Eberswalde 8-9 December 2009 Bernard de Galembert Forest and Research Director

Transcription

1 Document Date Eberswalde 8-9 December 2009 Bernard de Galembert Forest and Research Director

2 The challenge: 20/20/20 by

3 Forest owner Environment - Climate change Opportunit y? - Agriculture and rural development - Forest owners interests - Environmental protection - Sustainability - Landfill Dir. on biodegradable waste Impacts? Wood for energy Threat? Forest based industries - Competition - Employment - Raw material supply - Costs Energy - Energy security - Resources - Prices - Capacities - Investments - Technology Role? 2

4 3 The Commission s and the national governments ambitions on energy efficiency and renewables (RES) are high % 2007 share Final energy consumption EU-25, 2020, TWh 100% = 15,000 TWh 120% 20% 100% 80% Transportation 3, Heating and cooling 1,105 20% Electricity 1,452 BAU % EU efficiency target Target 2020 Renewables Non-renewables 8% 2020 RES targets in Green-X leastcost scenario Source: Renewable energy road map, Green-X

5 4 Solid biomass will need to play a critical role to meet the RES targets TWh energy output, EU-25 Electricity Heating and cooling 8 1, Other Geothermal Biowaste Tide & wave Biogas Hydro 5 1, Biogas Geothermal Biowaste Solar thermal Heat pumps Wind Solid biomass* (grid) 308 Solid biomass* 533 Solid biomass* (non-grid) 2004 Actual 2020 Green-X least-cost * Both forest and other solid biomass Source: Green-X economic analysis of reaching a 20% share of RES in Actual 2020 Green-X least cost

6 5 The EU targets translated in wood terms Estimated energy consumption based on solid biomass CEPI-16, TWh 896 Estimated demand for forest biomass and recovered wood CEPI-16; Million m 3 * 280 ESTIMATES Grid 363 Grid Dedicated Nongrid Nongrid Dedicated 137 Co-firing 66 5 Co-firing 45 Electricity Heat Transportation Electricity Heat * Based on total primary energy input from Green-X report on least cost scenario: 1 million m 3 equals 0.17 Mtoe (2 MWh/m 3 ) Source: Green-X; team analysis

7 6 Why biomass? And why soon? 2005 full generation cost in EUR/MWh* Generation CO CCGT costs increase from EUR 55/MWh to EUR 87/MWh as oil price increases from USD 40 to 80/bbl USD 80/bbl USD 40/bbl 22 CO 2 (7) Wind on-shore Wind off-shore Rooftop PV Centralized PV Solar CSP Biomass Small hydro Geothermal Wave Tidal CCGT Note: PV=Photovoltaic cells; CCGT=Combined Cycle Gas Turbine; CSP=Concentrating Solar Power * Includes capital costs, O&M, fuel, and CO2 cost at 20 EUR/ton; best available technology at average location Source: Public data and client workshops; McKinsey analysis based on interviews

8 7 Wood use and supply in 2005 Wood supply and multiple uses of assortments Components of wood raw material supply Industrial roundwood Fuelwood Bark Used logging residues Woody biomass outside the forest Chips, particles & wood residues Pulp production co-products Recovered wood Pellets Sawmill Pulp Panel Other material use Heat and energy generation Processed wood fuels 4 Components of wood consumption

9 8 With current assumptions we see a gap between supply and demand of more than 200 million m 3 wood by 2020 CEPI-16, wood supply and demand; million m 3 (under bark); 2020 Supply Demand ~380 Current forest biomass supply Mobilization Net imports Recovered wood Estimated supply Estimated gap Estimated demand Non-traditional demand (energy) Traditional demand PPI WPI Source: McKinsey/Pöyry team analysis

10 1. Different databases Different databases 9 Energy - IEA EurObserver Wood Energy COST - E31 MCPFE Forestry FAO Timber / UNECE CEPI EPF Gesbois Wood use and supply in 2005 Data sources Regional wood balance Minimum / Maximum / Best estimate per item

11 10 Wood use and supply in 2005 Results sources uses [mio. m³] % % [mio. m³] Industrial Roundwood - JFSQ % 26% 214 Sawmill industry Industrial Roundwood - other 26 3% 11% 89 Panel industry Fuelwood - JFSQ 56 7% 19% 155 Pulp industry Fuelwood - Maximum other 29 4% 2% 14 Other physical utilization Bark 12 2% 1% 6 wood fuel industry Used logging residues 17 2% 6% 49 Power and heat Woody biomass outside forest 13 2% 7% 61 Industrial internal Chips, particles & residues % 12% 96 Private households Pulp production co-products 72 9% 17% 138 Undifferentiated energy use Recovered wood 42 5% Processed wood fuel 6 1% supply total: use

