PROJECTS ASSESSMENT REPORT

Transcription

1 #102 Bioenergy Promotion 2 - from strategies to activities WP4 Feeding Main stage and Extension stage project results into higher level strategy and programme development Task 4.1 Feeding Main stage and Extension stage project results into key EU funding programmes PROJECTS ASSESSMENT REPORT Lithuanian Energy Institute 2012 December 1

2 Content 1. Purpose and background of the document Projects overview Sustainability requirements for projects Synthesis Ranking of requirements to be included into period Conclusions References ANNEX

3 1. Purpose and background of the document The following report has been prepared in the framework of the project Bioenergy Promotion 2. BP-2 is co-financed by the European Union under the Baltic Sea Region Programme and the Norwegian government and forms a 2 years extension of the Main stage project Bioenergy Promotion ( ). The purpose of the report is to promote the sustainable, integrated and resource efficient use of bioenergy. Bioenergy production and use is among the funding priorities of several key EU funding programmes including the national and regional Operational Programmes under the Cohesion Fund and the European Regional Development Fund, and the rural development programmes under the European Agricultural Fund for Rural Development. However, in many of these national and regional programmes, sustainability principles and criteria for bioenergy have been included only to a very limited extent, if not marginally so far. This is in contrast to international, EU and national policy 1 [1 2] and business initiatives 2 targeting the sustainable production and use of biomass for energy production and ongoing debate at EU and Member state level about the sustainability risks and opportunities of increased bioenergy use. 1 In June 2008, the Global Bioenergy Partnership (GBEP) established the GBEP Task Force on Sustainability to promote sustainable production and use of bioenergy. The Task Force, under the leadership of the United Kingdom until October 2010 and of Sweden after that, has developed a relevant, practical, science-based set of measurements and indicators that can inform policy-makers and other stakeholders in countries seeking to develop their bioenergy sector to help meet national goals of sustainable development. The uniqueness of this GBEP work lies in the fact that it is currently the only initiative seeking to build consensus among a broad range of national governments and international institutions on the sustainability of bioenergy and in the fact that the emphasis is on providing measurements useful for informing national-level policy analysis and development. GBEP addresses all forms of bioenergy. The Renewable Energy Directive 2009/28/EC contains binding criteria for biofuels and bioloquids covering land use related criteria and minimum lifecycle GHG emission savings. For solid and gaseous biomass used for energy, the EU Commission has issued a report on sustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling (COM(2010)11 with recommendations to those Member States that wish to introduce a national scheme. The Commission considers to introduce a binding scheme also in this field. ISO and CEN standards on sustainable biomass are presently under development. 2 Cf. the Initiative Wood Pellet Buyers. 3

4 Negotiations are under way to reform the EU funding programmes for the post 2013 period. This process offers excellent opportunities to strengthen key results of the Main stage and also the Extension stage project by feeding them into the programming process at national and regional level. The purpose is to optimise strategic frameworks and funding programmes in terms of a greater thematic focus on sustainable bioenergy investments, taking into account sustainability principles and criteria while ensuring an integrated approach to sustainable regional development. The report has been prepared under the leadership of Lithuanian Energy Institute. The following partners contributed to its preparation: Lithuanian Energy Institute (Lithuania); Freie Universität Berlin, Environmental Policy Research Centre (FFU) (Germany); Chamber of Agriculture Lower Saxony (Germany); BCEE Institute of Fluid-Flow Machinery - Baltic Eco-Energy Cluster (Poland) and Roskilde University (Denmark). The report addresses the following target groups: EU and National responsible bodies (ministries, agencies) developing requirements for projects, which will be funded under EU European Regional Development Fund (ERDF) - Cohesion Fund and European Agricultural Fund for Rural Development (EAFRD). The most frequently quoted definition of sustainable development as development that "meets the needs of the present without compromising the ability of future generations to meet their own needs" is from Report of the World Commission on Environment and Development: Our Common Future, also known as the Brundtland Report [3] In the Lithuanian National Strategy of Sustainable Development [4], the concept of Sustainable Development is described as a compromise between environmental, economic and social objectives of the society, which provides the chances of reaching a global welfare of present and future generations within the environmental limits. Bioenergy production and consumption are very sensitive from a Sustainable Development point of view, therefore, during the main stage project (MSP) Bioenergy Promotion ( ) basic principles and criteria for sustainable bioenergy production that encompass environmental, social and economic issues were jointly formulated by the project partners. 4

