Response to Department for Transport Call for Evidence on Advanced Fuels. Summary
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- George Briggs
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1 Response to Department for Transport Call for Evidence on Advanced Fuels Summary 1. The Energy Technologies Institute (ETI), a public-private partnership between global energy and engineering firms and the UK Government, believes the UK can have an affordable, secure and sustainable energy system in the future. However, it is important that the right steps are taken to ensure the cost of carbon reductions are affordable in the context of sustaining UK economic growth and industrial development. 2. ETI carries out three key activities: modelling and analysis of the UK energy system to identify the key challenges and potential solutions to meeting the UK s 2020 and 2050 targets at the lowest cost to the UK, investing in major engineering and technology demonstration projects which address these challenges with the aim of de-risking solutions both in technology and in supply-chain development for subsequent commercial investors providing support to enable the effective third party commercialisation of project outcomes. 3. In the last five years, the ETI has invested over 210m in projects across nine technology programme areas, including bioenergy and transport. 4. Recognising the need to focus and target investments to ensure value for money and leverage from public sector investments, the ETI s techno-economic modelling and strategic analysis of the UK energy system is a critical tool supporting effective innovation delivery. 5. The development priorities we have identified are: Efficiency introducing systems and technologies to reduce cost and improve buildings and transport efficiency Bioenergy informing the science, technology and business base for decisions on how to optimise the use of sustainable bioenergy resources in the UK Nuclear building supply chain capacity and investor confidence Gas a critical fuel for power, heat, storage and potentially transport Carbon Capture and Storage providing system demonstration and strategic insights for capture, transport and storage Offshore renewables reducing cost and building investor confidence ETI response to DfT call for evidence Advanced Fuels Page 1 of 9
2 6. We welcome the DfT s call for evidence on advanced fuels, in view of the importance of technology development in this area to the UK s future ability to decarbonise transport effectively and efficiently. 7. Our work on the UK energy system transition shows the optimal pathway for decarbonising transport remains uncertain, but advanced liquid fuels will be a key technology option. Liquid transport fuels are not the only option, however, it is clear that sustainable liquid biofuels for transport are a strategically important low carbon technology option and that technology development should be supported and incentivised. 8. While it is clear that significant decarbonisation of transport will be needed, the full extent required will depend on a range of broader developments in the UK s energy system (for example, the UK s longer term ability to deploy carbon capture and storage with bioenergy). This raises a range of strategic considerations (infrastructure changes, consumer acceptance issues, and transitional opportunities) which are explored in greater depth in our paper on light vehicles An affordable transition to sustainable and secure energy for light vehicles in the UK A system wide perspective is vital to ensure a cost effective and secure approach is taken to integrating energy provision, delivery and use across power, heat and transport. In this context, developing flexible technologies will be particularly valuable. An energy system level perspective is vital to inform thinking on how best to decarbonise transport and to ensure effective utilisation of available biomass feedstocks (1G, 2G, wastes and residues etc) within or beyond the transport sector. As highlighted above, the ETI specialises in this system level aspect of energy planning. 10. Given the uncertainties and the flexibility offered by low carbon transport biofuels, development of advanced biofuels is a highly valuable technology option for the UK. This particularly applies to technology options which can be deployed flexibly as part of the transition pathway for the decarbonisation of the UK transport sector. These flexible options include: Technologies which can cost-effectively and efficiently use multiple feedstocks this would enable commercial deployment to occur in the short-term based on feedstocks available now, such as 1G agricultural residues, or waste. It would also provide the market pull for more carbon-efficient feedstocks such as perennial energy crops to be produced and supplied for use in the medium-term, ultimately delivering greater decarbonisation. Technologies that offer the greatest flexibility of product (i.e. flexibility of energy vector produced power, heat, gas and liquid transport fuels). This enables commercial deployment of technologies which could adapt to changing priorities and market opportunities. Advanced fuels which can be utilised at high blend levels without changes to vehicle or infrastructure. 1 ETI response to DfT call for evidence Advanced Fuels Page 2 of 9
