Is forest sequestration at the expense of bioenergy and forest products costeffective in EU climate policy to 2050?

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1 WORKING PAPER 11/2013 Is fores sequesraon a he expense of boenergy and fores producs coseffecve n EU clmae polcy o 2050? Mram Münnch Vass a *, Kaarna Elofsson a a Deparmen of Economcs, Swedsh Unversy of Agrculural Scences, Box 7013, Uppsala, Sweden. * Correspondng auhor. Tel.: Fax: E-mal: mram.munnch.vass@slu.se Sverges lanbruksunverse, Insuonen för ekonom Workng Paper Seres 2013:09 Swedsh Unversy of Agrculural Scences, Deparmen of Economcs Uppsala 2013 ISSN ISRN SLU-EKON-WPS-1309-SE Correspondng auhor: mram.munnch.vass@slu.se

2 Absrac Fores managemen affecs he quany of CO 2 emssons n he amosphere by carbon sequesraon n sandng bomass, carbon sorage n fores producs and producon of boenergy ha replace fossl fuels. The man queson n hs paper s wheher fores sequesraon s worh ncreasng a he expense of boenergy and fores producs o acheve EU s emsson reducon arge o 2050 cos-effecvely. The assessmen s based on numercal calculaons usng a dynamc, paral equlbrum model of coseffecve soluons, where hree abaemen mehods n he fores secor are ncluded ogeher wh abaemen n he fossl fuel secor. The resuls show ha fores sequesraon n sandng bomass s cos-effecve compared o boenergy. When sequesraon s aken no accoun, ne presen coss for meeng EU carbon arges can be reduced by 18%. Ths s acheved hrough an ncrease n annual carbon sequesraon by mllon on CO 2. The overall cos of reachng he 80 per cen carbon reducon arge amouns o 2,002 bllon Euros when sequesraon s ncluded n he polcy, bu ncreases o 2,371 bllon Euros whou sequesraon. Resuls sugges ha foress can serve as a cos-effcen carbon snk over he consdered me perod. Key words: boenergy, cos-effecveness, dynamc paral equlbrum, EU clmae polcy, fores carbon sequesraon 2

3 1. Inroducon Foress are mporan n a clmae perspecve snce carbon can be sequesered n sandng bomass, or sored n fores producs. Alernavely fores can produce boenergy ha can replace fossl fuels. In a cos-effecve clmae polcy, s, hence, mporan o recognze he abaemen poenals n foress. Several sudes show ha sequesraon accoun for per cen of emsson reducons globally n a coseffecve clmae polcy (Bose e al., 2009; Murray e al., 2009; Sohngen, Despe he hgh poenal and relavely low cos of sequesraon, has only parally been ncluded n nernaonal clmae agreemens such as he Kyoo Proocol. EU s clmae polcy framework does no recognze emsson reducons n he fores secor, apar from boenergy. The man reasons are lack of approprae and harmonzed daa due o measurng and monorng problems as well as non-harmonzed reporng mehods across EU counres (European Commsson, 2012a. However, fores sequesraon s ofen vewed as a more effecve mehod o reduce emssons han boenergy (e.g. Holsmark, 2012; Hudburg e al., 2011; Johnson, 2009; Schulze e al., The man reason s ha boenergy s no necessarly carbon neural n he shorerm, albe hs s somemes argued o be he case (Brgh and Sromman, 2009; European Unon, 2003; Peersen and Solberg, 2005; Sjole e al There are wo explanaons for he lack of carbon neuraly: ( a long me-lag appears beween 3

4 bomass combuson, when emssons are emed o he amosphere, and fores regrowh, when emssons are sequesered; and ( a subsanal amoun of carbon s emed o he amosphere from harvesng, ransporng and processng. As long as fores sequesraon and boenergy are no reaed n a cos-effcen manner n EU clmae polcy, here s a rsk ha European foress become a carbon emsson source raher han a snk n he fuure (Böcher e al., The European Commsson (2012a,b has acknowledged he mporance of fores sequesraon and has pu forward hree possble sraeges o nclude he land use secors n EU clmae polcy: ( ncluson n he EU Emsson Tradng Scheme (ETS, ( ncluson n he non-radng secor, whch covers mos secors no n he ETS, or ( hrough a new and separae arge and commmen. Wh a long-erm perspecve, he European Commsson (2011 has proposed a roadmap for movng o a compeve, low carbon economy n Ths roadmap proposes reducons of greenhouse gases n he range of per cen by 2050 compared o he level n The roadmap focuses on achevng hs arge range cos-effecvely, mplyng ha low cos abaemen opons such as fores sequesraon could be acceped and cos-effecve polcy nsrumens could connue o domnae. The man purpose of hs sudy s o assess wheher s worh ncreasng he amoun of fores sequesraon a he expense of boenergy and fores producs o cos-effecvely acheve he EU carbon emsson reducon arge o Fores sequesraon n 4

