Annex to the Deliverable 3.2 BENCHMARKING Report-

Transcription

1 Annex to the Deliverable 3.2 BENCHMARKING Report- Bioenergy overview of GERMANY July 2015 AUTHORS: Matthias Edel, Klaus Völler, Toni Reinholz (dena) Senta Schmatzberger (FNR) Ayla Uslu, Hamid Mozaffarian, Luuk Beurskens, Joost van Stralen (ECN) Biomass Policies is co-funded by the Intelligent Energy for Europe Programme of the European Union. The sole responsibility for the content of this report lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EASME nor the European Commission are responsible for any use that may be made of the information contained therein.

2 Contents 1. Introduction Relevant strategy documents dedicated to bioenergy Policy measures related to bioenergy Electricity Heating and cooling Transport Bioenergy deployment Size of the market Bio-Electricity (bio-e) Bio-Heat (bio-h) Biofuels Bioenergy realisation in comparison to NREAP target Domestic versus imported biomass feedstock use Barriers to bioenergy deployment & examples of good practices Potential barriers to bioenergy deployment Examples of good practices and lessons learned Selected value chains Policies dedicated to the value chains Perennials Straw Organic Wastes Good practices related to the utilisation of value chains Straw: FNR Organic wastes: BSR Perennials: Short rotation coppices (SRC) Policy framework related to sustainability and resource efficiency Sustainability Resource efficiency...27 ANNEX I

3 1. Introduction Biomass Policies project, supported by the Intelligent Energy for Europe programme, aims to improve the policy framework for the mobilisation of indigenous bioenergy value chains in contributing to the 2020 renewable energy targets and achieving the bioenergy targets set in the National Renewable Energy Action Plans and beyond. The project pays particular attention to competition, resource efficiency and sustainability. The focus is on the countries participating in the project the Netherlands, the United Kingdom, Belgium, Germany, Austria, Finland, Spain, Greece, Slovakia, Poland, and Croatia. This report is part of the benchmarking study that aims to qualitatively and quantitatively analyse the different national policy approaches applied in terms of their impacts on the bioenergy deployment in general and the value chains of the selected biomass resources in particular. Based on the indicators presented in Annex I the Country reports are drafted with the help of the National Agencies and used as the basis for benchmarking assessment. 3

4 2. Relevant strategy documents dedicated to bioenergy National policy strategy on bioeconomy The Policy Strategy Bioeconomy sets priorities for advancing towards a knowledge-based bioeconomy and it highlights areas that require action. The aim is for the guiding principles, strategic approaches and measures to contribute to making use of the areas of potential for the bioeconomy in Germany, and also help to strengthen the structural transition to a biobased economy. The strategic approaches are to be further developed to match the long-term goals and to adapt to new challenges. The degree of success achieved by the strategy is to be examined in a Progress Report [1]. National research strategy bioeconomy 2030 Between 2010 and 2016, the "Nationale Forschungsstrategie BioÖkonomie 2030" of the German Federal Government grants 2.4 Billion Euro to research and the realization of a knowledge-based bioeconomy in Germany. The government's goal is to reach a structural economic shift from a fossilto a biobased industry through research and innovation. This shift is connected with enormous chances for growth and employment. At the same time, the strategy aims at taking over responsibility for global nutrition, security of supply for biobased raw materials and energy as well as for climate and environmental protection on an international level [1]. Green Paper An Electricity Market for Germany s Energy Transition The Green Paper An Electricity Market for Germany s Energy Transition is a discussion paper published by the Federal Ministry for Economic Affairs and Energy to develop a new market design and regulatory framework that fits the needs of the rising share of renewable energies. Due to fluctuating renewable energies, there shall be a competition between several flexibility options and capacity reserves. The future market design and regulatory framework needs to be designed in a way to make electricity supply safe, cost efficient and environmentally friendly. The Green Paper discusses a number of measures that seek to fulfil the task of appropriate use of capacity in a more secure and efficient way. They include improvement of the balancing group management, expanding the electricity grid and further developing the balancing energy markets. National Action Plan on Energy Efficiency (NAPE) The National Action Plan on Energy Efficiency (NAPE) aims to convince all stakeholders of the need to raise energy efficiency and involve them in these efforts. It seeks to show them the scope and opportunities and provide evidence confirming the benefits of a commitment to energy efficiency. It will entail new business models, innovations for energy-saving measures and innovative new products, especially for small and medium-sized enterprises. The central short-term measures of NAPE include: Introducing new competitive tendering for energy efficiency; Raising funding for building renovation (CO2 Building Renovation Programme); 4