3 11. Robust evidence on whole system greenhouse gas impacts is vital, therefore technology choices should not rule out forestry and energy crops as sources of feedstocks. It will be essential to ensure that the development of policy and rewards for advanced fuels is based on the development of robust accounting of the full greenhouse gas impacts of fuels and their feedstocks. We understand the emphasis placed on waste and residue as feedstocks which carry less risk of indirect land use change impacts, but it would be wrong to assume that perennial energy crops and short rotation forestry cannot offer sustainable feedstocks. Their potential should be assessed on the basis of sound evidence. ETI has commissioned a project (ELUM) 2 to assess the impact of different land use changes to bioenergy crops across the UK, in order to quantify the potential land area that could be used to sustainably produce biomass feedstocks. This project will deliver a spatial analysis software tool, linked to climate, soil, land use and empirical data from commercial farms in the UK, by late Focusing on pragmatic solutions is important in sustaining industry and public engagement. This suggests the UK should avoid complex market pull policy instruments, relate policy incentives to the extent of GHG benefit, and give technology support to strategically valuable (flexible) technology options (support for R&D and demonstration). 13. The design of support mechanisms for fuels should be guided by a range of considerations : Minimising complexity and the creation of new technology-specific policy instruments. Technology and sector neutrality in market pull measures, avoiding the risk of a wide variety of different implied market prices facing market players. Relating the level / strength of support to robust evidence on the extent of greenhouse gas benefits (this would avoid the need for a definition of advanced fuels ) 14. Taking these factors into account points towards : Technology push measures (including funding of R&D and demonstration projects) focused on strategic and flexible technology options, guided by strategic analysis of UK transport decarbonisation needs, transition pathway and supply chain constraints Market pull measures based on a carbon-linked supply obligation where credits are linked to verified GHG accounting evidence on emissions savings. 15. The ETI is continuing to develop insights into the transition and technology options for the UK in decarbonising transport and the broader UK energy system and we would be happy to provide further evidence and assistance to DfT in exploring policy options for promoting advanced low carbon transport fuels. 2 See Bioenergy Programme pages on the ETI website ETI response to DfT call for evidence Advanced Fuels Page 3 of 9
4 Specific question responses 1. Should the government focus support for advanced fuels in certain transport sectors? If so, why? a. What are your views on the government s analysis of the use of advanced biofuels in different transport sectors, as set out in the UK Bioenergy Strategy? Are you aware of alternative estimates of the future uptake of advanced fuels in each transport sector? 16. In the medium-to longer-term the UK Bioenergy Strategy advocates the use of biomass in the transport sector, either through hydrogen production from bioenergy with CCS or through biofuels for aviation and shipping if CCS is not available. We agree with this principle that is, that maximum decarbonisation will be delivered when using biomass in combination with carbon capture and storage. To do this most cost-effectively, it is likely to require large scale gasification or IGCC hydrogen plants close to the points of carbon sequestration. We view gasification as one of the primary technologies for biomass utilisation in the UK. It is estimated that 80-90% of the CO2 released during conversion can be captured using CCS on centralised, large-scale plants delivering power, heat and gas conversion facilities. This offers greater CO2 benefits than linking CCS with liquid biofuel conversion technologies. Where CCS is not available, analysis at the system level highlights the importance of using biomass in sectors that have fewer alternative low carbon technologies available. b. What physical and policy barriers are there to the uptake of advanced fuels in each transport sector? 17. As set out in the ETI's An affordable transition to sustainable and secure energy for light vehicles in the UK 3 a key enabler to realising the full potential of the biofuel opportunity is to ensure the vehicle parc is compatible with high blend biofuels by the mid-2020s. Given that vehicles typically last well over a decade, it is important to sell and promote compatible vehicles now. 18. Making spark ignited vehicles compatible with the relevant liquid biofuels is not expected to present a challenge as small changes (predominantly for seals and to engine mapping) would require only modest investment. For compression ignition engines (in both light vehicles and heavy duty vehicles) higher blends of "drop-in" liquid biofuels are not expected to be an issue (as the fuels ostensibly have the same properties) but there may be more of a challenge with other types of less stable and well controlled biofuels, whilst still making these engines comply with non-co2 emissions. 3 ETI response to DfT call for evidence Advanced Fuels Page 4 of 9
5 19. A fuel grade standard for high blend biofuel has not yet been fixed, nor has a timetable for its introduction or phasing out of the current low blend biofuel grade. While multiple grades could be introduced over the period to 2050, each one needs to be maintained for legacy vehicles so it would be preferable to make the transition just once. In a similar way to the transition from leaded to unleaded gasoline the Government has an important role to play in leading this transition. A recognised standard will be essential to promote investment by the supply chain and vehicle manufacturers in altering their vehicles to suit the proposed advanced fuels. 20. One of the present key challenges is the lack of understanding of the relative carbon, energy and mass balances associated with the use of different feedstocks in different pathways. It is anticipated that the greatest GHG emission benefit will be delivered by using advanced bioenergy conversion technologies based on dedicated bioenergy crops and short rotation forestry. For power, heat and gas production, we believe the most cost-effective technology family is gasification, whilst for liquid transport fuels ligno-cellulosic fermentation and pyrolysis also appear attractive. 