5 sandng bomass, fores producs and boenergy are closely conneced n physcal erms, and her mpacs on carbon release and upake dffer. The deploymen of one of hese abaemen mehods means an equvalen change n one or boh of he oher wo. For he assessmen, a dynamc paral equlbrum model s used n whch abaemen coss are mnmzed subjec o he achevemen of an 80 per cen reducon n CO 2 emssons by 2050, compared o he level n Abaemen n he fossl fuel secor s also par of he model. The benef of usng a dynamc model s ha akes several years no accoun, whch means ha he non-lnear naural growh of foress can be accommodaed for. The analyss only consders he addonal sequesraon, whch s here defned as he addonal amoun of sequesraon acheved when fores harvess are reduced compared o curren levels. Our modelng approach s relaed o prevous work n he feld of cos-effecve abaemen sraeges o reduce greenhouse gas emssons n he land use secors and our emprcal applcaon s relaed o he choce beween abaemen mehods n he fores secor. When modelng cos-effecve abaemen sraeges, many sudes ake a sac perspecve (e.g. Dxon e al., 2008; Elasch, 2008; Gren e al., 2012, whle Van der Werf and Peerson (2009 hghlgh he mporance of coverng several decades o accommodae for he dynamc effecs, snce fores bomass follow a non-lnear growh pah a he sand level. Exsng dynamc opmzaon models, coverng dfferen geographc areas a dfferen levels of aggregaon are found n Adams e al. (1996, 5

6 1999; Alg e al. (1997; Gelen e al. (2002; Lee e al. (2005; Rokyansky e al. (2007; Sahaye e al. (2005; Schneder e al. (2008; Sohngen and Mendelsohn (2003; Tavon e al. (2007; Van Kooen (1999; Van Veld and Planga (2004. These models ncorporae fores sequesraon by means of a non-lnear fores bomass growh funcon, whch vary n shape beween models due o dfferences n funconal form e.g. exponenal, quadrac, ec. and accompanyng parameer values. In hs maer, our model follows van Kooen (1999 by usng a specfc exponenal funcon for bomass growh ha reflecs naural growh. A any pon n me, he level of sequesraon n foress depends on he fores bomass growh and endogenously deermned harvess.e. harvess are quanfed whn he model. Ths harves specfcaon follows mos of he models above, apar from Gelen e al. (2002 and Sahaye e al. (2005, whch do no provde any deals regardng harves. Our specfcaon of abaemen coss follows Adams e al. (1996, 1999 and Alg e al. (1997, who calculaed abaemen coss as reducons n consumer and producer surplus n he agrculure and foresry markes. However, we only nclude he markes for some specfc foresry producs. Abaemen n he fossl fuel secor s also possble n he models by Sohngen and Mendelsohn (2003, Tavon e al. (2007 and Van Veld and Planga (2004. We follow hs ncluson, bu ncorporae fossl fuels drecly no our model nsead of lnkng-he land use secor model o some negraed assessmen model. 6

7 In our emprcal applcaon, we sudy he choce beween boenergy and sequesraon n fores bomass or sorage n fores producs. Ths choce have prevously been addressed by Gelen e al. (2002; Hedenus and Azar (2009 and Schneder and McCarl (2003 wh dvergng conclusons, whch are descrbed n he dscusson n secon 5. In ha perspecve, s presenly unclear how European fores resources should be used cos-effecvely o conrbue o carbon emsson reducons. We herefore am o add o he leraure by modellng he choce beween dfferen fores abaemen mehods n Europe, where each counry has a unque fores bomass volume funcon and where abaemen opons n he fossl fuel secor s also possble under he condon of coseffecveness. As far as we are aware, no prevous models have ncorporaed hese aspecs ogeher. Our calculaons show ha he abaemen cos can be reduced by recognzng addonal sequesraon as an abaemen mehod n EU clmae polcy. Ths cos reducon s explaned by he sequesraon poenal n boh foress and fores producs and a comparavely low cos of reducng boenergy producon n favour of sequesraon. The level of addonal sequesraon s however que small, whch means ha large reducons mus be made n he fossl fuel secor as well. The resuls also show ha addonal sequesraon ncreases unl 2048 and hen falls slowly, meanng ha he sauraon level where sequesraon s nl or negave s never reached durng he suded perod. 7

8 The paper s organzed as follows. Secon 2 heorecally descrbes he dynamc paral equlbrum model used o analyse he conrbuon of sequesraon o EU s clmae change polcy and secon 3 presens he emprcal model and he assocaed npu daa. The resuls are presened and analysed n secon 4, followed by dscussons and conclusons n secon Mehod Cos-effecve soluons o reach he CO 2 emsson reducon arges are calculaed based on a non-lnear, dynamc programmng model. I s assumed ha he ulmae objecve of he EU polcy maker s o acheve he emsson arge unl 2050 a mnmum cos. Four abaemen sraeges are avalable: 1 carbon sequesraon n sandng bomass; 2 ncremenal carbon sorage n fores producs; 3 boenergy; and 4 reducon n fossl fuel consumpon. Sequesraon s acheved hrough reduced harvess. The model covers 27 EU member saes and has fve endogenous decson varables: he level of fores producs, boenergy, coal, ol and gas. 2.1 The model The amoun of fores sequesraon s deermned by he sandng bomass volume, V, n counry,, wh =1 z, a me,, wh = 1.T years. Sandng bomass volume n he 8