5 Introducing tax incentives for efficiency measures in the building sector supported by the Federal Government and state governments; Setting up energy efficiency networks together with business and industry. Aktionsprogramm Klimaschutz 2020 The German Government is aiming to lower the emission of GHG up to 40 percent in 2020 in comparison by Targeted sectors are the energy sector, industry, trade and commerce and households. The energy sector is the sector with the highest GHG-Emissions. The main action fields here are emissions trading, energy savings, development of the renewable energies sector and increasing the combined heat and power production. The Mobility and Fuels Strategy (MFS) The MFS shall contribute to achieve the targets formulated for the transport sector in the German government s energy concept. It is called a learning strategy that provides a comprehensive overview of the technologies and of the options for energy and fuel for the various modes of transport. In addition, it seeks to broaden the knowledge base on issues of energy and technology in the transport sector, to analyse the framework conditions and to prioritise targets. Its purpose is to identify ways in which the energy transition in Germany can be implemented for transport in the future. Table 1 Ranking relevant strategy documents dedicated to bioenergy Strategy document Year Voluntary Binding Proposed by Comments National policy strategy on bioeconomy National strategy 2030 research bioeconomy Electricity Market Green Paper Aktionsprogramm Klimaschutz 2020 The Mobility and Fuels Strategy MFS 2013 X Federal Ministry of Food and Agriculture (BMEL) 2010 X Federal Minister for Education and Research 2014 Federal Ministry for Economic Affairs and Energy (BMBF) 2014 X Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB) 2013 X Federal Ministry of Transport and Digital Infrastructure (BMVI) The bioeconomy strategy concerns different policy areas such as industrial and energy policies, agricultural, forestry and fisheries policies, climate and environmental policies and research and development policies. Research for structural change from an oilbased to a bio-based industry. Development of a new market design and regulatory framework that fits the needs of the rising share of renewable energies. Action program to reach 2020 plans for climate protection over every relevant sector. Relevant modules are National Action Plan on Energy Efficiency (NAPE, see 2.1.4), Emission reduction in industry, waste management and agriculture, climate friendly building and living and climate protection in mobility and electricity production. The MFS aims to provide information and orientation on the current status, opportunities and challenges of alternative fuel options and innovative drives, as well as on the effect of energy issues on transport. 3. Policy measures related to bioenergy 3.1 Electricity 5

6 Renewable Energy Sources Act Act on Granting Priority to Renewable Energy Sources (EEG 2014) In Germany, the most important means to promote electricity from renewable sources is the feed-in tariff as set out in the EEG. The act aims to increase the share of electricity from renewable energy sources in total energy supply from at least 40% in 2025 to at least 80% by With the amendment of the EEG in 2014 a development corridor for biomass power was introduced, limiting the additional capacity of biomass to 100 MW el (gross) per year. Direct marketing is obligatory for installations larger than 500kW (as of 2016 larger 100kW). For direct marketing, a market premium is granted. The amount of the market premium is calculated each month and shall compensate the difference between electricity market price and a defined value according to the capacity of the installation (former feed-in tariff). For bioenergy the amendment of the EEG aims to incentivise flexible and demand-orientated power production. Therefore, newly installed biogas plants can receive a flexibility supplement for the provision of flexible installed capacity. Already existing biogas and biomethane plants can receive a flexibility premium for additionally installed capacity at the latest, an auction model should be introduced for the funding of renewable energies. The design and introduction of an auction model for biomass is under discussion. For installations up to 1MW an exception can be applied funding this kind of installations with an administrative value. Values (former feed-in tariffs) On biomass plants, only 50 % of the amount of electricity that the plant can produce per year is eligible in case of plants with a capacity of more than 100 kw [2]. The values applicable to biomass power plants put into operation after depend on the installed capacity (see Table 2). If biogas is gained from anaerobic digestion that is at least 90 percent biowastes higher values can be applied. Higher values can be applied, too, if the minimum share of manure is 80 % and the installed capacity is at most 75 kw. : Table 2: Values for electricity from biomass Installed capacity kw Biomass ct per kwh Organic wastes ct per kwh <= 75 13,66 15,26 23,73 <= <= ,78 - <= ,55 13,38 - <= ,85 - Manure ct per kwh The support for electricity from biomass will be reduced by 2 % compared to values to be applied in the year before. Biomass-related technologies are eligible under the following conditions [2]: Obligation to employ CHP technology. Electricity from plants using biomethane is eligible only if the electricity is generated through CHP. The operator of the plant has to prove that the plant meet this requirement. 6

