A case for Common European Biomass Policy (part 2)

The issue of biomass policy has been very much prominent on policy-makers’ horizons over the course of last decades, as the EU and its Member States struggled to cope with the climate change and a coordinated response to it. In brief, biomass (and more generally biofuels) was initially considered a renewable source of energy par excellence. Still, with developments and advances of the wind and solar power generation, this feeling subdued somehow. Biomass started to look “dirty”, deemed to prolong the coal use, and as if the wind and solar power generation had a zero carbon footprint.

Greenhouse using captured CO2 (c) Forest Business Network

Biomass carbon capture and sequestration

As for the ability of biomass to accumulate carbon into vegetation and consequently to the soil, this is only a natural process of photosynthesis, well known to all of us. The biomass life cycle assessments naturally oscillate around zero, with different detailed results depending of climatic and technology conditions analysed and ways of weighting of various factors into account. Still, the primary logic is overriding – the amount of carbon absorbed is then largely speaking released back to the atmosphere.

Yet, if we do not burn biomass at a given moment, the amount of carbon captured within is not released back to the atmosphere. At this point, we need to note the storing capacity of biomass that pertain to both energy and CO2. In particular, this applies to processed biomass that can contain any form of natural biomass, as provided for by second generation technologies, for example BO2.

In other words, biomass is a natural technology of carbon capture and storage, for long thought for a clean use of coal, lignite and natural gas. As it is conceived, the CCS technology should allow for capturing the CO2 emitted during generation and for its sequestration in the earth. So far, the technology proved to be very costly, and its development for the industrial application takes extended amount of time. Its key problem is ways, means and long-term consequences of storing large quantities of compressed CO2 underground. It is hoped the technology is going to mature and solve the problems thus allowing for clean applications of traditional fossil fuels.

As a version of the traditional CCS, the so-called biomass CCS, or bio-CCS has already been discussed, for example recently by the European Commission [note 1]. Yet, it amounts to a mere extension of the CCS regular concept, whether for the classic fossil fuels, or them combined with biomass, or the carbon capture solely from the biomass burned and its subsequent underground storage.

The concept proposed in this paper is qualitatively different: if we ever hope to develop the CCS for large combustion plants, a continued use of biomass and burning it in a sustainable and economically effective way, would turn biomass from around-zero of its lifetime cycle, into a positive instrument of effective capturing of CO2 from the atmosphere and its natural storage. This biomass carbon capture and storage (BCCS) might effectively contribute to lowering levels of GHGs in atmosphere, provided at any point in future this action would be considered necessary in order to stop growing of global temperature [note 2]. An option of biomass CCS deployment solely for GHGs reduction was already discussed in the International Energy Agency’s report [note 3].

This particular feature of biomass combined with CCS ability to actively limit the amount of CO2 in atmosphere is unique among the technologies of renewable sources of energy. Neither wind generation, nor solar, wave or geothermal energy can offer that. In fact, they can only limit and never eliminate CO2 emissions. As good and positive as it can be regarded, this may not be enough to stop growing of world’s temperature due to the historic accumulation of the CO2 emissions [note 4]. If, at any point in time, the humanity will consider it necessary to actively skim off CO2 from atmosphere, the biomass/CCS technology could do the trick.

How Common European Biomass Policy can be built

Biomass is expected to constitute a backbone of the renewable energy generation by 2020 with more than half of it in the RES composition by that time. Data collected from the national renewable energy action plans developed by the EU member states indicate that biomass use for electricity generation is expected to double from now to 2020 [note 5]. The experiences of Poland, perhaps the most advanced EU biomass market, shows that a coherent, stable and clear public policy strongly contributes to sustainability of the renewable energy sources.

The recent turbulences on Poland’s biomass market are due to significant a drop in green certificate prices. And they provide for both a blessing and a curse. It is a blessing, because – among other factors – it shows a stronger RES generation than expected. It is a curse, because it destabilizes investment expectations

In other words, biomass is a natural technology of carbon capture and storage, for long thought for a clean use of coal, lignite and natural gas

and conditions for both utilities and banks to respond properly to this public policy objectives. Also, the CO2 savings already achieved come under pressure. The installations built for dedicated biomass and co-combustion are now stressed as non-competitive against simple coal and lignite use. Adversely to the objectives expected, the green certificates turbulences also put the jobs in the sector under question. It has been calculated that 60.000 jobs were created in the biomass sector in Poland since its beginning and now all can disappear. This kind of uncertainty for renewables sector, and more generally for the energy sector as a whole, can be very damaging.

Adoption of an EU-wide public policy on biomass would contribute to development of the biomass internal market of sustainable kind. Some of the national biomass markets are more sustainable than the others. If the EU embarks on development of renewable sources of energy production and generation, of which a half is to be from biomass [note 6], a proper characteristics and sustainability of this market is of utmost importance.