12 11 Three main scenarios as result of efforts to reach 20% RES No mismatch between demand and supply of wood biomass Increased biomass supply Other RES technologies Some cost increase (regional mismatches/transportation) Limited impact on PPI Increasing supply of energy crops billion EUR/year Today: ~8% RES Current policies and technology expectations Mismatch between demand and supply of wood biomass Current subsidy levels and structure Significant increase in cost of biomass (incl. pulpwood and logs) Some risk to paper industry competitiveness Significant risk of bio-energy not being fully produced (8% of RES target) Source: McKinsey/Pöyry team analysis Enforcing RES target without closing demand-supply gap Large increases in wood cost (energy-content pricing) Significant part of EU PPI (and wood products) globally uncompetitive Rough cost of additional bio-energy incentives: 8-11 x

13 12 The pulp and paper industry is part of the solution The PPI is already a substantial participant in bio-energy production SR FI BE SE PT CZ AT Share of country primary bio-energy production Percent; Mtoe 3.3 ES PL FR DE UK NL IT and can be a key enabler for reaching future RES targets The paper industry has: The infrastructure The locations The efficiency Source: CEPI bio-energy survey; SBB; McKinsey/Pöyry team analysis

14 13 The key enabler Source: CEPI bio-energy survey; SBB; McKinsey/Pöyry team analysis

15 14 Adequate conditions are needed Ensure realization of assumptions in current RES roadmap 20% by 2020 Invest in the future (post-2020) Close the additional 2020 gap

16 15 Ensure realization of assumptions in current RES roadmap Accelerate policies to increase energy efficiency in consumption (20% target needs to be met) Accelerate policies to increase energy efficiency in generation, e.g., through stronger incentive systems for high-efficiency generation (e.g., PPI) and ensuring predicted increase in CHP Accelerate the development of other renewable energy sources (e.g., wind) to take at least the share of generation foreseen in the Commissions RES roadmap Ensure implementation of planned land use for biomass Support the development of 2 nd generation biofuels Harmonize policies that classify black liquor as biomass

17 16 Further biomass actions to avoid the additional 2020 gap Maximize sourcing of wood/rp in EU Mobilise, mobilise, mobilise Develop forest management practices that better use European forests potential (sustainably) Ensure better recovery of wood, e.g., through banning land fill of recovered wood Ensure sufficient land for energy crops and optimize the efficiency of that Ensure actions (as recommended by the EEA), to free up land for efficient energy crop production Do not encourage the use of land for 1 st generation biofuels No import barriers for sustainably produced biofuels No support systems for growing 1 st generation feedstock Ensure attractiveness to grow energy crops, e.g., through development of supporting financial instruments and premiering high-yield crops Actively work on increasing and facilitating overseas supplies of raw material and biomass Support planting of forests outside the EU Simplify process for CDM permits in forestry Work to remove or reduce existing export tariffs on wood Adopt a principle of resource efficiency (in line with the Waste Hierarchy)

18 17 Sustainable wood mobilisation: several levels of action Several levels where action should be taken: forest management level policy level land-use level resource use level logistics level manpower level research and technological development level

19 18 Wood mobilisation: concrete measures At the forest management level Intensify Forest Management, whilst respecting the principles of Sustainable Forest Management. Develop Service Centres, advising forest owners in their management Allow private companies to substitute communities or municipalities in the forest management. Enable landowners to have annual income from forest, e.g. through Foundations. Register and compel/encourage all forest owners to manage their forests (including through the revision of the tax system). Incentivise pre-commercial thinnings. Support the creation of local forest management associations/cooperatives. Facilitate land swapping. Increase the mechanisation for harvesting of logs and residues. Open and make easier the access to land registers/cadasters. Improve the efficiency and the scale of collection of residues. Set up forest machinery co-operatives.

20 THE PROBLEM 19

21 20 Land swapping BEFORE AFTER Owner Nr. 68

22 21 Wood mobilisation: concrete measures At the level of policy instruments Eliminate administrative and legal obstacles to efficient forest management Simplify requirements to obtain permissions for transport and transformation of wood Bring coherence in policies (e.g. need to protect forests for biodiversity vs. need to collect more wood out of the forests need to sequester carbon in forests vs. need for biomass) Implement mechanisms to actively prevent and fight against forest fires Establish legal, policy and market security and long-term stability that would attract more investments in the forest sector Balance biodiversity protection policy requirements in a way that is adequate and proportionate to the conservation needs.