7 Definition of biomass. The substances defined as biomass are specified in a separate ordinance (BiomasseV). Obligation to keep a record of substances. Electricity will be eligible for the full value as specified in the EEG only if the plant operator can prove which type of biomass is used by presenting a copy of a record of the substances used. Technical requirements. The plant operator shall make sure that devices are used to avoid any escape of biogas. Market Premium (EEG, 35) Instead of receiving the feed-in tariff for electricity from renewable sources, a plant operator may choose to sell his electricity directly, i.e. to a third party by a supply agreement or at the stock market, and claim the so-called market premium from the grid operator. The amount of the market premium shall be calculated each month. In general, plant operators are free to choose between the feed-in tariff and the market premium for direct selling. Flexibility premium for existing installations (EEG, 54) Biogas plants and biomethane CHP-plants that were put into operation before may claim a flexibility premium for providing additional installed capacity for on-demand use. For a plant operator to be eligible for the flexibility premium, he shall provide additional installed capacity that may only be used on demand rather than on a regular basis. And, he has to proof that the generation unit can produce electricity on demand Flexibility supplement for new installations For the provision of flexible installed capacity newly installed capacities larger than 100 kw a flexibility supplement exists. It is 40 per kilowatt and year. Ordinance on the Generation of Electricity from Biomass (BiomasseV) For the scope of application of the EEG, the BiomasseV Ordinance regulates which substances are classed as biomass, the substances for which an additional substance-based tariff may be claimed, which energy-related reference values are to be used to calculate this tariff and how the substancebased tariff is to be calculated, which technical procedures for electricity generation from biomass fall within the scope of application of the Act and which environmental requirements must be met in generating electricity from biomass [1]. Biomass Sustainability Regulation (BioSt-NachV) The Biomass Sustainability Regulation stipulates the sustainability requirements for bioliquids, according to the Renewable Energy Directive. Operators of plants producing electricity from liquid biomass under the EEG or by cross-reference with the EEWärmeG obligated under EEWärmeG when fulfilling commitment through liquid biomass [1]. 3.2 Heating and cooling Renewable Energies Heat Act - Act to Promote Renewable Energy for Heating Purposes (EEWärmeG) EEWärmeG regulates the obligation to use renewable energy in new buildings. Owners of new buildings must cover part of their heat supply with renewable energies. This applies to residential and non-residential buildings for which a building application or construction notification was 7

8 submitted after 1 January The share depends on the source of renewable energy used in the building. It is 15% for solar energy, 30% for heat from a biomethane or biogas fired CHP plant and 50% for other sources. Among these other sources, biomass fuels (firewood, pellets, chips, etc.) can only be used in high-yield boilers that comply with air quality legislation. The law is supplemented by the Market Incentive Programme (MAP). Public buildings are stimulated to take an exemplary role. The Biomass Sustainability Regulation stipulates the sustainability requirements for bioliquids, according to the Renewable Energy Directive. BAFA renewable heat investment support In the framework of the Market Incentive Programme (MAP) BAFA provides investment support for heat produced in existing buildings. Installations in new buildings are only eligible if process heat is used. The investment support is divided into basic support, bonus support and innovation support. Installations need to be erected in Germany and have to be operating for at least 7 years. A combination with other support schemes is possible if not otherwise stated. The following biomassrelated technologies are supported [2]: Plants with automatic feeding for the burning of solid biomass for thermal usage 100 kw nominal heat output Low emission logwood boilers 100 kw nominal heat output Secondary measures for emission reduction and efficiency of plants with 100 kw nominal heat output. KfW Renewable Energy Programme Premium In the framework of the Market Incentive Programme (MAP), KfW provides low-interest loans with grant payback support for the development and expansion of heat installations/plants. Support is given to [1]: Plants for the purification of biogas to natural gas quality and biogas pipelines for nonpurified biogas Plants with automatic feeding for the burning of solid biomass for thermal use >100 kw nominal heat output including hot water storage CHP using solid biomass including buffer storage Construction of local heating networks, mainly fed from renewable heat. Innovation support can be granted in case of additional hot water storage capacity or extra low emission. Both support schemes can be cumulated. CHP with a maximum nominal heat output 2000 kw support if overall efficiency is > 70%.Local heating networks are supported with up to 1 Mio. Euro. German Energy Saving Ordinance (EnEV) The Energy Saving Ordinance ("Energieeinsparverordnung (EnEV)") is an important part of the energy- and climate policy of the German Federal Government. The Ordinance regulates energy performance for new buildings and building stock as well as energy certification of buildings. Regarding new buildings, EnEV poses requirements to the primary energy demand. The thermal insulation of the building envelope as well as the energy efficiency of the building appliances used (heating, hot water, ventilation, cooling) is taken into account. 8

9 3.3 Transport Federal Immission Control Act (BImSchG) The main means of support for renewable energy sources used in transport is a quota obligation. Subject to the obligation are only biofuels 1. The act foresees to support electricity and methane and hydrogen using renewable energy (power-to-gas) in the future, too. The mechanism obliges companies importing or producing petrol, gas or diesel fuels to ensure that biofuels make up a defined percentage of the company s total annual sale. Obliged fuel suppliers may assign this obligation to other companies. From 2015, a greenhouse gas reduction quota is introduced. Accordingly, the allowed share of greenhouse gases discharged from diesel and gasoline is being reduced in form of a quota, meaning that the usage of biofuel is only indirectly stimulated. By 2015, emissions have to be reduced by 3.5%, by 4 % from 2017 on and by 6% from 2020 onwards [2]. Energy Tax Act (EnergieStG) The Energy Tax Act regulates the amount of taxes on energy consumption on German territory. The Act also includes tax incentives for the production of biofuels. The tax deduction is only granted if the produced amount of biofuel is pure and not used to fulfil the biofuel quota. Some biofuels are exempted from this rule, namely [1]: Synthetic hydrocarbons or synthetic hydrocarbon mixtures which are obtained by thermochemical conversion of biomass. Alcohols, that have been produced through biotechnological processes to reveal cellulose. 1 Biofuels exclusively produced from biomass, energy products that pro rata have been produced from biomass, biodiesel, bioethanol, biomethane. 9