9 nex year, V 1, s deermned by he volume n he prevous year, s growh, G ( V, and harves, H, a he end of he prevous year, as follows: V 1 V G ( V H (1 V0 V where, V, s he acual sandng bomass volume n each counry n he frs year. Growh n sandng bomass volume, G ( V, s a connuous, concave funcon n Sandng bomass volume, s growh and harves are all measured n cubc meers per hecare (m 3 /ha. By mulplyng he harves level wh he oal fores area, V. A, measured n ha, we ge he oal harvesed volume n m 3 per counry and year. The harvesed volume s used for producon of eher boenergy, B, or fores producs, F : A H B F (2 Fores producs nclude all producs made of wood, excep boenergy. Boenergy and fores producs are boh measured n m 3. Whou CO 2 emsson reducon arges, s assumed ha he producon level of boenergy and fores producs are consan over me. 9

10 Fores sequesraon, S, measured n on CO 2 removed from he amosphere, s calculaed as he dfference n sandng bomass volumes beween years. Ths dfference s mulpled wh he area and he converson parameer,, whch ranslaes bomass volumes no CO 2 emssons: S A ( V 1 V (3 I s assumed ha fores producs have he same carbon conen per cubc meer as sandng fores. Fores producs, such as houses and furnure, can sore carbon for a very long me, and we herefore assume ha consue a permanen carbon snk as s done n Adams e al. (1993. Emssons of CO 2 o he amosphere sem from consumpon of fossl fuels and producon of boenergy. Fossl fuel emssons sem from he combuson of fuels and are deermned by he quanes consumed, j X, by fossl fuel ype, j, wh j=1 w. Fossl fuels are measured n on ol equvalens (oe. Boenergy emssons sem from harves, ranspor, processng and combuson of boenergy and are deermned by he quanes produced. Boenergy s assumed o replace fossl fuels. Hence, he quany of boenergy produced s frs subraced from he quany of fossl fuels consumed, gven ha also boenergy s convered o oe by a parameer,. Emssons o he amosphere are hen calculaed by converng he ne quany of fossl fuels no j emssons, measured n on CO 2, by he converson facors,. Secondly, emssons 10

11 from boenergy are added o he ne emsson equaon. The parameer,, s used o calculae ne CO 2 emssons, n on per m 3, emed o he amosphere when foress are harvesed, ranspored, processed and burn. Toal ne emssons o he amosphere mus be lower or equal o he emsson arge, MAX E, each year. These yearly arges are deermned by EU clmae polcy o 2050 regardng he maxmum amoun of emssons o he amosphere: E j j ( ( X B B F S j E (4 MAX j X B F S where E / 0, E / 0, E / 0 and E / 0 The abaemen cos ncurred by fores owners for reducon n boenergy and fores B producs s denoed, ( ˆ F C B B, and, ( ˆ C F F, respecvely, where B and he Busness As Usual (BAU levels, assumed consan over he me perod consdered. These reducons wll lead o an ncreased level of sequesraon n foress. F are The cos funcons are boh assumed o be connuous, decreasng and convex n B and F, respecvely. The abaemen cos relaed o fossl fuel reducons s denoed, j ( ˆ j j C X X, where j X s he BAU levels, assumed consan over he me perod consdered. Ths cos funcon s assumed o be connuous, decreasng and convex n j X. 11

12 The decson problem of he polcy maker under he EU 2050 scenaro s hen formulaed as he mnmzaon of oal abaemen coss n presen value erms: Mn j B, F X TC B F j j j C ( Bˆ B C ( Fˆ F C ( Xˆ X (5 j subjec o (1-(4 and ˆ B B,, 0 ˆ F F,, 0 ˆ j j X X,, j, 0 where 1 s he dscoun facor and,, s he dscoun rae. The condons (1 mply ha boenergy, fores producs and fossl fuels mus be posve and no ncrease beyond he BAU level. In order o solve he decson problem defned by (1-(5, assumng an neror soluon, he Lagrangan for dscree me s se up: 12

13 13 ( ( ( ( ˆ ( ˆ ( ˆ ( 1 1 MAX j j j j j j j F B E S F B B X V H V G V X X C F F C B B C L (6 Equaons (1-(5 defne a non-convex opmzaon problem. The cos-effecve allocaon of emsson reducons can be deermned from he soluon o (5. We derve he necessary frs order condons for cos mnmzaon (Appendx A shows he sepwse dervaon, whch gve he opmal allocaon of B, F, j X and V : 0 ( 1 ˆ ( 1 j j B A B B B C B L (7 0 1 ˆ ( 1 F A F F F C F L (8 0 ˆ ( j j j j j j X X X C X L (9

14 L V G 1( 1 A ( 1 0 (10 V where and are he Lagrange mulplers, where he frs s posve and he 1 second negave. These mulplers are he shadow prces for he sock of sandng bomass volume and he emsson reducon arge, respecvely. In a cos mnmzaon problem, a posve 1 means ha a un ncrease n he sock of sandng bomass volume would reduce he objecve value, he oal abaemen cos n opmum, wh ha amoun and vce versa. A negave means ha an un ncrease n he emsson arge would decrease he objecve value wh ha amoun n opmum and vce versa. The shadow prce for he emsson arge can be used o llusrae cos-effecve desgn of economc nsrumens snce s equal o he effcen carbon ax, or, equvalenly, he allowance prce under a cap-and-rade sysem. Equaon (7 and (8 can be rewren n erms of margnal cos of a un reducon n boenergy and fores producs n perod,, respecvely: ˆ B C ( B B j 1 ( 1 (11 B j A 14