23 22 Wood mobilisation: concrete measures At the level of land-use Support sustainably managed forest plantations Develop short rotation forestry and coppices of species with high energy content Expand forest area on idle land

24 23 Wood mobilisation: concrete measures At the level of resource use Promote the principle of resource efficiency that gives preference to the most value-adding and job-creating uses of raw materials. Give incentives to companies that collect and separate recovered wood Reassess contamination limits of recovered wood, since too tight limits might exclude significant amount of wood of the feedstocks market.

25 24 Wood mobilisation: concrete measures At the level of logistics and manpower Increase road transport weight limits: bringing more material to the mills reducing road congestion reducing environmental impacts Improve road and railway networks and services Increase the image and the attractiveness of forest-related jobs, e.g. forest entrepreneurs, foresters, but also mill workers.

26 25 Wood mobilisation: concrete measures At the level of RDT and science Develop knowledge on biotechnologies Define areas to be used for large scale experiments Communicate efficiently on results in forest genetics and sylviculture Support innovations leading to significant higher biomass yield per hectare Establish a list of tree species and their fit-forpurpose for the end-use. Carry out further research to improve harvesting and residues collection in hardwood stands.

27 26 Benchmarking actions on biomass mobilisation Most Efficient Efficiency Least Efficient Very Difficult to Implement Ease of Implementation Very Easy to Implement

28 27 Benchmarking actions on biomass mobilisation 1 Intensify Forest Management, through the adequate use of improved species 2 Develop Service Centres aiming at advising forest owners in their management 3 Allow private companies to substitute local communities and municipalities in the forest management 4 Creatively enable owners of small forests to have annual income from Forest 5 Systematically register and compel/encourage forest owners to manage their forests 6 Incentivise pre-commercial thinnings 7 Support the creation of local forest management associations/co-operatives 8 Facilitate land swapping to address fragmentation 9 Increase the mechanisation for harvesting of logs and residues 10 Open and make easier the access to land registers/cadasters 11 improve the efficiency and the scale of collection of residues, notably by establishing logistical platforms 12 Set up forest machinery co-operatives 13 Eliminate administrative and legal obstacles to efficient forest management 14 Simplify requirements to obtain permissions for transport and transformation of wood 15 Bring coherence in policies 16 Implement mechanisms to actively prevent and fight against forest fires

29 28 Benchmarking actions on biomass mobilisation 17 Establish legal, policy and market security and long-term stability that would attract more investments in the forest sector 18 Balance biodiversity protection policy requirements, limiting management restrictions in a way that is proportionate to the conservation needs 19 Support sustainably managed forest plantations 20 Develop short rotation forestry and coppices of highly productive species with high energy content 21 Expand forest area on idle land 22 Promote the principle of resource efficiency that gives preference to the most value-adding and jobcreating uses of raw materials 23 Give incentives to companies who collect and separate recovered wood 24 Reassess contamination limits of recovered wood, since too tight limits might exclude significant amount of wood of the feedstocks market 25 Increase road transport weight limits, which would contribute to bringing more material to the mills, whilst reducing road congestion and the environmental impacts 26 Improve road and railway networks and services, since poor transports act as a bottleneck to efficient mobilisation 27 Increase the image and the attractiveness of forest-related jobs, e.g. forest entrepreneurs, foresters, but also mill workers. The absence of manpower in rural areas is a major obstacle to mobilisation 28 Develop knowledge on genetically improved species 29 Define areas to be used for large scale experiments 30 Communicate efficiently on results in forest genetics and sylviculture 31 Support innovations leading to significant higher biomass yield per hectare 32 Establish a list of tree species and their fit-for-purpose for the end-use 33 Carry out further research to improve harvesting and residues collection in hardwood stands

30 29 Invest in the future (post-2020) 2 nd generation biofuels kicks in as user of wood 60-80% reduction of CO 2 required by 2050 Accelerate policies to encourage afforestation within EU Develop sustainable long-term growth of European forest resources Focus R&D efforts on the efficient use of raw materials and energy sources. Support the development of new technologies in biomass-based power generation. Support the development of other renewable-energy technologies

31 30 The future paper industry: the «pig farm» model The pulp and paper industry will not only use the «filet», but must use the rest of the tree. The pulp and paper industry must also use the «filet» differently.

32 Biorefinery: : focus on efficiencies 31

33 The «tree farm» model 32

34 33 Key statements Meeting the renewable targets is an issue of Land use... and potential conflicts Agricultural policies... as an indispensible source of feedstocks Forest policy... that stimulates forest actors Energy policy... that places efficiency at the center Integration... to avoid working in silos

35 Thank you! Document Date Avenue Louise, Box 80 B-1050 Brussels Tel: Fax: mail@cepi.org