10 4. Bioenergy deployment 4.1 Size of the market Bio-Electricity (bio-e) Figure 1 presents historical data for bio-e production as well as bio-e capacity. Figure 1: Historical data for bio-e production and capacity[5], [6] Table 3: Historical data for the share of gross final bio-e consumption to total gross final RES-E and total electricity consumption [6] Share bio-e to total RES-E Share bio-e to total electricity % 30.9% 28.8% 29.8% 29.4% 29.5% 4.92% 5.26% 5.9% 7.1% 7.5% 8.2% 10

11 a) Biogas The main driver for the development of biogas is the Renewable Energy Sources Act, which guarantees grid access and provides a feed-in tariff for electricity from renewable sources. Since the introduction of the EEG in 2000, biogas has experienced a continuous growth. The growth has additionally accelerated since Different bonuses were implemented for the use of renewable raw materials and manure. From 2004 to 2012 the number of plants has increased from 2,000 to 7,500. In the same period the power production from biomass has increased by the factor of 10. The introduction of a bonus for feedstock in 2004 (e.g. maize) and for manure in 2009 pushed the development further. In 2012 the manure bonus was removed and the amount of maize as input was limited. As a consequence of these and different other factors(i.e. saturation effects) the installation rate and the size of the plants have decreased. The amendment in 2014 cut back the feed-in tariffs compared to previous years and limited the development of biomass power to a corridor of 100 MWel annually. The additional capacity is expected to be much lower than the corridor. The first biomethane plant was commissioned in The number of biomethane plants totals to 177 plants by June Most of the biomethane that is produced and injected into the natural gas grid is used for power production according to the EEG. Small shares of biomethane are applied in heating applications, in natural gas vehicles and to a very little amount as feedstock in the chemical industry. b) Solid biomass Electricity production from solid biomass is mainly based on waste wood and residual forest wood. Like biogas, electricity production from solid biomass has experienced a significant growth since 2000 with the introduction of the EEG. By time, rising wood prices led to a slowdown and the installation of smaller plants. The development nearly stopped in By that time thermo-chemical wood gasification came to market maturity which led to a low, but constant growth. In wood gasification plants with an installed capacity of 13 MWel have been in operation. Altogether approximately 710 solid biomass plants with an installed capacity of 1,578 MWel are in operation in Some other biomass power plants exist in the paper and pulp producing industry with co-firing of biomass and non biogenic fuels like fibres and residues from waste paper treatment plants, sewage sludge and fossil fuels like coal, gas and small amounts of heating oil. c) Liquid biomass Liquid biomass in electricity production is from vegetable oils like rape oil, soy oil or palm oil. A sharp increase in vegetable oil prices stopped the development of electricity production from vegetable oils. Since than about half of the plants have been decommissioned or shifted to other fuels like biomethane or wood gasification. By the end of 2014 about 180 MW were in operation. Due to relatively low prices the majority of plants run on palm oil. 11

12 4.1.2 Bio-Heat (bio-h) Figure 2: Historical data for bio-h consumption [6] Table 4: Historical data for the share of gross final bio-h consumption to total gross final RES-H and total heat consumption [6] Share bio-h to total RES-H 88.3% 89.0% 87.3% 87.0% 87,1% 85,2% Share bio-h to total heat 7.5% 7.9% 8.3% 8.5% 8,6% 8,4% The majority of Germany s energy consumption derives from heating demand in public and private buildings and in the industry. 39 % of heat is used for process heating, the other 61 % are for space and water heating purposes. The German Government seeks to increase the renewable`s share in the heat sector from about 9.9 % by the end of 2014 to 14 % in With a share of round about 90 %, biomass is the dominating source for renewable heat. The other 10 % are provided by heat pumps and solar thermal systems. About 85 % of the biomass heat were from solid biomass (wood, pellets, chips), while 12.5 % were from combined heat and power from biogas plants. [6] Key drivers for the development of renewable heat supply are high fossil fuel prices, the obligations to use renewable heat in newly built houses, the EnEV and the support mechanisms of the market incentive programme (MAP). The objective of the EEWärmeG is to reach a share of 14 % renewable energies on final energy consumption for heating and cooling by For this purpose a part of heating and cooling demand of buildings have to be covered by renewable energies. The obligation concerns new erected buildings, existing public buildings (model role) as well as fundamentally renovated buildings. Regarding biomass the obligation is fulfilled if 50% of the final heat consumption is covered by liquid 12