A common EU biomass policy should be grounded on rock solid sustainability criteria for biomass. Initially, it may seem easier to establish both the sustainability criteria and the policy for the solid biomass only. Since the biofuels sustainability criteria exist already, they should be taken into account for the solid biomass sector. As such any future biomass policy could serve as a testing ground for all bioenergy later, thus embracing the bio-energy complex. Moreover, the biomass policy may serve as a litmus test and testing ground for any energy and energy related EU wide policy, including climate change policy. For these reasons of pioneering, the sustainability criteria of the solid biomass should be established and tested for a pre-defined period of time, say 6 years at the beginning, starting from 2015, until 2020. On the basis of its experience, later the periods of CEBP should be streamlined with both the Kyoto protocol, and the European emission trading scheme periods (ETS), as well as with the EU’s future multi-annual financial frameworks.

In short, the common European biomass policy should be composed of three essential elements: legally binding sustainability criteria, a level of support from the EU budget, and a way of support in form of biomass market management mechanism (based on green certificates, or feed-in tariffs, either premiums, or else).

Biomass sustainability criteria

The biomass sustainability criteria are much too a complex issue to be discussed in detail in an article on a general scheme of the biomass policy, and it deserves a separate policy suggestion [note 7]. Still, the sustainability criteria should be centred on limiting the carbon footprint of biomass management, harvesting and preparation, and should strive to raise capability of the processed biomass to store carbon. They should include provisions favouring local harvesting, preparation and use of biomass, in order to limit their carbon footprint to a absolutely necessary minimum.

Biomass is expected to constitute a backbone of the renewable energy generation by 2020

They also should direct the biomass market development towards use of woodlands’ wastes and agricultural waste. Furthermore they should set the levels of carbon emissions’ savings to be attained by operators. On one hand, they may set the ways of cooperation between producers, particularly farmers, and – on the other – between the biomass producers and its consumers. The latter element of sustainability has been proven important by the local Polish biomass market. In fact, the producers, specifically farmers, are most often small entrepreneurs, while biomass customers are mainly large combustion power generation utilities. They are incompatible, and their proper cooperation does require a level of participation from the regulators or proper coordination schemes set up by local and/or regional administrations, depending of the national structures.

Most generally speaking, the sustainability criteria for biomass should strive to avoid unnecessary use of good wood, and deforestation, also indirect land use change in other countries. It should also define rules thus avoiding a competition for land with foodstuff production, also including indirect effects on farmers in third countries. A concentration of biomass sustainability on solid waste from woodlands and agriculture should allow for a proper use of European public money.

Financing and management of the common European biomass policy

For a good reason, there is a very narrow area when EU money is used for financing the European market development. Yet, there was, and still there is the EU’s common agricultural policy which had been designed in the past as a part of free movement of goods policy of the early communities.

We can assume that in 2020 about 220TWh of electricity will be produced from biomass, following recent analysis [note 8]. The Polish experience with biomass electricity support based on green certificates scheme indicated that a level of support of 50 EUR per MWh produced seemed satisfactory from the point of view of policy development as measured by the amount of green electricity delivered. The level of biomass support of 50 EUR per 1 MWh of electricity produces has been taken for this analysis from the moment of the market working in a fairly balanced way.

We can assume that in 2020 about 220TWh of electricity will be produced from biomass, following recent analysis

In 2013, due to disturbances in green certificates market in Poland that already begun in 2012 their price went down to less than 30 EUR per 1 MWh, at the time when the CO2 emissions were priced at 5 EUR per 1 ton. Hence, the level of 50 EUR/MWh, although seemingly high, may serve here to indicate a maximum total support foreseen. This is to test whether the total support could in any way be imaginable to finance. It indicates that a total amount of circa 11 bn. EUR in 2020 would be needed for a sustainable common EU biomass policy. Such amount of money would need to be compared, and would represent, for example, about 6,5% of the EU yearly budget for 2020, as recently agreed by the European Council [note 9]. Thus calculated level of support could also be understood as equal to around 25% of the EU common agricultural policy appropriated for agricultural markets related expenditure also for year 2020. By no means it is a small amount of money, yet it does not seem unimaginable to consider the common European biomass policy financing.

As seen from the EU Member States financing perspective, the EU budgetary support for its biomass policy could be entirely neutral. The EU budget should in fact replace national schemes of financing for the biomass national policies as practiced by the individual member states. Moving those sources to and via EU budget would eliminate a risk of making additional EU expenditure, on top of the agreed multiannual financial perspectives until 2020. Only if successful and the EU biomass policy effective, thus constructed side-line EU budget should be ultimately merged into the general EU budget, perhaps as of 2021 onwards.