5 In this report, an attempt was made to assess to what extent Sustainable Development requirements are applied in different countries (Poland, Germany and Lithuania) for bioenergy projects, partially financed by different EU funds. Six projects were evaluated, of which three, partially supported by the Cohesion Fund, two by the European Agricultural Fund for Rural Development (EAFRD) and one project proposal under Intelligent Energy for Europe programme, which was not used for deeper analysis. It should be notified that the Rotenburg case (project 3 Maintenance measures in young stands ) deals with biomass production/harvesting, whereas the others deal with biomass conversion (bioenergy plants). The Rotenburg case is more a proposal how to optimize the existing funding programme than a real project. The assessment includes expert evaluation (ranking) results, addressing the question which Sustainable Development principles and criteria, developed during the MSP, are of particular importance for the bioenergy sector. The principles and criteria most important for sustainable bioenergy production were developed during the MSP. They encompass environmental, efficiency, social and economic aspects of Sustainable Development. Project partners were asked to evaluate bioenergy projects, partially funded by EU funds and to indicate what Sustainable Development principles and criteria are extremely important for the production and use of bioenergy. The results of this expert evaluation are presented in chapter 4. The report was elaborated by project team of Lithuanian Energy Institute, with support and contribution of Freie Universität Berlin, Environmental Policy Research Centre (FFU) (Germany); Chamber of Agriculture Lower Saxony (Germany); BCEE Institute of Fluid-Flow Machinery - Baltic Eco-Energy Cluster (Poland) and Roskilde University (Denmark). 5

6 2. Project overview Partners from four countries have delivered projects for assessment Lithuania (partner Lithuanian Energy Institute, Kaunas Region), Germany (Chamber of Agriculture, Lower Saxony, Environmental Policy Research Centre of the Freie Universität Berlin), Poland (BCEE Institute of Fluid-Flow Machinery - Baltic Eco-Energy Cluster) and Denmark (Roskilde University). Lithuania: Project 1 profile. Country, region: Project partner: EU Funding programme: Operational programme: Priority of operational programme: Measure of priority: National document, defining projects financing conditions: Project title: Lithuania, Kaunas Region LEI Cohesion Fund VP3 Operational Programme for Promotion of Cohesion for VP3-3 Environment and Sustainable Development VP3-3.4 Use of renewable energy resources for energy production VP3-3.4-UM-02-K projects financing conditions for use of renewable energy resources for energy production order Nr [5] N/A Brief description of the project: Project involves construction of biogas (landfill gas) collection system in landfill pile with efficient CHP plant and compressor station, allowing efficient heat and power generation, including reduction of greenhouse gases volumes. Heat will be transferred to district heating supplier and electricity will be supplied to national electricity supply operator LESTO. Burning of landfill gas will reduce methane emissions, reduce the share of fossil fuel in fuel balance of DH company thus reducing fuel import. 6

7 Implementation of the project will also reduce bad odour in the surrounding of the landfill due to burning of Sulphur Hydrogen together with other landfill gases. Project 2 profile. Country, region: Project partner: EU Funding programme: Operational programme: Priority of operational programme: Measure of priority: National document, defining projects financing conditions: Project title: Lithuania, Kaunas Region LEI Cohesion Fund VP3 Operational Programme for Promotion of Cohesion for VP3-3 Environment and Sustainable Development VP3-3.4 Use of renewable energy resources for energy production VP3-3.4-UM-02-K projects financing conditions for use of renewable energy resources for energy production order Nr [5] N/A Brief description of the project: Project involves construction of biogas infrastructure, including CHP units, boiler-house and biogas production unit, for heat and energy generation using biogas from an industrial process. A big amount of biomass waste is produced during the company production process, besides technological process requires significant volumes of electricity and heat. The project solves energy supply and reduction of energy costs problems for the company. Besides, a large share of electricity generated in new infrastructure will be supplied to power distribution grid. The project reduces the use of fossil fuel (natural gas) thus reducing CO 2 emissions. 7

8 Germany: Project 3 profile. Country, region: Project partner: EU Funding programme: Operational programme: Priority of operational programme: Measure of priority: National document, defining projects financing conditions: Project title: Germany, Rotenburg (W.) County PP03 Chamber of Agriculture Lower Saxony European Agricultural Fund for Rural development (EAFRD) Rural Development Programme of Lower Saxony and Bremen (official title: PROFIL) Non-productive investments (Code 227) Pre-commercial thinnings [6], [7], [8] (the 2 latters shortend URLs to be fitted into this form) Maintenance measures in young stands Brief description of the project: In young stands, gradually growing up, a 1 st thinning usually is carried out in order to improve future quality development (low number of branches in the lower part of the trunk, promoting straight and healthy trees, promoting certain species etc). In broadleaf stands, this measure usually is carried out quite late, appr. at an age of years in order to shadow the lower storey of the stand and let the lower branches die back, which will improve quality. Since the 1 st thinning trees traditionally is too small dimensioned to be used commercially, it remains on the ground and is broken down by fungi and microorganisms. However, specifically in broadleaves stands with, due to the age, higher diameters, bioenergy now is an option to make use of this biomass. The PROFIL directive in Lower Saxony, however, excludes financial support of the operation in those cases, where obtained material is used for any purpose. The support is offered on a fixed amount level, usually covering 50% of the expenses. The use of the biomass for energy purposes, however, would slightly increase the costs due to directed felling, additional crosscutting and extraction of the material, so that the remaining costs after deduction of the price for the bioenergy would be higher than the forest owner s financial contribution, 8