13 or solid biomass, which is used in high efficiency boilers. Alternatively gaseous biomass can be used to cover 30% of the final heat consumption, if it is used for combined heat and power production. The market incentive program (MAP) contains special provisions on innovation promotion for specific, particularly innovative solutions in the field of renewable heat. The MAP includes two parts, depending on size and type of investment: Innovation grants by Federal Office of Economics and Export Control (BAFA): Mainly used by private persons for the erection of solar heating systems, biomass heating systems (pellets, wood chips and firewood) and heat pumps in existing on and two family houses. Repayment bonus on soft loans by the public sector bank KfW: The public sector bank KfW offers loans with low interest rates to support investments into renewable energy systems. The repayment bonus from the MAP sub serves the particular loan repayment of KfW loans. The KfW program is especially for commercial and municipal investors for the realization of i.e. biomass heating plants, biogas pipelines and heat storages. For example between 2008 and biogas pipelines and 783 argel heat storages have been promoted through this program. The EnEV on the other hand focuses on the increase of over all energy efficiency targets energy savings and open energy saving plant technologies. These three mechanisms are working together and completing each other. Table 5: Heat supply in 2013, feedstock, sector and technology [9] Feedstock Sector Technology Heat supply in 2013 [GWh] Solid Biomass Household Single combustion 41,240 Household Wood log central heating 14,490 Household Wood pellet heating 9,800 Industry 20,100 Heating (Power) plants 7,510 Liquid biomass Unspecified Vegetable oil 307 Industry Liquid biomass 131 Agriculture Biodiesel 1,612 Gaseous biomass Unspecified Biogas (CHP) 11,500 Unspecified Sewage gas (CHP) 1,580 Unspecified Landfill gas (CHP) 90 Biogenic share of household waste Household Heating (Power) plants 9,750 13

14 The obligation to obtain a certain proportion of heat through renewable energies of EEWärmeG, affects around 90 percent of all new erected buildings. A previous/subsequent comparison shows a much more stable market development of renewable heat technologies after the introduction of the supporting acts. The market share of renewable heat has been constantly rising since As the obligational usage of renewable heat only concern to new buildings, the installation rate is pretty low. Much stronger is the development of renewable energies in heating networks, driven through MAP and EEG. Approximately 9% of the heat in heating grids have been provided by renewable energy sources in The majority is from solid biomass or gaseous biomass in CHP-units. Generally renewable heat has to compete with fossil fuels. The decision for renewable heat technologies mainly depends on the prices of the alternative fuel. This competition has a special influence on biomass driven heat applications, where long term price trend prognoses are difficult. Since the year 2000 a total of 1.5 million renewable energy systems have been promoted.including the year 2013, biomass plants have been promoted with 321 Mio. Euro. [7] Biofuels Figure 3: Historical data for biofuels consumption 14

15 Table 6: Historical data for the share of biofuels consumption to total RES-T and total transport (in energy terms)[6] Share biofuels to total RES-T 94.2% 94.3% 93.0% 92.31% 91,2 90,5 Share biofuels to total transport 5.2% 5.5% 5.2% 5.6% 5,0% 4,9% In the beginning of the market introduction, biofuels benefited from tax exemption. The evolution of biofuels did not proceed continuously. In the years 2005 to 2007, biodiesel increased rapidly, which led to the maximum of 7.4 percent biofuel on total fuel consumption in In 2007 the biofuel quota came into force. Since then the share of biodiesel shrunk and by the same time the share of bioethanol rose. Biogas from waste, residues, cellulosic non-food material and lignocellulosic material are double counted towards the biofuel quota. Due the introduction of double counting in 2011 there has been a new sharp increase of biodiesel from used cooking oil methyl ester (UCOME). The introduction of E10 (a fuel mixture of 10% ethanol) as well led to an increase of bioethanol share. From today`s view it is not clear what will be the total amount of biofuels under the greenhouse gas reduction quota in 2015 and Cellulosic ethanol and Biomass-to-Liquid At present, different BtL-technology options are in the development or realization phase, which are suitable for industrial applications. A demonstration plant has been build and operated in 2009, producing 15,000 t/a BtL, but was closed due to insolvency of the operator. Since then no other plants have been build or are expected to be build. 15

16 BtL-fuels are expected to gain important medium and long term market importance. The potential is much higher than on biodiesel based on grain or sugar and is suitable for the usage of residual and co-products. Cellulosic ethanol technologies are available, but have not been built in a large scale. Main obstacles are high cost, i.e. for the provision of suitable enzyms. Thus, there is no industrial scale production, neither cellulosic ethanol, nor biomass-to-liquid. [8] 4.2 Bioenergy realisation in comparison to NREAP target Figure 4 shows the realisation of biofuels, bio-h&c, and bio-e, compared to NREAP targets. Figure 4: Realisation of biofuels, bio-h&c, and bio-e, compared to NREAP targets All biomass 77% Biofuels in transport 53% Biomass heating and cooling 88% Biomass electricity generation 80% [ktoe] Domestic versus imported biomass feedstock use For the heating and electricity sector different developments can be observed according to which feedstock we look at. For wood pellets there has been an almost equal import and export quantity. Wood pellets for electricity generation are exported almost in total, as there is no market for these in Germany. The export volume was around 696,000 tons in 2013 and 527,000 tons import in 2013 for heating sector only (destatis Germany). The main import countries for wood pellets are Denmark, The Netherlands and Belgium, followed by other EU countries. Only a small percentage is imported from overseas, most of that from the USA. Germany exports wood pellets to Austria, Denmark and Italy, followed by the rest of the EU. There is no significant export of wood pellets overseas. This is partly due to standardisation issues. This of course can change, nevertheless a large increase in imports from overseas is not expected currently. 16