In principle, the EU financing mechanism for the common biomass policy could be understood as primarily designed for the EU carbon reducing efforts. As such, it falls within the EU climate action, although its main specificities (woodlands and agriculture) naturally belong to the agricultural policy sphere. From the point of view of the markets only, the financing instrument could be seen as driving biomass only to the point of grid parity with the other fossil fuels. Still, from the point of view of the climate action, the processed biomass / CCS scheme should be understood much more broadly, as the European action objective per se.

From the EU Member States point of view this would mean a general change of source of support from their national budgets to the EU budget. From the EU point of view, this would mean streamlining of the method of support and thus creation of de facto biomass internal market for electricity production.

One important reason for setting the case of a common policy on biomass from the EU level is the current variety of schemes supporting the biomass production and green electricity generation. There are cases where green certificates for biomass co-firing are used (like Poland, and Belgium), there are feed-in tariffs or premiums in Austria and Czech Republic, and there is fixed premium in the Netherlands.

The common biomass policy would streamline those systems of support into one,

In principle, the EU financing mechanism for the common biomass policy could be understood as primarily designed for the EU carbon reducing efforts

set and run by the European Union. It might be useful also to consider the common biomass policy as a part of the current EU agricultural policy. After all, biomass is an all-natural product and its sustainability fits perfectly well the contemporary thinking about both the agricultural policy and climate change policy. Alternatively, the policy could also be run from within the European Commission via one of the Directorates General: on climate change, or environment, or indeed energy.

In principle, we could imagine two distinctively different ways of introducing the common biomass policy. First, a more limited and less ambitious one, would use a classic way of a directive to set the biomass wastes and its processing standards. Naturally, it would imply its implementation and perhaps /financing to the EU Member states.

A more ambitious way of the common biomass policy would set both the standards and let the European Commission (DG Climate Action, or DG Agriculture, or DG Energy) to run the policy financed entirely from the EU common budget. The DG AGRI, having acquired a vast experience in overseeing various agricultural markets and in taking care for the market play based on price, seems to be natural choice for its management.

Naturally, there is a number of issues to be discussed and develop, if the idea takes off the ground.

Part 1 of this article can be found here.

Notes

European Commission, Communication on the Future of Carbon Capture and Storage in Europe, COM(2013) 180 final, Brussels 27.03.2013, p. 11-12.
A. Laude, O. Ricci, G. Bureau, J. Royer-Adnot, A. Fabbri, CO2 capture and storage from a bioethanol plant: Carbon and energy footprint and economic assessment, “International Journal of Greenhouse Gas Control” 5 (2011), p. 1220–1231.
International Energy Agency, Achieving Climate Stabilization in an Insecure World: Does Renewable Energy Hold the Key?, 12 July 2010, Final Report, http://iea-retd.org/wp-content/uploads/2011/09/SC4_IEA-RETD_Climate_Stabilization_and_Renewable_Energy_July2010.pdf (accessed: 11.04.2013).
International Energy Agency, CO2 Emissions from Fuel Combustion. Highlights, 2012 Edition, Paris, Second edition March 2013, http://www.iea.org/publications/freepublications/publication/CO2emissionfromfuel
combustionHIGHLIGHTS.pdf, p. 17-19 (accessed: 5.05.2013).
ECOFYS, Fraunhofer, Becker Büttner Held, Energy Economics Group, Winrock International (consortium), Renewable energy progress and biofuels sustainability, Report for the European Commission, September 2012, http://ec.europa.eu/energy/renewables/reports/doc/2013_renewable_energy_progress.pdf (accessed: 22.04.2013).
See, for example, European Climate Foundation, Södra, Sveaskog, Vattenfall, Biomass for heat and power. Opportunity and economics, 2010, http://www.europeanclimate.org/documents/Biomass_report_-_Final.pdf (accessed: 6.05.2013).
See: European Commission, Report on sustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling, COM(2010)11 final, Brussels, 25.2.2010.
Ayla Uslu, Joost van Stralen, Luuk Beurskens, Francesco Dalla Longa, Use of sustainable biomass to produce electricity, heat and transport fuels in EU27. A model-based analysis of biomass use for 2020 and 2030, Biomass Futures, ECN-E--12-021, March 2012, http://www.biomassfutures.eu/public_docs/final_deliverables/WP5/
D5.3 Results summary for WP7.pdf (accessed 12.04.2013), p. 19-20. See also: Achim Raschka, Michael Carus, Industrial material use of biomass. Basic data for Germany, Europe and the world, nova – Institute for ecology and innovation, Hürth, February 2012, p. 15 (report commissioned by the Federal Environment Agency).
This amount of 220TWh of electricity made in the EU of biomass in 2020 is somewhat lower than expected by the European Commission – 232 TWh or 19 mtoe, see: European Commission, Renewable energy progress report, COM(2013)175 final, Brussels 27.03.2013, p. 5.
European Council, Conclusions (Multiannual Financial Framework), EUCO 37/13, Brussels, 7/8.02.2013, p. 47.