9 when applying for financial support. Optimising the financial effect thus leads to a non-optimal behaviour, if energy goals are taken into account. Corresponding directives in other German states provide support of 50% for the non-covered costs, when biomass is extracted, which both reduces the need for financial support and supports EU energy goals in a non-competitive way ( material use of woody biomass). Project 4 profile. Country, region: Project partner: EU Funding programme: Operational programme: Priority of operational programme: Measure of priority: National document, defining projects financing conditions: Germany, Schleswig-Holstein FFU EARDF Rural Development Programme of Schleswig-Holstein (official title: "Zukunftsprogramm Ländlicher Raum" ZPLR) Axis 3: Quality of life in rural areas and diversification of the rural economy Initiative Biomass and Energy (Initiative Biomasse und Energie) Measure/Code 321/1 Initiative Biomasse und Energie Richtlinie zur Förderung der energetischen Nutzung von Biomasse im ländlichen Raum durch das Land Schleswig-Holstein [9] (Initiative Biomass and Energy, Funding Guidelines to promote the energetic use of biomass in rural areas by the Land Schleswig-Holstein) Decree (Erlass) of the Ministry for Science, Economy and Transport of Schleswig-Holstein (MWV) of May 8, 2007 VII The consolidated version includes Funding guidelines (Förderrichtlinie) of May 8, 2007, published in the Amtsblatt für Schleswig-Holstein on May 21, 2007, Nr. 21, page 408; Amendments to the Funding Guidelines (Änderung der Förderrichtlinie) of December 7, 2009, published in the Amtsblatt für Schleswig-Holstein on December 21, 2009, Nr. 51, page 1397; Prolongation of the Funding guidelines (Verlängerung der Förderrichtlinie) of September 15, 2011, published in the Amtsblatt 9

10 Project title: für Schleswig-Holstein on October 10, 2011, Nr. 41, Page 698. In addition to the funding guidelines, a special technical bulletin [10] has been issued defining relevant eligibility and performance criteria. Integrated use of biogas and woody biomass in Hennstedt (Schleswig- Holstein) Brief description of the project The assessed project covers the integrated use of biogas and woody biomass in Hennstedt (Schleswig- Holstein). Before we describe this project in more detail, we provide some general information about the regional bioenergy support scheme Initiative und Biomasse under which the project was financially supported. The scheme is part of the current Rural Development Programme of the federal state of Schleswig-Holstein and co-financed by the EU under the European Agricultural Fund for Rural Development EAFRD. Background information the support scheme Initiative Biomasse and Energie In 1996 the federal state government of Schleswig-Holstein launched its own regional support scheme for bioenergy. Special focus of this scheme was the use of biomass residues (e.g. straw, liquid manure, landscape management material like cuttings from hedgerow maintenance) and the promotion of facilities with a particularly high overall efficiency and climate protection efficiency. The scheme gave priority to projects which directly involve agriculture. After 2000, the support scheme Biomasse und Energie has been further developed and anchored in the frame of the Structural Development Programme of Schleswig-Holstein Future in the Countryside (Zukunft auf dem Lande, ZAL). This programme was one of three pillars of structural policy in SH and co-financed by the European Agricultural Guidance and Guarantee Fund (EAGGF). Hence, in 2001 Schleswig-Holstein became the first federal state in Germany to have a biomass support scheme significantly co-financed by the EU as part of its agricultural subsidies. For the first time, funding from the Guarantee Fund for Agriculture has been provided not merely for sectoral agricultural policy objectives, but also for a more comprehensive structure policy targeting rural areas. 10

11 The support scheme was continued in the programming period It is part of the current Schleswig-Holstein s Rural Development Programme (Measure /Code 321/1) and co-financed by the EU under the European Agricultural Fund for Rural Development (EAFRD). Due to regional state budget restrictions, since 2010 only projects which do not need co-financing from the regional state budget are eligible. Hence, in order to become eligible for EU support under the scheme, projects need to seek for the necessary national co-financing from other public funds (e.g. federal government, municipal funds). The corresponding funding guidelines (Förderrichtline) of the scheme were continuously amended (2009, 2011). In 2011, the scheme was prolonged until 31 December Rationale and objectives of the support scheme With its support scheme Initiative Biomasse und Energie the regional state government pursues the following objectives: to increase the share of biomass in the energy supply of Schleswig-Holstein and hence to effectively contribute to climate protection to promote particularly efficient facilities and systems with a high energy efficiency and high CO 2 efficiency (which includes, inter alia, low conversion and distribution losses, and the surplus heat use in cogeneration plants) to support preferentially projects which include agriculture (e.g. secured by biomass supply contracts with farmers, by contracts with farmers covering services for biomass harvesting, treatment, processing or transport as well as plant operation or including farmers as shareholders of bioenergy plants). By help of the support scheme the regional government also seeks to close funding gaps at the federal level. Initially it was envisaged for the entire funding period to support 40 projects with a total investment volume of 80 ml. EUR. In the meantime, this target has been reduced to 30 projects with a total investment volume of 56.4 mln. EUR. 11