17 For waste wood used for electricity, and to a lower extent for heat production, there is a large market for imports in Germany, due to the Renewable Energy Sources Act, which promotes this within the feed-in-tariff system. Therefore for 2012 the German Environmental Agency (Umweltbundesamt) estimates the import of waste wood at 650,000 tons. In comparison, the export of waste wood is only 25,030 tons and is sold almost exclusively to the Netherlands and Switzerland. For biodiesel we see a completely different picture with 1,214,696t exported and 747,531t imported (F.O.Licht s 2013). The imports mostly come from The Netherlands and Belgium, through the large ports there originating from Argentina and Indonesia. The large amount of biodiesel used in Germany is due to the German biofuels law, which has recently changed (see above). Figure 5 presents the historical data versus NREAP targets of the domestic and imported biofuels. Figure 5: Domestic and imported biofuels: historical data versus NREAP targets 17

18 5. Barriers to bioenergy deployment & examples of good practices 5.1 Potential barriers to bioenergy deployment In order to reduce greenhouse gas emissions by 80 to 90 % in the year 2050 in comparison to 1990 level, a fundamental change of the energy system the so called Energiewende or energy transition - is required. But, most measures that support bioenergy phase out by the year This is especially the case for the feed-in tariffs for biomass power plants. In the case of biofuels for transportation, no Germany legislation is expected as long as there is no European goal or strategy for biofuels for the time after As there are no dedicated goals for bioenergy for the time after 2020, there is high uncertainty amongst plant operators, the financial sector and potential investors. In the electricity sector a new market design is under discussion that should create the framework conditions towards an energy system with an high share of renewable energies. Within this process bioenergy s role is not yet defined. Furthermore, the feed-in tariffs end for the first biomass power plants in From today s perspective, the high operation costs of biomass power plants are not likely to be compensated by market prices for electricity in the near future. Therefore, operators are likely to stop the operation of biomass power plants from 2021 onwards, if framework conditions don t change. Due to more capacities could retire than added to the system; the total biomass power capacity could decline [10]. Cogeneration of renewable heat and power contributes significantly to the renewable`s share in the heat sector. With the EEG creating only little incentives for new combined heat and power projects, additional heat from biomass is limited to the installation of new boilers and heat plants in the future. In the past, their market deployment was mainly depending on the development of oil and natural gas prices. Germany`s mobility and fuels strategy is identifying ways in which the transport sector can contribute to the energy transition. A concept for biofuels hasn t been developed yet. The current focus of the German Government is on electromobility. It seeks to increase the number of electric vehicles to 1 million in In relation to bioenergy, the energy policy is driven by energy costs, competing uses of agricultural land and woody biomass as well as environmental concerns. And, within the political discussion social acceptance plays a crucial role. The potential to decrease the costs of bioenergy is limited as in most cases feedstock represent the lion`s share of bioenergy costs. The identification of cost reduction potentials and the communication of bioenergy s benefits towards policy and public are crucial barriers for the future deployment of bioenergy in Germany. The deployment of bioenergy has created a significant demand for different biomass categories from agriculture, forestry, garden and landscape management and municipal and industrial wastes and residues. Some of these potentials are developed completely, such as certain waste wood categories. For other biomass categories competition amongst different users and stakeholders has increased in recent years resulting in rising prices for biomass and agricultural land on the one hand side. On the other hand side competition with other users has created negative impacts on the public discussion of bioenergy. 18

19 Experience has shown that environmental standards can play an important role to increase the acceptance of bioenergy and support its development. In order to increase the acceptance for bioenergy among critical stakeholders and policy makers, additional requirements to improve the environmental performance of bioenergy are crucial. But, in the same time very strict environmental thresholds (e.g. for particulate matter of small scale boilers) and approval regulations (e.g. additional safety requirements for the storage of digestate from biogas plants) can create barriers for the deployment of new projects and the operation of existing projects. It is very much the same for norms and standards. The small- to medium-scale heating installations require feedstock of certain quality. In the past this has led to a barrier of trade e.g. for wood pellets. Pellets from overseas were not produced according to national quality requirements as a prerequisite for their use in heating installations. Recently, an internationally available standardization system called ENplus has been introduced providing a new opportunity for trade [4]. Approval process The regular approval process is normally between one to three years. Depending on the circumstances the range is very high. The legislator has set deadlines for the approval procedure and the grid entry procedure.for the approval procedure the deadline is set to 7 month, beginning at the moment all application documents were submitted.the GasNZV sets an obliged realisation roadmap in which the approval for gas grid access is limited to 18 month duration. In comparison to other European countries the average lead time duration is medium. Table 7: Average lead time duration for the permitting procedures per country [3] Country Average lead time duration Belgium Finland Germany Greece Netherlands Poland Spain Medium Long Medium Short Long Short Short Access (of bio-e, bio-h, biomethane) to the grid In Germany, plants for the generation of electricity from renewable sources shall be given priority connection to the grid. Furthermore, grid operators are obliged to give priority to electricity from renewable sources when purchasing and transmitting electricity. Moreover, those interested in feeding in electricity may demand that the grid operator expands his grid. These special provisions are set out in the Act on Granting Priority to Renewable Energy Sources (EEG) [2]. 19