15 ˆ F C ( F F 1 1 F A (12 Cos-effcen producon of boenergy and fores producs are hus deermned by he shadow prce for he emsson reducon arge and he dscouned shadow prce n he nex perod of no harvesng an addonal un oday, mulpled by her respecve mpacs. The mpacs n he frs erms on he rgh-hand sde of (11, j, and j (12,, are he ne emssons per un of boenergy and he ncremenal carbon sored per un of fores producs, respecvely. The effecs n he second erms of (11 and 1 (12,, mply ha he nex perod s shadow prce of no harvesng an addonal un A oday s dvded by he fores area, A. Equaon (9 can be rewren n erms of margnal cos of an addonal un of fossl fuel reducon n perod, : ˆ j j j C ( X X X j j (13 The margnal cos s deermned by he Lagrange mulpler of he emsson reducon arge, j and he mpac,, on hs arge from a margnal reducon n fossl fuel consumpon, whch s deermned by he carbon conen of fossl fuels. 15

16 Condons (11 o (13 show ha he margnal cos dffers across abaemen mehods. Condon (10 can be rewren and show dynamc effecveness: G A 1 ( 1 1 A (14 V The lef-hand sde of (14 shows he shadow prces of sandng bomass volume and he emsson arge, respecvely. The rgh-hand sde of (14 shows he dscouned shadow prce of he nex perod s sandng bomass volume and he emsson arge, respecvely. Here he change n bomass volume growh from a margnal change n bomass volume, G V, s aken no accoun. When condon (14 holds we have found he opmal managemen of foress and here s no room for ne cos savngs by reallocang abaemen beween years, snce he margnal cos of achevng he arge s equal across me, as expressed n presen value erms. Everyhng else equal, a larger mpac on emssons mples hgher use of an abaemen measure. Wh regards o fores resources, hs means ha f we ake a sac vew on he problem, sequesraon n foress should no be ncreased a he expense of fores producs, snce ha carres a cos, and boh have he same clmae mpac. However, due o he dynamcs n fores sequesraon can poenally be worh ncreasng sequesraon a he expense of fores producs, provded ha hs ncreases fuure 16

17 fores growh. Hence, can be cos-effecve o ncrease sequesraon n foress hrough cosly reducons n boh boenergy and fores producs. 3. Emprcal model and daa The emprcal model s bul n he GAMS sofware, usng he CONOPT3 solver for all calculaons (Brooke e al., The model s dvded no yearly me perods, sarng n 2010 and endng n 2050, where all coss are dscouned wh a hree per cen annual dscoun rae. The leraure regardng he choce of dscoun rae n he feld of economcs of clmae change s vas and he ssue has been debaed nensvely followng he Sern revew (Sern, 2008 by e.g. Dasgupa, (2008; and Wezman, (2007, From hs debae s possble o argue for boh a hgh and a low dscoun rae, whch may also vary beween counres. We hus make a smplfcaon here by usng a unform, consan dscoun rae for all counres. 3.1 Abaemen n he fores secor The fores secor s resrced o he carbon pools of sandng bomass volume, fores producs and boenergy n each counry. There s no dsncon beween ree speces due o lack of daa. The calculaon of sandng bomass volume, V, s based on he so called Chapman-Rchard (C-R funcon (Bjornsad and Skonhof, 2002; Van Kooen, 17

18 1999, whch s an exponenal, s-shaped funcon ha measures cumulave sandng bomass volume n m 3 /ha over he age, y, of he fores, as follows: V ( y 0 V ( y 0 k ( y V( y m e n y (15 where, k, m, and n, are posve parameers ha are counry specfc and deermned by ree speces, sol ferly, emperaure and fores managemen. We assume ha hs funcon can be appled o he average-aged fores sand n he dfferen counres. Parameers have been calbraed for each counry based on Bjornsad s and Skonhof s (2002 esmaed C-R funcon for Norwegan spruce, grown n unmanaged foress.e. non-harvesed. These esmaes are used because ha would avod double counng of harvess n our model. For he calbraon, we use he average sandng bomass volume per hecare and assocaed average fores age n We also assume ha sandng bomass volume n all counres has he same maxmum volume as n (Bjornsad and Skonhof, 2002, 849 m3/ha, bu ha hey can reach hs a dfferen age of he average sand. A comparson wh esmaes n Chrsensen e al. (2005, shows ha our assumpon of a maxmum volume of 849 m3/ha s whn he range found n beech reserves n Belgum, Czech Republc, Germany, Slovaka and Slovena ha have a lvng wood volume beween 772 and 876 m 3 /ha. The parameers k and n are calbraed for he funcons 18