21. Very little of biomass feedstock is currently available within the UK so significant effort will be needed to increase domestic biomass feedstock production. Greater understanding around sustainability, optimal land use, economic viability and public perception is also required to increase domestic production. The ETI is involved in projects to address several of these evidence gaps. 22. Biomass and biofuels can, and will, be imported in addition to local production. However, ensuring that imports represent genuine greenhouse gas reductions is challenging. Sustainably produced biomass may become a limited and expensive global commodity, with a large part of the carbon credit value retained by the producing nation. 2. Is UK government support necessary to commercialise advanced fuel technologies? If so, why? a. What should advanced mean? What role should process, feedstock and sustainability have in this definition? 23. We believe advanced should mean focusing on the acceleration of technologies which can cost-effectively and efficiently utilise multiple feedstocks and on the acceleration of technologies that offer the greatest flexibility of energy products produced. This requires a system level approach to ensure feedstocks used do deliver genuine carbon savings when compared to both fossil fuels and other potential costcomparable low-carbon conversion routes. b. What economic opportunities are there for the UK in developing this industry? 24. Our analysis suggests that if the future UK energy system is built without the use of bioenergy, it will cost between billion per year more by 2050 for the UK to meet its climate change targets. Specifically if biomass is not utilised within the transport sector, opportunity costs of at least 5 billion are anticipated. ETI response to DfT call for evidence Advanced Fuels Page 5 of 9
6 25. The development of a UK bioenergy industry could contribute an estimated 19 billion ( 6-33bn) to GDP up to , building on the UK s world class academic, industrial and commercial strengths, in particular around gasification, plant breeding, sustainability and core scientific understanding. 3. What could advanced biofuels deliver, and by when? a. Do you agree with E4Tech s assessment on the availability of waste and residue feedstocks, and their estimated costs of advanced fuels? 26. E4Tech s assessment of available feedstocks seems reasonable, but it must be remembered that much of this reflects availability to the wider bioenergy sector, not just the transport sector. Any assessment of available feedstocks must take account of existing and planned plants which will compete for the resources. The waste hierarchy provides a tool to prioritise competing uses in this context. Development of a similar tool for prioritising the use of biomass feedstocks (1G, 2G, agricultural residues etc.) would provide significant and strong clarity to emerging markets, and could be used to align relevant policies and government support. 27. The ETI ELUM project 5 is assessing the impact of different land use changes to second generation bioenergy crops across the UK, to quantify the potential land area that could be used to sustainably produce bioenergy crops. This project will deliver a spatial analysis software tool, linked to climate, soil, land use and empirical data from commercial farms in the UK, by late b. Do you agree with E4Tech s proposed criteria for when an advanced biofuel should be supported? 28. Generally yes, but there needs to be strong emphasis on the sustainability and availability of feedstock supply - with sustainability compared to both fossil fuels and alternative uses of that feedstock in different bioenergy pathways. Where it is proposed to use agricultural residues or food crops further assessment is needed to determine whether the whole life-cycle benefits justify their use in biofuels. 4. What could hydrogen deliver as a transport fuel, and by when? 4 Low Carbon Innovation Co-ordination Group Bio TINA 2012: 5 See Bioenergy Programme pages on the ETI website ETI response to DfT call for evidence Advanced Fuels Page 6 of 9
7 29. Our analysis, described in An affordable transition to sustainable and secure energy for light vehicles in the UK 6, points to investment in hydrogen energy infrastructure for light vehicles as a potentially important insurance option but one with significant investment risks. It is unlikely to achieve a lower cost outcome for the UK than the alternative pathway, which centres on increased vehicle efficiency combined with electrification and the use of advanced sustainable biofuels, and is described in the same report. Given the rate of turnover of the vehicle fleet it will be important to be in a position to make an informed decision about whether to seriously invest in hydrogen infrastructure by the mid-2020s, if 2050 emissions targets are to be met. Investment in the interim should be focussed on increasing understanding and reducing both risk and cost. 30. There are several important factors to consider when assessing the viability of using hydrogen for fuelling vehicles, in particular: the source of hydrogen, the vehicles themselves and the supporting infrastructure to allow the vehicles to be refuelled. These will all contribute to the overall cost of pursuing a hydrogen pathway as well as the lifecycle emissions associated with it. 31. For vehicles, including HDVs, uncertainties persist about cost for both hydrogen storage and fuel cells. There is also the issue of the high level of hydrogen purity that is required for fuel cell vehicles (fuel cells being the favoured industry solution at the moment) and how this would be supplied. 