20 5.2 Examples of good practices and lessons learned a) Gas grid access For biomethane to be fed into the natural gas grid, the GasNZV provides different means of support. Grid operators on all pressure levels are obliged to grant preferred grid access to plants which have applied for connection. The grid access costs are split up between the grid operator and the biomethane supplier: The former has to pay 75 % of the overall costs, the latter 25%. In order to avoid delays in the grid access process, the GasNZV includes realization roadmaps which are to be designed and agreed on by grid operator and biomethane supplier and are to be presented to the Federal Network Agency together with the grid access contract. The roadmap defines all relevant steps to realize the grid access. The grid operator is responsible for providing grid access availability of 96 %. And, he has to account for the operation expenditures, too. This supports the development of a biomethane infrastructure, minimizes the project risks and brought wide reaching experience on feed-in stations. b) Bioenergy Regions In February 2008 the Federal Ministry initiated the nationwide competition to establish regional networks in the field of bioenergy. 25 regions have qualified for BMELV funding through a two-stage selection process. Each of them receives up to 400,000 euros over the period of three years until the year Investments are not considered for funding as part of this project. The funds allow the regions to implement their regional development plan. This involves exploiting the region s bioenergy potential and capitalising on each region s particular strengths. Over this period, the regions are assisted through workshops and a scientific study. The focus of the project is the exchange of information between stakeholders. Also these regions are examples for other regions. The Bioenergy Regions project aims to contribute to the expansion of the bioenergy sector in Germany and to promote development in rural areas. The competition mobilises existing resources in order to add value within the regions and create new jobs. Concrete objectives are: To build and expand networks that can develop and implement innovative ideas for bioenergy production and use To remove or alleviate conflicts of interest Knowledge transfer To establish communicating structures. The aim of the prolonged project period is to consolidate sustainable structures of the current bioenergy-regions as well as ensuring a transfer of experience and knowledge gained to other regions. Additionally, in this coming project period the coordinators would like to make this project known to other European countries. More information is available under following website: c) Energy and Climate Fund 20

21 From the fund "Energy and Climate Fund" (EKF. See Law establishing an Investment Fund "Energy and Climate Fund" of 8 December 2010) in the year million euros have been put aside for research and development in the bioenergy area. From May 2015 valid priorities for EKF projects in the bioenergy area: Provision and development of technologies and systems for bioenergy production and use, with the aim of further improvement of greenhouse gas balances in the main application areas electricity, heat and fuels Optimize the integration of bioenergy in regional and national energy (infrastructure) systems (heat, power, mobility) with the aim of improving the system's stability and energy efficiency d) The Market Incentive Programme (MAP) The market incentive programme supports the deployment of innovative, efficient and low emission biomass heating applications. About 365,000 biomass heating applications have been supported since its introduction in the year Two important success factors are a very simple support mechanism and an approval process that is very fast. e) Greenhouse gas reduction (GHG) quota The change from a biofuel quota in terms of energy to a quota obligation that is based on the reduction of greenhouse gases was determined long before it s introduction in The evaluation of the first quarter of 2015 shows that the average GHG emission reduction of all biofuels for transportation is about 60%. In comparison to last year s average GHG emission reduction this means an improvement for all biofuels that were registered this year. This mechanism started a process of improving the production and provision of biofuels in terms of GHG emissions and efficiency. Table 8 History of biomass policy development in Germany [Baseline Germany Report] Sector Duration Policy/ financial Delivery Total value/ Number of period incentive mechanism Value for biomass project biomass/bioe nergy/ biofuel applications approved Climate ongoing Climate 2008 ongoing Energy 2000 ongoing BImschG (biofuel quota) International Climate Initiative (IKI) Renewable Energy Sources Act (EEG) Obligation 3,530 Mio. 5,600,000 t/a (Capacity) Promotion 1,450 Mio No information 411 Feed Tariff In 4,967 Mio. in ,099 projects, therefrom: Number of projects implemented no information Energy 2012 ongoing Energy ongoing Energy 2009 ongoing Energy 2009 ongoing Market Premium (EEG) Flexibility Premium (EEG) Market Incentive Programme (MAP) Market Incentive Programme (MAP) Premium Additional premium Investmen t grant loan 971 Mio. in Mio. in Mio. in ,700 gaseous 640 solid 1,027 liquid 500 biomethane 5,000 pellet stoves 1383 pellet boiler wood logs 7338 wood chips 836 Solid biomass plants 448 Biogas upgrading 72,172 installations (all renewable technologies) 21