12 Funding purpose The scheme provides start-up financing for investments in a) the construction of facilities for electricity and heat production from agricultural biomass including biogas (organic residues, particularly agricultural and forest bioenergy carriers) including peripheral equipment (storage facilities, special machinery, pump logistics for biogas plants, biogas treatment and cleaning)) b) Measures and projects for biomass procurement, treatment and logistics for purposes of electricity, heat and biofuel production General support conditions The scheme provides direct investment grants to private and public entities. The maximum support rate amounts to 40% of eligible investment costs. However, only innovative projects, e.g. being in the stage of a pilot or demonstration project are eligible for the maximum support rate. As a result, the scheme provides individual support rates on a by case base depending on the circumstances and actual support needs of each project, instead of fixed, standardized support rates. In order to exclude double funding, the scheme also considers complementary support, e.g. from national support schemes like the renewable Energy Sources Act). A minimum of 55% of the primary energy input has to come from agriculture. Facilities producing only electricity are excluded from support. Only plants with a maximum thermal capacity of 10 MW are eligible. For biogas plants the storage tanks for the digestate must be leak-proof and covered with gas tight membrane There is a priority for residues from agriculture (straw, hedgerow/wood biomass, liquid manure). 12

13 Furthermore, projects have to comply with certain technical, economical and environmental performance criteria. Technology-specific minimum criteria In general, projects have to comply with the following technical minimum performance criteria For heating plants 70% of the projected heat demand has to be covered by biomass boilers. In order to avoid over sizing of boilers, operators have to prove that when commissioning the plant 50% of the projected heat demand is used and in the fourth year after commissioning 90% (e.g. by a municipal by-law on mandatory connection to a district heating network 3 [11], precontracts etc.). Operators of cogeneration plants have to prove that after three years of operation a minimum of 75% of the annual useful heat amount is used to cover own needs and to supply heat consumers (e.g. by a municipal by-law on mandatory connection to a district heating network [11], precontracts etc.) Biomass based district heating pipes have to fulfil minimum insulation standards. For the district heating network an average minimum heat load density of 1 MWh/a/m 2 must be achieved. Special rules for biogas plants In 2008 the funding guidelines have been amended and additional environmental criteria for biogas facilities using maize as an input material were adopted: A three field crop rotation has to be observed; the share of maize in the total cropping of the corresponding maize grower must not surpass 50%; 3 Several German federal states stipulate in their Local Authority Act (Gemeindeordnung) that municipalities can impose mandatory connection and use of DH networks based on a municipal by-law (Satzung). This legal obligation for translates into the German term Anschluss- und Benutzungszwang. Such explicit options have been envisaged, for instance, in the Local Authority Acts of Schleswig- Holstein, North-Rhine Westphalia or Baden-Württemberg. 13

14 Soil cultivation is allowed only directly before maize sowing and directly after maize harvesting if this is followed by growing of a catch crop or main crop; Conversion of permanent grassland for maize cultivation is not permitted; Realization of integrated biodiversity areas: cultivation areas >15ha have to integrate field flower strips along certain landscape elements (e.g. hedgerows) with minimum of 3 metres; In order to ensure sound fertilization management and uptake of digestate, an annual fertilization plan and a special land area proof have to be submitted; The storage tanks for the digestate must be leak-proof and covered with gas tight membrane. Since 2010, however, biogas facilities are only eligible for support under this scheme if maize is not used as an input material. Project selection shall be based on an individual performance analysis taking into account a number of further technological, economical and environmental performance criteria (e.g. CO 2 support ratio, specific total investment cost, heat/electricity production costs, CO 2 support ratio, heat load density, useful heat support ratio). However, so far the programme did not face an excess situation regarding the number of project applications (Schnaut 2010). Administration of the scheme The scheme is implemented by the Landesamt für Landwirtschaft, Umwelt und ländliche Räume. The Investment Bank Schleswig-Holstein and its Energy Agency serve as an information and advisory desk assisting project developers. Advisory services for general questions of energetic biomass use and provision of assistance in the frame of the support scheme Biomasse und Energie are co-financed under the current Rural Development Programme as an accompanying measure (Code 331-II). 14

15 Project example: Integrated use of biogas and woody biomass in Hennstedt (Schleswig-Holstein) [12] The project can be regarded as a pioneer for ressource efficient and integrated bioenergy use in Scheswig-Holstein. It went through different stages of development since 2000 and combines several technical systems delivering electricity and heat for a greenhouse growing tomatoes and the local community of Hennstedt. The project was initiated in 2000 by several farmers in the region who planned to use the liquid manure from their dairy farms for biogas and electricity production. In the course of project development the farmers preferred to use the surplus heat from electricity production on site in order to improve the economic efficiency of the project. The farmers started discussions with potential surplus heat customers and entered into a successful cooperation with the developer of a greenhouse project which led to the realization of the integrated project concept. The project concept envisaged construction of a biogas cogeneration plant (2x836 kw el, 2x930 kw th ) and a wood biomass CHP plant based on an ORC process. The bioenergy plants and the greenhouse were commissioned in December Electricity produced in both plants is sold to the grid and remunerated with a preferential feed-in tariff (under the Federal Renewable Energy Act). The heat from both plants is mainly used in the greenhouse for growing tomatoes on 60,000 m 3. The greenhouse also uses CO 2 from the gas motors. Total electricity production was expected to reach 17,000 MWh and heat production 47,000 MWh. The total investment cost amounted to 14.3 mln. EUR. The innovative project received financial support with a total amount of 4.0 mln. EUR from the regional support scheme Initiative Biomasse und Energie in Schleswig-Holstein (which combines federal state funds and EU funds from the EAFRD) and from the national research programme Nachwachsende Rohstoffe. 15