19 o f hese daa. The annual ncremen per hecare n 2010 (Eurosa, 2011 s used o evaluae he fed C-R funcons, and hs comparson shows ha reasonable esmaes of annual growh are obaned. The growh n sandng bomass volumes are also whn reasonable lms of hose repored n Nabuurs and Loubmov (2000. Ther maxmum ne annual ncremen for spruce s approxmaely 7 m 3 /ha per year, a an age of 95. Our esmaes are varyng beween 6 and 13 m 3 /ha for ages years, wh mos counres a he lower end of hs range. The 27 ndvdual C-R funcons so obaned reflec ha foress generally grow faser n emperae han boreal foress, whch s suppored by he leraure (e.g. Holsmark, 2012; McKechne e al., The average age, sandng bomass volume, fores area, real ncremen and calbraed ncremen n 2010 can be found n Appendx C, Table C1. The calbraed C-R parameers are found n Table C2. Due o he large nfluence of age and volume on he shape of he growh funcons, sensvy analyss s carred ou n he resuls secon. The growh, G ( V, n sandng bomass volume s calculaed by akng he dervave of he volume funcon wh respec o age: G ( V V ( y V ( y m n V ( y (16 y y 19

20 The average age of he fores s varyng over me due o fores growh and harvess and s calculaed from (15. The ncrease beween consecuve years n sandng bomass volume s convered o CO 2 -sequesraon, by he parameer,, for whch daa s obaned from IPCC, (2006, see Appendx B. Boenergy n he form of fuel wood, pelles and wood chps, are ofen used for space heang and power generaon n Europe and hence replace fossl fuels. Followng, e.g., Holsmark (2012, Krchbaum (2002 and Van Kooen (1999, we assume ha boenergy wll replace coal n Combned Hea and Power (CHP plans, snce coal has he hghes carbon conen, whch mples ha such replacemen reduces emssons he mos. The calculaon of ne emssons from boenergy s based on he subsuon for fossl fuels as well as emssons semmng from harvesng, ransporng, processng and burnng boenergy (Peersen, 2006; Holsmark, 2012, as s explaned n Appendx B. 3.2 Cos funcons for reducng boenergy and fores producs The cos of reducng he producon of boenergy and fores producs, for he benef of ncreased fores sequesraon, s defned as reducons n producer surplus from foregone sales of hese producs on her respecve markes. The producer surplus s he area above he nverse supply funcon, bounded by he observed marke prce of 20

21 he produc. The nverse supply funcons of boenergy and fores producs are calculaed n a smlar manner; hence we only show he calculaon for boenergy n Appendx A. Resrcons are mposed on boenergy and fores produc producon, whch mply ha hey mus be posve and lower/equal o he 2010 BAU level. The sum n volume, of boenergy and fores producs s equvalen o oal harves volumes, daa can be found n Appendx C, Table C3. I s assumed ha he prces of boenergy and fores producs are he same each me perod and ha he producers are prce akers on he markes for hese producs. Mos counres do no provde prces, herefore s assumed ha he prce of fores producs and boenergy n all counres amoun o 43 /m 3 and 39 /m 3, respecvely, whch are he average Swedsh prces n 2010 (Swedsh Fores Agency, Supply elasces for boenergy and fores producs have no been esmaed n all EU counres. However, here are esmaes for fuel wood, sawn wood and pulp wood producs n Sweden, where sawn wood has an elascy of 0.28, pulp wood 0.14 and fuel wood 0.55 (Gejer e al., Some prevous sudes (Buongorno e al., 2003; Laur e al., 2012; Solberg e al., 2003 assumed ha he elascy s he same n all European counres. We assume ha he supply elasces n EU counres are he same as n Sweden and use 0.55 for boenergy and 0.21 for fores producs, he average of sawn wood and pulp wood. 21

22 3.3 Cos funcons for reducng fossl fuels Coss of fossl fuel reducons are calculaed as he coss of foregone consumpon of fossl fuel producs, whch s defned as decreases n consumer surplus of hese producs. Decreases n consumer surplus are derved from nverse fossl fuel demand funcons for hree man classes of fossl fuel producs; ol, coal and naural gas. Inverse demand funcons are calculaed n a correspondng manner as he nverse supply funcons, Appendx A. I s assumed ha he EU s a prce aker on he world marke of fossl fuels and canno nfluence prces. Resrcons are mposed n erms of an upper bound, equal o curren consumpon, and a lower bound equal o zero. Quanes of fossl fuels consumed are from Eurosa daabase (Eurosa, 2013b for he year Prces of ol are for he year 2006 and are he average of dfferen ol producs calculaed n Gren e al. (2009. The prces of naural gas are for 2010 and are obaned from Eurosa s daabase (Eurosa, 2013c. Daa on he prce of coal producs are no avalable n offcal sascs, and have herefore been obaned from Gren e al. (2009. The prce used n he model s he average prce of seam coal and hard coal coke of 62.5 /oe. All numbers for quanes and prces used n he model can be found n Appendx D, Tables D1 and D2. The elasces for ol, coal and gas are from Holsmark and Maesad, (2002 and found n Appendx D, Table D3. 22

23 3.4 Emsson arges Toal model emssons from fossl fuel combuson n Europe are calculaed o approxmaely 4.0 bllon on CO 2 n 2010, based on he amoun of fossl fuel consumed and her converson facors from oe o on CO 2. Ths s close o he real amoun of 4.7 bllon on CO 2 (Eurosa, The dfference can be due o so called process emssons ha occur when processng ceran raw maerals. The calculaon of he requred emsson reducon arge for he year 2050 s based on an 80 per cen reducon of emssons from he real 1990-level. Inermedae arges, equal percenage reducon each year, are calculaed based on a sepwse reducon from real emssons n 2010 o he arge level n The requred reducon n emssons, each year, hen becomes approxmaely 3.5 per cen and s used n he wo scenaros analysed 1. In order o only consder addonal sequesraon n he model, he BAU sequesraon n fores and ncremenal carbon sorage n fores producs are deduced from he oal amoun of sequesraon. The reason for only deducng sequesraon and no emssons from boenergy, s due o he fac ha sequesraon s currenly no par of EU polcy, whereas boenergy s. If carbon sequesraon wll be ncluded n he polcy n he fuure, only he addonal amoun should be accouned for. The reason s ha he BAU sequesraon would happen whou any ncenves o fores producers and can hereby be vewed as a free abaemen resource, whle he 23

