In recently published article in Biomass and Bioenergy journal, researchers from Finland and Norway found that policy choices will have strong impacts on the allocation of biomass use between heat and power production, and the production of liquid biofuels in European Economic Area. Moreover, it seems that European forest industry production will not be affected much by the increased competition for biomass with the energy sector. Click to continue…
Background
The Directive 2009/28/EC on renewable energy sources set an ambitious 10% mandatory target for a share of renewable energy in the transport sector in the EU by 2020. Various measures, including subsidies and obligations to blend biofuels into conventional petrol and diesel fuels have been implemented by the member states to achieve that goal. Such policy already in 2015 led to an increase in the share of biofuels in transport fuels in the EU28 to 4.2%. Nevertheless, European transport sector is still heavily dependent on fossil fuels and there is increasing political pressure to decarbonize it in coming years.
>> READ MORE: Despite strong renewables policies, the EU is still highly dependent on imported fossil fuels!
Majority of biofuels is currently made from non-lignocellulosic biomass, but it is expected that woody biomass will play important role in biofuels production, in the new bioeconomy era in Europe.
>> READ MORE: The bioeconomy should be a new way of thinking – interview with Dr Marc Palahi
Without any doubts, the possible increased use of wood in the production of liquid biofuels will rise a competition over biomass and thereby wood prices. This may only force some of the other users of wood, for instance heat and power plants, to seek for alternative fuels or technical solutions. It is expected that increased use of biofuels will be covered by fuels produced from logging residues, wood chips and round wood in Europe.
Results
Researchers from Natural Resources Institute Finland (LUKE) and Norwegian University of Life Sciences (NMBU), using the EFI-GTM1 (a global model for the markets and trade of forest biomass and products) analysed the economic potential and possible impacts of increased production of wood based biofuels on the forest industries and production of wood based heat and power in the European Economic Area.
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They found that that policy choices will have strong impacts on the allocation of biomass use between heat and power production and the production of liquid biofuels, and therefore the policy makers must have very clear goal setting for the preferred ways to solve the shift from the fossil fuel based energy system to a less carbon intensive one.
Dr Maarit Kallio from Natural Resources Institute Finland, one of the authors of the study, said:
The results of our study indicate that the development of sustainable bioeconomy is under control in Europe. Large investments in facilities that use logging residues, mill residues or possibly even round wood in the process of biofuel production are still in the initial phase of the development, and it will take some time before they will operate with full planned capacity. Our results suggest that the cost competitiveness of wood in heat and power plants compared to other fuels and prices of and support for biofuels will have drastic impacts on the allocation of biomass use between the production of heat, power and liquid biofuels in Europe. These factors are largely affected by policies. And that is why, policy makers should have clear goals when designing the policies so that biomass will go to the end uses providing the desired societal benefits.
Furthermore, researchers found that the European forest industry production will be rather little affected by the increased competition for biomass with the energy sector.
>>READ MORE: Drivers of forest harvesting intensity patterns in Europe
Figure below shows projected harvests of sawlogs, pulpwood and forest chips in the EEA when (i) demand for energy wood stays at 2010 level (“Now new bioene”), (ii) wood use increases in heat and power production but no wood based biofuels enter the market (“No BTL”), and (iii) all bioenergy increases contributing to limit climatic warming to 2 °C (“Bioene 2 C”).
Professor Birger Solberg from Norwegian University of Life Sciences, one of the authors noticed:
Our study suggests that the competitiveness of the European forest industry is rather good regarding increased competition for biomass from the energy sector, as long as the competing regions outside Europe are facing similar biomass demand challenges. What makes the European forest sector strong in the context of bioeconomy development is the sustainable forest management and that at present the annual forest growth exceeds the harvests. Abundant biomass resources in Europe will help the European forest industry to maintain its market shares and, at the same time, facilitate the shift from fossil fuel based energy system to renewable one, with biomass being one important source of renewable energy.
Source: A.M.I. Kallio, R. Chudy, B. Solberg, Biomass and Bioenergy Prospects for producing liquid wood-based biofuels and impacts in the wood using sectors in Europe, Biomass and Bioenergy. 108 (2018) 415–425. doi:10.1016/j.biombioe.2017.11.022.
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Main photo: Metsä Group’s bioproduct mill in Äänekoski – the largest investment of the forest industry in Finland. Author of the photo: Rafal Chudy
1About the global forest sector model, EFI-GTM
The EFI-GTM is a multi-regional and multi-periodic partial equilibrium model of the global forest sector. It integrates forestry, forest industries, final demand for forest industry products and international trade in wood biomass and forest industry products. It includes 57 regions
covering the whole world, but the regional disaggregation is most detailed in Europe. Most European countries are modelled as individual regions. The updated version used in this study encompassed about 30 forest industry and energy sector products, 5 round wood and 3 forest chips categories, 4 recycled paper grades, and the by-products of the forest industries.
The partial equilibrium approach implies that the other sectors of the economy than those related to the supply and demand of wood and forest-based products are only considered indirectly. The model finds the competitive market equilibrium prices and market equilibrium
quantities of production, consumption and trade for products and regions included. Concerning transport biofuels, we include the trade in wood biomass that can be used in production of biofuels in any region where profitable, but we do not include further trade in biofuels although such trade can take of course place in practise.