16 Owner and operator of the plants is Biokraft Hennstedt GmbH & Co. KG, a limited partnership.the raw material is mainly supplied by farmers in the region, who are also limited partners in the Biokraft Hennstedt GmbH & Co. KG. In total, 90 farmers and citizens from the region became shareholders. It was planned to use the following input material for biogas production: 100,000 tons of liquid cattle and pig manure, 16,000 tons of renewable raw material (maize and grass silage) and other organic residues. 15,000 tons of wood from regional hedgerow cuttings were planned to be used in the ORC based CHP plant 4. Project extension : In 2010 the company CEE (Conetwork Erneuerbare Energien Holding GmbH & Co. KGaA) became majority owner of BioKraft Hennstedt Dithmarschen GmbH & Co. KG. Technical optimization of the fermentation process allowed to increase the biogas output. It is planned to construct two additional satellite cogeneration units which supply heat to public and private buildings in the local community of Hennstedt. In 2011 the utility company Fernwärmeversorgung Niederrhein won a public tender to supply heat for public buildings and construct a local district heating network. Construction works started in 2011 and the connection of customers shall be finalized by In the case of Hennstedt, simultaneous bioenergy project development and settlement of the greenhouse delivered synergetic effects. Besides the positive environmental effects, employment creation in the 4 Hedgerows (German: Wallhecke, Knick) are typical and traditional landscape elements of agricultural ecosystems in North Germany. Historically, these living fences served as a means of demarcation and soil protection, but also as an energy resource. Due to the industrialisation of agriculture and land consolidation during the 20 th century the hedgerow density has been severely reduced. In the 1970s, protection of hedgerow landscapes began. Today, the total length in SH amounts to 46,000 kilometres. The hedgerows serve multiple functions (e.g. soil protection, biodiversity). Nature conservation regulations require controlled coppicing after years. Being rather labour-intensive, maintenance and coppicing of hedgerows was not very attractive to the local farmers in the past. Until recently, the cuttings were often burned directly in the field. Nowadays, hedgerows play a promising role as a regional biomass resource in forest poor Schleswig-Holstein. There is an increased use of hedgerow based wood chips for modern biomass heating plants and CHP plants. Compared to other biomass resources in North Germany, like straw or dedicated energy crops, hedgerow biomass appears to be a promising biomass source both in economical and ecological terms. In recent years, so called local machinery rings (Maschinenring) - non for profit co-operative societies of farmers and agricultural businesses providing machinery and equipment for common use in order to reduce machinery and labour costs as well as farm contractors play a key role as fuel producers and suppliers. 16

17 greenhouse and through the bioenergy plants (6-8 persons) resulted in a high level of social acceptance for the project in the region. More than 60 persons found jobs in greenhouse thanks to the realization of the bioenergy project [13]. Prices for district heating are not coupled to the oil price, but to the living expenses and level of wages of the local population. Energy efficient use of biomass in cogeneration processes and utilization of surplus heat has been a priority in Schleswig-Holstein already since

18 Poland Project 5 profile. Country, region: Project partner: EU Funding programme: Operational programme: Priority of operational programme: Measure of priority: National document, defining projects financing conditions: Project title: (examples) Poland BCEE Institute of Fluid-Flow Machinery - Baltic Eco-Energy Cluster Cohesion Fund (CF) Infrastructure and Environment (OPI&E) - POIŚ (in Polish) PA-9: Environment-friendly energy infrastructure and energy efficiency Measure 9.4: Energy production from renewable sources Act of 6th Dec on the Principles of Development Policy Making, Dz. U , Guidelines within eligibility of expenditures under Operational Programme Infrastructure and Environment, MRR/IŚ/1(2)12/2007 [14] Construction of Biomass Power Plant WidokEnergia in Koniecwałd, the Pomorskie Voivodeship Construction of Agriculture Biogas plant of 1MW in Boleszyn, the Varmian- Masurian Voivodeship Brief description of the project: Specific objectives of PA-9 programme cover increasing the efficiency of energy production, transmission and distribution, increasing energy effectiveness in the process of energy use, and increasing the amount of energy produced from renewable sources, including biofuels. Implemented projects have to show clear positive influence on the environment; in particular they should contribute to decrease of greenhouse gas emissions and lead to more rational use of natural resources. PA-9.4 measure supports RES projects on construction or modernisation of entities producing: - electricity using biomass, biogas, energy of wind and water (e.g. wind power plants, power plants using biomass or biogas, small hydro-electric power stations - up to10mw), - heat, with the use of geothermal and solar energy (e.g. solar collectors, geothermal installations), - CHP generating plants using RES (e.g. biomass). 18