24 addonal sequesraon occur a he expense of eher boenergy or fores producs when sequesraon s recognzed as an abaemen mehod. 4. Resuls of cos-effecve soluons Two scenaros for achevng he EU 2050 emsson reducon arge cos-effecvely are examned: wh and whou addonal sequesraon. The scenaro wh sequesraon ncludes four abaemen opons; carbon sequesraon n foress, ncremenal carbon sorage n fores producs, boenergy and reducons n fossl fuel consumpon. The scenaro whou sequesraon only ncludes reducons n fossl fuels. The developmen of sequesraon n foress and sorage n fores producs are shown n Fgure 1 as oal sequesraon and BAU sequesraon. The dfference beween he wo lnes s he addonal sequesraon. We noe ha boh lnes are ncreasng over me and ha he dfference beween hem s raher low, n he range of mllon on CO 2 per year, whch corresponds o a maxmum of 4.9 per cen of he oal emsson reducons o be acheved o

25 Mllon on CO2 removed per year Toal sequesraon BAU sequesraon Fgure 1. Developmen of cos-effcen oal and Busness as Usual sequesraon n foress and fores producs n mllon on CO 2 removed from he amosphere per year Ths means ha a large amoun of emsson reducon mus come from expensve reducons n fossl fuels. In he las wo years, he addonal sequesraon s fallng. Ths s due o he fac ha he ageng European fores has reached s growh peak, where s unable o sequeser an ncreasng amoun of carbon. Thus, beyond he consdered polcy perod, here may be lmed scope for furher ncreases n sequesraon. 25

26 The addonal sequesraon s largely occurrng a he expense of boenergy, whch s shown on he rgh axs n Fgure 2. The level of boenergy s fallng dramacally n he begnnng when he level of sequesraon s ncreasng rapdly. Then s fallng more slowly unl 2023 when coal s phased ou. In 2025 boenergy s also compleely phased ou. The developmen of fossl fuel consumpon s also shown n Fgure 2, n he scenaro wh sequesraon. Mllon oe Ol Coal Gas Boenergy Mllon m3 Fgure 2. Developmen of fossl fuels and boenergy 26

27 Ol s reduced he mos n absolue erms, followed by naural gas and coal. When coal s phased ou, more expensve abaemen mehods, per un emsson reducon, mus be used. Gas, ol and boenergy herefore experence a seeper fall when here are no more coal abaemen opporunes. The developmens n Fgure 1 and 2 lead o an overall abaemen cos of 2,002 bllon Euros when reducng emssons by 80 per cen o 2050 n he EU, wh nermedae arges every year. If sequesraon s no recognzed as an abaemen mehod, he cos of achevng he arge s ncreased o 2,371 bllon Euros. Hence, here s a cos savng of approxmaely 18 per cen when recognzng addonal sequesraon. Fgure 3 shows oal dscouned abaemen cos, summed over all EU counres, of achevng he emsson arge every year. In boh scenaros, he cos s frs ncreasng slowly and hen more rapdly from 2025, as he emsson arge becomes successvely more srngen. Towards he end of he me perod, he cos s ncreasng a a decreasng rae, due o he fac ha coss are dscouned. The dfference beween he wo scenaros s no large. In he scenaro wh sequesraon, he cos s slghly hgher n he begnnng, bu hen becomes lower afer 2022 compared o he scenaro whou sequesraon. 27

28 Bllon Euros Wh sequesraon Whou sequesraon Fgure 3. Toal dscouned abaemen cos of all European counres The explanaon for he hgher cos n he scenaro wh sequesraon n he begnnng s ha boenergy and fores producs are reduced no only n order o sequeser carbon n he same year bu also o ncrease he fuure sequesraon, as for several counres a hgher bomass volume mples more rapd growh. The annual coss n he scenaro whou sequesraon can be compared o esmaes n Capros e al. (2012. They calculaed average annual cos n o be bllon, dependng on he scenaro. Ther emsson reducon arge s he same as 28

29 n hs sudy. These coss are n lne wh our oal abaemen cos o 2050 raher han he annual coss. The reason for hs large dscrepancy s explaned by a leas wo facors: 1 energy demand n her model s deermned exogenously, mplyng ha he demand mus be me by comparavely expensve energes. We, however, allow demand o be deermned endogenously, whch means ha can be reduced o nl f ha s cos-effcen; 2 fossl fuel prces n her model for he EU are deermned by global supply and demand and ncorporae he EU carbon prce, whch mply comparavely hgh fossl fuel prces. For he EU hs means ha he energy demand mus be me by comparavely expensve energes or echnologes n order o mee he emsson reducon arge. Resuls from den Elzen e al. (2005 can be compared o our scenaro wh sequesraon, where hey calculaed he abaemen cos n Europe o be approxmaely 1-2 per cen of GDP n 2050 for hree dfferen emsson reducon arges n he range of per cen compared o a baselne level n Ths s abou bllon Euros accordng o GDP forecas from European Commsson (2012c and s lower han our esmaes. The dfference can be explaned by wo man facors: 1 her cos resuls are deermned by he global equlbrum prce for CO 2 perms, where he supply curve sem from margnal abaemen cos curves. These curves are derved from dfferen general and paral equlbrum models, for dfferen world regons and are lkely o be lower han 29