32. There are multiple potential options for supplying hydrogen (e.g. via road haulage, via pipeline or via "localised" electrolysis). Each will present particular considerations in relation to flexibility, storage, capacity, etc. In addition, the economics associated with different levels of deployment of each option differ markedly. This will all have a bearing on the potential for successfully rolling out a nationwide refuelling network. Understanding the practicalities of this transition and the steps that would be required will be critical for making an informed decision about hydrogen for transport 33. We are currently commissioning a study, Gas Vectors Engineering Pathways, which will assess the practical engineering implications of large scale changes in the use of different energy carrying gases, with hydrogen being one the gases being examined. It is anticipated that Phase 1 will be delivered by the end of The transition considerations for other parts of the system (such as the vehicles and hydrogen production) are also important for determining whether hydrogen vehicles can deliver what is required and at what cost. 35. Further information will also be available in the LCICG's soon to be published Technology Innovation Needs Assessment (TINA) on Hydrogen for Transport. 5. What could synthetic fuels and fuels from fossil waste deliver, and by when? a. What information can you provide on waste fossil gas processes and their potential benefits and drawbacks? 6 ETI response to DfT call for evidence Advanced Fuels Page 7 of 9
8 36. The greatest GHG emission benefit is likely to be delivered through the use of advanced bioenergy conversion technologies, based on dedicated bioenergy crops and short rotation forestry. For power, heat and gas production, we believe the most cost-effective technology family is gasification ; whilst for liquid transport fuels, lignocellulosic fermentation and pyrolysis also appear attractive. 37. Gasification technologies can also be operated utilising waste. We have commissioned and funded an integrated waste gasification demonstration project to evaluate the potential benefits and drawbacks of different waste gasification technologies at the 5-20 MWe scale. 38. Gasification technologies to generate energy should only be considered where the waste hierarchy has been followed, i.e. resources should be recycled where possible. 6. What could biomethane deliver as a transport fuel, and by when? 39. Biomethane is suitable for combustion in internal combustion engines (as has been demonstrated by the TSB s Low Carbon Truck programme). The exact engine type used affects the efficiency of combustion and can affect the GHG emissions generated. However, if the biomethane is produced from waste then less efficient (but lower methane slip) combustion approaches may be preferable from a GHG perspective. Therefore, the DfT may want to consider policies which promote the right advanced fuel to be produced in the right way, stored correctly and furthermore, inhibit the use of engine technologies which overtly emit either local pollutants or methane. 40. As with liquid biofuels, a biomethane standard would give the engine and vehicle manufacturers confidence to develop products which can utilise biomethane. Alternatively, engine manufacturers can perform a degree of adaptation (to allow varying methane number for example) but some form of minimum standard will still be required. 41. For use in Heavy Goods Vehicles, liquefied biomethane may be required to achieve the necessary storage density and therefore range. The energy, cost and GHG intensity of the operation should be considered and accounted for 42. For bio-fuels to have a beneficial impact on CO2 emissions they need to be sustainable on a lifecycle basis. For their impact to be significant, sustainable bio-fuels will need to make up a larger proportion of the fuel mix in the relatively near term. 43. The delivery of advanced sustainable bio-fuels will require concerted investment in R&D both in terms of academic led research and industry led development. This will be critical for bio-fuels to be successful. 44. It is important to assess all technologies for their cost-effective scalability i.e. can they be deployed at small to large scale, sufficient to deliver optimal carbon savings and optimal product volumes? Anaerobic digestion is commercially available, but has significant technical and economic issues which need to be addressed if it is to be deployed more widely. Large scale deployment would be required to deliver a significant contribution of bio-methane for transport needs. Therefore alternative advanced conversion technologies should also be considered, such as gasification and pyrolysis. ETI response to DfT call for evidence Advanced Fuels Page 8 of 9
9 45. We anticipate that advanced gasification technology will be commercially available in the early 2020s and this should deliver cost-effective routes for producing bio-methane at scale, over and above the existing opportunities provided by anaerobic digestion. ETI in-house modelling also suggests that significant amounts of hydrogen and biomethane could be produced in the UK, if sufficient feedstock is available to underpin the potential commercial deployments in the UK. 8. What support mechanisms could effectively support the deployment of advanced fuels? 46. There are significant risks in creating bespoke support mechanisms and targets for particular parts of the energy system. The risk is of adding complexity and creating uneven incentives for cutting emissions (in effect a wide variety of different implied carbon prices facing market players). The likely effect would be to add costs and deliver a sub-optimal set of options for decarbonising the economy. As far as possible it makes sense to allow markets to pull through technologies, with a consistent carbon price signal cutting across all sources of emissions. ETI response to DfT call for evidence Advanced Fuels Page 9 of 9
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