply, the cost will go up due to competition for a limited resource.
Why is importing more biomass not considered a feasible option?
Countries worldwide confront an acute need to reduce the pressure on natural systems. But more importantly biomass is not automatically carbon neutral. Increasing biomass supply can lead to CO2 emissions from natural systems, especially from forests, reducing the net climate benefit of replacing fossil fuels or materials with biomass.
It is unlikely that the EU can import much more biomass for energy and materials. Even today, additional supply of food and feed globally comes at the expense of environmentally damaging land conversion, and needs are growing fast.
A major increase in imports is unlikely to prove a viable strategy. The global equation for sustainable biomass supply is highly stretched. Unlike in the EU, global food production is increasing rapidly, driving a rapid ongoing expansion of cropland that is already a main cause of global deforestation , in turn one of the main drivers of global biodiversity loss. In this situation, imports to the EU of energy crops grown elsewhere for materials or energy entail a high risk of inducing even faster land-use change. The same dynamic applies to increased supply of wood for energy use. Increasing biomass supply can lead to CO2 emissions from natural systems, reducing the net climate benefit of replacing fossil fuels or materials with biomass.
What are the key sensitivities in the analysis?
A key sensitivity is the assumed technology improvement of platform technologies, such as green hydrogen, renewable electricity, batteries, and non-fossil CO2 as a feedstock to hydrocarbon production.
Many solutions depend on new infrastructure for the electrification of heat, charging of vehicles, power transmission and distribution, electrification of industrial processes, and distribution of hydrogen, for example. While many solutions can be lower-cost than biomass, they will only materialise if the infrastructure is there to enable their deployment.
When will we need to prioritise the biomass uses with the highest value?
This study focuses on 2050, in line with the EU net-zero target. Achieving net-zero emissions in the EU will require significant changes in all sectors of the economy, and the course of the transition will depend on the pace of technological development and adoption of low-emission solutions. The study shows that materials uses of biomass – for timber, fibre, and chemicals – are expected to increase in value in a transition to net-zero, while technological advances are creating new alternatives and increasing competition to bioenergy. To achieve an orderly and timely transition and to avoid misplaced investments and misallocation of valuable bioresources, policy needs to level the playing field to enable crucial contributions of bio-based materials in the transition away from fossil fuels and feedstock.
While far in the future, 2050 is now only one investment cycle away for long-lived industrial and energy assets. Given the major shift in economics now underway, policies need to begin gradually shifting to only encourage biomass uses that have a credible long-term role, especially where major investments are required.
What is EJ?
We use the exajoule (EJ), an energy unit, as the common measure throughout this report, even though materials are usually measured by mass or volume. Materials have been converted from mass (kg) or volume (m3) to energy by the specific energy density of the material. For reference, 1 EJ corresponds to 55 million tonnes of wood, or the harvest on 5–7 million hectares of land used for energy crops.
Does the study consider all possible bioresources to include a broad enough selection of raw materials?
Yes. The supply of biomass for materials and energy comes from three main sources: forestry, agriculture, and waste streams. These can be further divided into subcategories. Forestry is the biggest supply source, with more than half of all biomass supply.
It is important to also note that biomass produced for food is not included in the supply for materials and energy in the analysis.
How have the possibilities for sustainable intensification been looked into?
Sustainable intensification – meaning the improvement of biomass production without causing negative impacts to environment – was not analysed in detail. But the increase in biomass supply from forestry and agriculture does to some extent include higher sustainable intensification. The supply values in this study are based on other studies containing varying assumptions and data about the intensification of future biomass production.
How does the 30% conservation rate fit into this observation?
The EU’s biodiversity strategy for 2030 has proposed that at least 30% of land should be committed to nature conservation. While such conservation is critical to avoid biodiversity loss and ecosystem collapse, it also narrows the potential for sustainable supply of biomass.
The available supply in this study is seeking to be in line with currently envisioned EU policy (e.g., the 30% conservation rate). That is one of the reasons why this study has lower supply numbers than some other estimates that do not take this into account.
Questions specific to Finland
What do the results of the study mean for Finland?
The study does not look at individual countries, and therefore drawing strong country-level conclusions is not possible. However, some general implications can be drawn from the analysis when we consider Finland.
Finland is rich in bioresources and in the tradition and expertise of their management and utilisation. On the one hand, the results portray a positive outlook for Finland: increasing demand for biomass in replacing fossil-based materials is a positive signal to the Finnish bioeconomy. On the other, Finland’s vast bioresources are not limitless, and the need to prioritise them to their most valuable uses also applies to Finland.
Bioenergy currently plays a major role in the Finnish energy system and is increasing due to the phasing-out of coal and peat. What does this study suggest Finland should do now?
Almost a third of Finland’s primary energy use comes from bioenergy, and it plays a significant role, especially in heat production for district heating and industry, and biofuels are widely used in the transport sector. The development of other clean alternatives, such as heat pumps and electric vehicles, and increasing demand for biomass in high value uses in materials, fibre and chemical feedstock may lead to eroding competitiveness for bioenergy in Finland as elsewhere. Therefore, it is important for Finland to carefully evaluate possibilities to replace peat and coal in energy production to avoid investing in stranded assets, and to direct biomass to high value uses.
Bioenergy is an important source of energy especially in district heating, pulp and paper production, and in other industrial applications.
Does this study suggest stopping the use of bioenergy in these applications? And what would replace heat and power production?
The analysis finds that both policy and business strategy regarding bioresources should adjust to a bigger role for biomaterials, and to a selective use of bioenergy focused on a few niches that maximise the value in the context of a rapidly electrifying energy system. Much of this applies to Finland too.
However, some of the niches in which bioenergy use can be highly valuable have a big role in Finland. For example, in pulp production the continued use of by-products is part and parcel of the production process. Also, the use of bioenergy with carbon capture and storage (BECCS) can be applied in Finland, as it seems to be the most competitive where large-scale bioenergy is anyway likely, such as pulp production, waste incineration, and facilities for biofuels production.
Yet along with its role as feedstock for chemicals and materials, there may be a strong use-case for biomass for industrial heating in specific applications. Industry often requires a constant heat supply, and in some contexts it may prove costly to provide it with electricity supplies that include large shares of variable renewable energy. Whether or not biomass is a better fit depends on the precise needs of different industries.
For low-temperature heat, bioenergy faces strong competition from industrial heat pumps. Bio-based options would thus be most competitive when they can use cheap residues or waste that could not be used elsewhere economically, and in periods when electricity prices are high.
Source: Sitra, 29 June 2021
Samuli Puroila, Specialist, Climate and nature solutions, SitraEU Biomass Use in a Net-Zero Economy
Janne Peljo, Project Director, Climate and nature solutions, Sitra
Tuula Sjöstedt, Lead, Communications and Public Affairs, Sitra