19 PA 9.4 excludes the possibility of support: co-combustion technology of fossil fuels with biomass or biogas, investment in power generation in highly efficient cogeneration from RES (it is possible to implement such investments under the measure 9.1 High-efficiency energy) and construction or reconstruction of energy facilities burning municipal waste (they are supported in PA- 2.1) 19

20 Denmark Project 6 profile. Country, region: Project partner: EU Funding programme: Operational programme: Priority of operational programme: Measure of priority: National document, defining projects financing conditions: Project title: Denmark, Zealand region Roskilde University Intelligent Energy (Mobilizing local investment, technical assistance programme) Mobilizing local investment Support for developing turn-key renewable energy projects N/A Solrød Biogas Plant investment project Brief description of the project: The Municipality of Solrød in the Zealand region of Denmark, a Covenant signatory, with a submitted SEAP, has committed to achieve 55% greenhouse gas emission reduction in 2025 in their local climate plans. Studies have shown a viable basis for constructing a biogas plant using three main fractions: cast seaweed collected from the beaches at the Bay of Køge (Køge Bugt), organic waste from the local pectin and carrageenans production facility and manure from pigs and cattle at local farms. An annual reduction of 25,280-40,140 tons of CO 2 depending on the final technical solutions (40,140 tons CO 2 correspond to approximately 28% of the current municipal emissions) has been projected in preliminary studies. Within this proposal the major objectives are to ensure the mobilisation and launch of the biogas plant in Municipality of Solrød. With delivery of RE in the defined area of the VEKS transmission network accounting for approximately 370,000 inhabitants. The proposal therefore requests technical assistance for the key steps of the final preparation and launch stages. Funding of this project is relevant to the IEE programme under as it will mobilise the necessary support to ensure the construction and 20

21 operation of a plant increasing renewable energy (RE) levels and additionally delivering dual environmental benefits within the timeframe of 3 years. 21

22 3. Sustainability requirements for projects Certain sustainability requirements have been defined in national documents, developed for the assessment and evaluation of projects, which apply for funding under the respective programmes: European Cohesion Fund (Lithuania, Poland), European Agricultural Fund for Rural Development (Germany), and Intelligent Energy for Europe programme (Denmark). These requirements are provided in Table 1. Requirements on sustainability in national documents for assessment and evaluation of projects (see Annex of this report). The requirements here are provided using the list of sustainability principles and criteria developed in the frame of the Main stage project (Bioenergy Promotion). Table 2 also provides information on principles, criteria, indicators defined in assessed projects, provided by 5 project partners in 5 project regions. 4. Synthesis The requirements for projects funded under European Cohesion Funds are represented by the case studies from Lithuania and Poland. There are no requirements and respectively no criteria, indicators defined in the projects, funded under Cohesion Funds in Lithuania for the first two principles: I. Biodiversity; II. Resource efficiency. In Poland there are only general requirements for the same principles, which are defined in national legislation. The most significant sustainability requirements for projects both in Lithuania and Poland are defined for Principles: III. Energy efficiency. 22

23 Here emphasize is mainly on Promotion of CHP with defined indicators for high efficiency CHP, both in Lithuania and Poland. Most requirements for the projects are defined under the principle: IV. Climate change mitigation efficiency (Principle 1). These requirements are: Environmental Impact Assessment for some projects, Benefits and quality assessment methodology: estimated CO 2 reduction with defined indicators, change from fossil to biomass fuel with defined indicators. Here we can notify most clearly defined criteria both in Lithuania and Poland. Criteria (incl. indicators) and requirements are not defined separately for the principles: IV. Climate change mitigation efficiency (Principle 2); V. Social aspects (Principle 1); and VI. Social aspects (Principle 2). Requirements for the principle: VII. Economic issues are differently defined in Lithuania and Poland. There are no specific requirements in Lithuania. For Poland the Principle is identified in Detailed description of the priorities of OPI&E and Environment regional development, increase in employment and use of local renewable resources are considered as important factors of the PA 9.4 [9] implementation. Sustainability requirements for projects funded under the European Agricultural Fund for Rural Development (EAFRD) are represented by the case-studies from Germany. As a rule, each German federal state has its own Rural Development programme co-financed by the EAFRD. Schleswig- Holstein stands out from other federal states in Germany as it has its own regional bioenergy support scheme integrated in its Rural Development programme co-financed by the EAFRD. The assessed projects cover different aspects of bioenergy: the case from Lower Saxony refers to the harvesting/production of biomass, whereas the case of Schleswig-Holstein has a focus on the end use of 23