22 Energy ongoing Energy ongoing Energy ongoing Renewable Energies Heat Act (EEWärmeG) KfW Renewable Energy Programme Premium Gas Network Access Regulation Transport Energy Tax Act ongoing (EnergieStG) Innovation National Research 2016 Strategy bioeconomy 2030 Innovation xxx Funding programme for renewable raw materials plant 1 Biogas micro grid 159 Obligation 6,300(in 2011) 108,592 in 2011 (all renewable technologies) Loan 4,700 Mio ,677 Euro (complete RE program in 2013) Support 131 Mio. in (avoided gas grid tariffs,) Tax Mio. 5,614,345 m³ derogation in ,244 MWh Promotion 2.4 Billion Euro Promotion 61 Million Euro 22

23 6. Selected value chains Perennial crops, straw and organic waste are selected as priority feedstocks by DENA and FNR (see Table 9). The selection of these feedstocks is based on the size of unused potentials, taking into account competing uses and chances for mobilization. Further details of the value chain selection process can be found in D2.4 (SWOT analysis of biomass value chains). Table 10 presents the amount of utilisation and the respective share when compared with the technical potential calculated in WP2 (see D2.3). These figures are the results of the reference scenario run conducted by the ECN Resolve model 2. The reference scenario is based on the most recent Energy Roadmap 2050-Primes reference scenario. In this scenario we consider the (up-dated) NREAP targets by 2020 and the existing EU Member States policy measures related to bioenergy. Table 9: Selected value chains for Germany Feedstocks as focus Selected value chain Motivation Perennial crops Straw Organic waste Responsible for selection: DENA & FNR Combustion (heat driven): - small scale heating (household level) - medium scale heat driven (apartment building, district heating, public buildings) - medium scale CHP (residential district or industry; heat driven) Combustion (heat driven): - household level (pellets) - in CHP: district heating, public buildings Separately collected organic waste: - Anaerobic digestion (medium scale) & local CHP - Anaerobic digestion (medium scale) & upgrading to SNG - Production of chemical building blocks (e.g. bio-naphta, biomethane) There is a large potential of perennial crops that could increase biodiversity on agricultural land on the one hand; on the other hand, tapping additional national wood resources could mitigate the competition between energetic and material uses of woody biomass. Straw has a large unused potential that can be tapped economically and sustainably. As a residue it is one of the resources which is in the focus of the German renewable energy policy at the moment. German Recycling and Waste Act (KrWG) stipulates biological wastes to be collected separately by 1 st January This rule increases the amount of technical and economical viable bio- wastes which can be utilized for combined composting and digestion. Table 10: Detailed modelling results of the selected value chains, primary feedstock consumption for energy purposes, and their comparison to the total potential 2 RESolve-biomass determines the least-cost configuration of the entire bioenergy production chain through minimal additional generation cost1 allocation, given demand projections for biofuels, bioelectricity and bioheat, biomass potentials and technological progress. 23

24 Year Selected value chains Perennials (PJ) zero zero as share of total perennials potential (%) zero zero Straw (PJ) as share of total straw potential (%) Organic Waste (PJ)* as share of total organic waste potential(%) *Organic waste category includes collected Vegetable fruit and garden waste, common sludge, food and beverage, organic industry waste, landfill, MSW, paper cardboard, post-consumer wood, used fats/oils. 6.1 Policies dedicated to the value chains Perennials For biomass power plants that were put into operation between 2009 and 2012 the EEG provides an bonus on the feed-in tariff for the utilization of material from landscape management. So far, the bonus had only little impact on the development of perennials. Most farmers are used to react to market developments on a yearly basis. For them, perennials means a commitment to one crop for a couple of years. The programme Gemeinschaftsaufgabe Agrarstruktur und Küstenschutz seeks to provide farmers with financial support for the cultivation of short rotation coppices. The measure is applied in some federal states and is limited to the period It is required that at least 3000 trees are planted per hectare and that the land under cultivation is not dedicated to other crops for a period of 12 years Straw Germany is a large producer of agricultural commodities resulting in a significant potential of straw. But, to date there is only little use of it for energy. This is due to economic reasons, as production costs of conversion technologies for heat, power and fuel for transportation are all higher than the production costs of reference technologies [11]. The support mechanisms in force aren t sufficient to create economic viable concepts for straw as feedstock. Starw as feedstock for the production of lignocellulose ethanol biofuels can be counted towards quota obligations and benefit from an energy tax relief. Another support mechanism is the EEG. Biomass power plants that were put into operation between 2009 and 2014 can receive a bonus for the power production from straw. The utilization of straw in boilers smaller than 100kW benefit from emission thresholds that are higher than for biomass feedstock. In contrast to that the requirements for the utilization of straw in boilers larger than 100kW are very strict Organic Wastes The Legislation on the advancement of the recycling economy and securing environmental friendly waste disposal (Kreislaufwirtschaftsgesetz-KrWG) transforms the guidelines of the Directive 2008/98/EC into national law. The Legislation aligns the term of waste with the European term and expands it. It describes the waste hierarchy and the separate collection of waste. See The EEG supports the anaerobic digestion from organic wastes by means of higher feed-in tariffs. To be eligible for the bonus, the biogas has to be produced by a minimum of 90 percent biodegradable waste within the period of one year. 24