30 hose we have for he EU counres; 2 ncorporaon of comparavely cheap abaemen opons such as CDM-creds 2, carbon sequesraon due o fores managemen as well as afforesaon and reforesaon. These mehods can conrbue o reducons n he overall cos of reachng he arges and can explan her lower cos. Fgure 4 shows he cos share of fossl fuel, boenergy and fores producs n all counres. The dfference beween counres can be explaned by akng wo exreme cases such as Germany and Sweden. The cos share relaed o reducons n boenergy and fores producs are hgher n Sweden han n Germany. Ths s due o he possbly n Sweden o reduce boenergy and fores producs n favor of sequesraon durng he suded perod. Such sraegy mples a cos advanage, whch s possble because fores growh can connue o ncrease hroughou he perod. Ths s no he case n Germany, whch nally has an older fores, whch mples ha reaches s growh peak n jus a few years. In ha respec, here s no advanage for Germany o reduce boenergy and fores producs n favor of sequesraon snce ha would only lead o slower fores growh. Insead a large proporon of he emsson reducons mus come from reduced consumpon of fossl fuels. 30

31 100% 80% 60% 40% 20% 0% Ausra Belgum Bulgara Cyprus Czech Republc Denmark Esona Fnland France Germany Greece Hungary Ierland Ialy Lava Lhuana Luxemburg Mala Neherlands Poland Porugal Romana Slovaka Slovena Span Sweden UK Fores producs Boenergy Fossl fuel Fgure 4. Cos shares per counry for reducons n fossl fuels, boenergy and fores producs The oal abaemen cos n he scenaro wh and whou sequesraon can be found n Appendx E, Fgure E1. Fgure 5 shows how addonal sequesraon s developng n he counres wh he hghes level of sequesraon durng he enre perod. The oher counres are found n Appendx E, Fgure E2 and E3. The developmen s varyng beween counres and can be explaned by wo man facors: 1 The shape of he bomass volume funcon as well 31

32 as he average age n he nal year vares beween counres. Ths means ha he annual bomass ncremen, whch s he same as he sequesraon level, wll also vary durng he polcy perod. 50 Mllon on CO2 removed per year Ausra Germany Fnland France Ialy Poland Span Sweden UK Fgure 5. Developmen of addonal sequesraon n fores and fores producs Counres wh a low nal average age have hgher poenals o ncrease sequesraon han counres wh an nal hgh age, snce here s a lm o ncreasng sequesraon. 2 The varaon n sequesraon s also deermned by he dfferences n cos of reducng n parcular boenergy, and n some cases also fores producs, n favour of 32

33 sequesraon. The explanaon for reducng fores producs n favour of sequesraon n some counres s he dynamcs n fores growh. I s somemes an advanage o keep he fores and hereby ncrease he fores age, o reach a hgher level of sequesraon n he fuure. 4.1 Sensvy analyss The level of fores sequesraon n boh sandng bomass and fores producs are largely nfluencng he overall resuls of he model. Therefore, he model s also run wh a lnear funcon for sandng bomass o see wha effec ha has. A lnear funcon mples a consan growh rae, for whch we use he mean annual ncremen n European foress n 2010 (Appendx C, Table C1. Fgure 6 shows ha he oal abaemen cos of achevng he arge s only 67 per cen wh he lnear funcon compared o he exponenal funcon. The explanaon for hs s a hgher level of addonal sequesraon wh a lnear funcon. Ths s shown n he second and hrd bar n Fgure 6, where he addonal sequesraon s 97 per cen of he BAU sequesraon n 2050 wh he lnear funcon and only 8 per cen of he BAU sequesraon wh he exponenal funcon. Ths s expeced, snce a consan growh rae mples no slowdown n growh when foress become old. Fgure 6 also shows ha here s a hgher level of fossl fuels n 2050 wh a lnear funcon, 135 per cen, compared o he 33

34 exponenal. Ths s because fewer fossl fuel reducons have o be made when he sequesraon level s hgher. 160% 140% 120% 100% 80% 60% 40% 20% 0% Toal cos (Lnear/Toal cos (Exponenal Addonal seq./bau seq. (Lnear Addonal seq./bau seq. (Exponenal Fossl fuel (Lnear/ Fossl fuel (Exponenal Fgure 6. Comparson of oal cos, sequesraon (seq. and fossl fuel consumpon n 2050, when usng eher he lnear funcon for sandng bomass n foress or he exponenal funcon As saed n he daa secon, sequesraon poenal n each counry buld on daa for average fores age and sandng bomass volumes as well as fores area n If 34