24 biomass and conversion into electricity and heat. Therefore, the sustainability issues relevant in each case are somewhat different: It is evident that the requirements on the principles: I. Biodiversity; II. Resource efficiency. are defined under various national sector legislation (e.g. environmental legislation including ambient air protection, water protection, nature conservation) and obligations as voluntary ecological forest certification PEFC. No specific requirements are defined for principles (in the case of Lower Saxony): III. Energy efficiency ; IV. Climate change mitigation efficiency (Principle 1). Concerning the principle: IV. Climate change mitigation efficiency (Principle 2) there is requirement for criterion ii. Land with high carbon stock such as wetlands and continuously forested areas should not be used for the production of biofuels or bioliquids if it implies a permanent change in land status. The operation takes place in forests, which are protected as a land use according to the Federal and Lower Saxony Forest Acts. No requirements are separately defined for principles: V. Social aspects (Principle 1); VI. Economic issues; V. Social aspects. (Principle 2) has the requirement for criterion i. Production of biomass for energy should not influence the possibility for recreational activity in a negative way, which is refined as Recreation in forests for the public is free according to the Federal and Lower Saxony Forest Acts. The second case of Hennstedt in Schleswig-Holstein illustrates that climate change mitigation efficiency and energy efficiency (overall energy efficiency, mandatory use of surplus heat), resource 24

25 efficiency (priority for residues and wastes) and also socio-economic criteria ( 55% of the input material to come from agriculture, local farmers as stakeholders/limited partners) were basic eligibility requirements defined in the funding guidelines. The whole project concept perfectly matched those requirements. One should keep in mind that the project did receive investment support not only from one funding source and its project design had to comply with other eligibility criteria as well, e.g. in order to benefit from operational support under the Renewable Energy Sources Act (preferential feed in tariff for electricity fed into the grid, CHP bonus and technology bonus for using innovative technologies including ORC). 25

26 5. Ranking of requirements to be included into period Project partners were also invited to provide expert evaluation (ranking) of sustainability principles and criteria upon their importance and relevance to be included into the programme documents for the funding period Ranking was defined as follows: 1 5 points (1-not important at all; 2 not important; 3 important, but not as much as to be included into official requirements; 4 important and should be included; 5 - very important and should be included. Ranking was provided by 5 project partners: Lithuanian Energy Institute (Lithuania); Freie Universität Berlin, Environmental Policy Research Centre (FFU) (Germany); Chamber of Agriculture Lower Saxony (Germany); BCEE Institute of Fluid-Flow Machinery - Baltic Eco-Energy Cluster (Poland) and Roskilde University (Denmark). The results of ranking are presented in Table 3. Ranking of sustainability principles and criteria (see. Annex of this report). Summary Table shows the main principles and criteria, which, in expert opinion, should be selected for defining requirements in national documents on funding projects under EU Cohesion Fund and Agricultural Fund for Rural Development fund. 26

27 Most important principles and criteria (expert evaluation >=4) Principle/Criterion Average rank values I. Biodiversity (principle) - Biomass production and extraction shall not endanger 5 biodiversity at the landscape9 level. However, special considerations to threatened species shall be taken at the local level. Biomass production shall whenever possible strengthen biodiversity by contributing to landscape variability i. Biomass production or extraction shall have neutral or positive effects on biodiversity 4,3 at the landscape level iv. Alien species shall be cultivated under conditions of careful control and monitoring 4,3 to avoid unintended dispersal II. Resource efficiency (principle) - Natural resources, such as soil, water and land, 5 shall be used efficiently and biomass production or extraction shall not endanger soil status or cause further deterioration of water quality and quantity i. Methods shall be chosen to minimize the risk for permanent physical damage to the 4,4 soil ii. Methods that cause a net depletion (after compensatory measures) of humus, 4,4 nutrients and minerals in the soil below levels necessary for the maintenance of the long-term soil production capacity shall be avoided iv. Residues from forestry and agriculture should be used for energy production or other 5 purposes v. Biomass production and extraction shall be conducted in a way that prevents further 4,5 deterioration, for example by erosion or nutrient leakage, and protects (or enhances) the status of aquatic ecosystems10 vii. Land shall be used efficiently, and practices that optimize productivity shall be used 4 viii. The use of the land should be optimized through locating, managing and designing 4 the production in the best suitable way and where synergistic effects are at the best III. Energy efficiency (principle) - For a sustainable production and use of 5 bioenergy the energy balance shall be considered, and the use of fossil energy sources during production of bioenergy should preferably be avoided. Input energy shall be minimized throughout the whole production chain and be distributed and accounted for on all products (main and co-products) based on an average product value proportion basis. i. Residues and co-products should be used for energy or other applications in order to 4,5 increase efficiency ii. If reuse or recycling of waste is not possible, use for energy shall be preferred over 4,5 dumping iii. The energy input in production, extraction and conversion of biomass to bioenergy 5 should be minimized iv. Efficient conversion technologies shall be used 5 vi. Use of waste heat shall be encouraged 5 vii. Combined production of heat, electricity and other products (cooling, steam) should be promoted whenever possible 5 27

28 IV. Climate change mitigation efficiency (principle I) - Greenhouse gas emissions 5 (i.e. emissions of CO2, CH4 and N2O in CO2 equivalents) from bioenergy production and use shall be minimized. i. The greenhouse gas emission savings of the production chain - including production, 5 extraction, conversion and transport - shall be maximized and compared to a reference scenario with fossil fuels. Both long and short term gain and losses shall be evaluated ii. The use of waste, residues and co-products shall be encouraged and accounted for 4,5 when calculating greenhouse gas emission savings iii. Special consideration shall be taken to biomass production on organogenic soils 4 iv. Bioenergy production that leads to a reduction of greenhouse gas emissions, for 4,3 example usage of manure for biogas production, shall be promoted v. Bioenergy production from waste should be encouraged 5 V. Climate change mitigation efficiency (Principle II) Biomass production shall not endanger important carbon stocks. Greenhouse gas emissions caused by land-use change shall be low in relation to the amount of greenhouse gas emissions that can be saved in a long-term perspective. i. Biomass (used for heating, cooling or electricity) shall only be produced on land where the loss of carbon stock caused by the land-use change can be compensated for by the accumulated greenhouse gas emission savings from substituting fossil fuels with produced biomass within a period of 20 years. Within a period of 50 years, the greenhouse gas emission savings should be at least 80 %. Emission savings from usage of co-products can also be accounted for ii. Land with high carbon stock such as wetlands13 and continuously forested areas14 should not be used for the production of biofuels or bioliquids if it implies a permanent change in land status15 VI. Social aspects (Principle I) The production and use of biomass for energy shall not endanger food security or local production of biomass for other applications VII. (Principle II) Bioenergy production should not endanger the conservation of cultural remains and heritages or prosperity of local communities and cultures. 5 4,

29 6. Conclusions After assessing a limited number of projects financed by EU funds the following conclusions can be drawn: 1. Only a limited number of requirements concerning application of sustainability criteria are provided in the programme documents, elaborated for assessment and selection of projects designed for support by EU funds. 2. The integration of sustainability considerations and requirements into corresponding programme documents varies from case study to case study and seems to be more frequent and pronounced in the case studies from Germany, than in the others. The case of Schleswig- Holstein illustrates that this might be partly related to the increasing environmental sustainability risks and undesirable developments caused by the rapidly increasing utilization of maize for biogas production which was heavily supported in recent years. 3. The assessed project case studies cover mostly biomass conversion projects (bioenergy plants producing heat and/or electricity). Energy efficiency, climate change mitigation efficiency and resource efficiency seem to be the most pronounced requirements in the corresponding funding programmes. 4. We should notify that requirements on principles and criteria for the Sustainable Development are often included in other national legislation. Much of the national legislation transposes and implements corresponding EU regulations and directives. In the EU, production of agricultural biomass, whether used for food, feed, material or energy, has to meet a series of statutory environmental rules regarding the quality of water, soils and air. In addition, farmers receiving direct payments have to comply with the agricultural and environmental requirements and standards set out under the cross compliance system. Moreover, all biofuels and bioliquids consumed in the EU shall comply with the sustainability criteria set out in the Renewable 29

30 Energy Directive 2009/28/EC in order to be eligible for the targets or any other public support. There are many other pieces of legislation relevant for sustainability of biomass production and use which are relevant for our case studies including legislation on ambient air protection, water protection, legislation addressing sustainable forest management (e.g. forest cutting regulations in Lithuania), nature conservation legislation, legislation addressing energy or resource efficiency (e.g. in Poland). Voluntary forest certification is another measure to ensure sustainable biomass production. However, all these regulations, legal provisions and rules and do automatically guarantee the sustainability of bioenergy production and use, due to lack of enforcement, regulatory gaps and loopholes etc. 5. Generalization of expert assessment of sustainability principles and criteria shows that all Sustainable Development principles, developed in the frame of the Main stage of the Bioenergy Promotion project, are significant and gained the highest ratings (4 or 5 of 5). However, criteria defining assessment of their implementation, gained highest ratings for principles II. Resource Efficiency, III. Energy efficiency and IV Climate Change Mitigation Efficiency only. 6. The main conclusion of this assessment should be the proposal on introduction of mandatory Sustainable Development principles and criteria, including methodologies on how these criteria should be met, in EU (and consequently National) legislation, which defines requirements for assessment and selection projects supported by EU funds, despite the fact that such proposal may not receive acceptance from some countries. 7. Several cases (cf. Hennstedt/Schleswig-Holstein) illustrate that sustainability requirements (e.g. referring to input material, energy conversion efficiency), should not be understood necessarily as a limitation or a burden, but rather as an opportunity which allows to create synergies to other sectors (business development, employment, biodiversity maintenance). 8. Member states and regions in the BSR should consider integrating sustainability principles and criteria when formulating the new national/regional programmes for the new funding period For solid and gaseous biomass used for energy, the EU Commission has issued a Report on sustainability requirements for the use of solid and gaseous biomass sources in 30

31 electricity, heating and cooling with recommendations to those Member States that wish to introduce a national scheme. Those recommendations provide a useful starting point, whereas the principles and criteria developed in BP should be seen as complementary guidance, particularly in those fields not covered by the EU recommendations yet (e.g. resource efficiency, socio-economic criteria). 31