35 hese daa are erroneously esmaed ha wll affec he overall cos of achevng he arges. Therefore, sensvy analyss s carred ou for changes n nal average age and fores area. We also analyze he effecs of changng he prce elasces and produc prces. The reason s ha fores produc elasces are assumed o be he same for all EU counres based on he Swedsh esmaes and fossl fuel elasces are que old. Smlarly, prces of fossl fuels and fores producs are que dffcul o rereve snce companes are relucan o repor hem. The effecs on oal abaemen cos of reducng or ncreasng hese parameers by 10% n he sequesraon scenaro are shown n Table 1. The resuls ndcae ha he oal coss are mos sensve o changes n fores area, wh an ncrease n cos by 18.4 per cen, or a decrease by 16.4 per cen, when he area s shfed upwards or downwards, respecvely. The reason for hs hgh sensvy s ha he area deermnes he overall avalably of fores sequesraon opporunes n a counry. The cos s much more sensve o an upward han a downward shf n fores age. An ncrease n fores age mples ha we reach maxmum sequesraon faser, whch n urn mples a slower fores growh earler n he me perod. Ths mples hgher coss, snce more reducons have o be carred ou n he fossl fuel marke. The abaemen cos s no parcularly sensve o changes n fores relaed elasces or prces, neher o changes n fossl fuel elasces or prces. The resuls show ha he 35

36 abaemen cos s more sensve o changes n boenergy han fores produc elasces and prces. Ths s mos lkely due o he fac ha fores producs hardly change durng he whole me perod, snce ha carres a cos for achevng he same amoun of sequesraon as n foress. The abaemen cos s also more sensve o changes n ol elasces and prces, compared o he same changes n gas and coal. Ths s mos lkely due o he comparavely hgh cos and large consumpon quanes of ol. Table 1. Changes n oal coss n percenages of achevng he emsson arges o 2050 n he scenaros wh sequesraon, when he parameers are changed downwards or upwards by 10% Down Up Fores age -0.4% 3.2% Fores area 18.4% -16.4% Fores produc elasces 0.1% -0.1% Boenergy elasces 0.3% -0.2% Fores produc prces -0.1% 0.1% Boenergy prces -0.3% 0.3% Coal elasces 1.5% -1.2% Gas elasces 3.1% -2.9% Ol elasces 5.7% -5.0% Coal prces -1.3% 1.3% Gas prces -3.2% 2.8% Ol prces -5.5% 5.1% 36

37 5. Dscusson and concluson We se ou o analyze f fores sequesraon should be ncreased a he expense of boenergy and fores producs n a cos-effecve EU clmae polcy o By comparng wo dfferen scenaros; wh and whou addonal sequesraon,.e. he level of sequesraon above he BAU level, we found a cos savng of 18 per cen when recognzng sequesraon, boenergy and fores producs. The resuls also showed ha he cos-effcen level of sequesraon ncreased durng he suded perod, wh varaons beween counres n boh level and rae of ncrease. Ths ncrease came a he expense of reducons n boenergy n parcular. Fores sequesraon was also ncreased n a few counres a he expense of fores producs despe our assumpon ha fores produc consue a permanen carbon snk. Ths s explaned by he dynamcs n fores sequesraon, where s somemes opmal o ncur a hgher cos oday n order o reach a hgher sequesraon level n he fuure. Our resuls also showed ha he level of yearly addonal sequesraon n he EU corresponds o a maxmum of 4.9 per cen ou of he oal requred reducon n CO 2 emssons, whch means ha large reducons n eher fossl fuels or alernave abaemen mehods such as renewable energes or agrculural sequesraon are sll needed. Fnally, s worh ponng ou ha European foress are far from beng sauraed durng he suded 37

38 perod, meanng ha sequesraon s sll posve beyond 2050, however he rae s fallng slowly. Our resuls are n lne wh he general leraure resuls ha pons owards coseffecveness n usng fores sequesraon as an abaemen mehod (e.g. Bose e al., 2009; Kndermann e al., 2008; Murray e al., 2009; Rchards and Sokes, 2004; Sohngen, 2009; Van Kooen e al., The dynamc models ha compared he coseffecveness of boenergy and sequesraon however drew conrasng conclusons. Hedenus and Azar (2009 found ha fores resources should raher be used for boenergy producon han sequesraon n a cos-effecve clmae polcy, when src long-erm arges are appled, whle Gelen e al. (2002 and Schneder and McCarl (2003 found ha sequesraon s more cos-effecve han boenergy. The man explanaons for he dvergng resuls n Hedenus and Azar (2009 are due o he fac ha hey use an energy sysem model, wh exogenously gven energy demand. Ths can mply ha comparavely low cos boenergy s used o mee hs demand, a he expense of fores sequesraon. Addonally, hey assume ha boenergy s carbon neural, whch gves an advanage o boenergy compared o sudes such as hs, where s assumed ha boenergy mples ne emssons. Ther assumpon of carbon neuraly s however no suppored by he recen leraure ha focuses on hs ssue (e.g. Holsmark, 2012; Hudburg e al., 2011; Johnson, 2009; Schulze e al.,

39 The mplcaons of our resuls for polcy developmen s n parcular ha fores sequesraon should be recognzed as an abaemen opon n EU s clmae polcy, snce ha could reduce he overall coss of reachng he ambous arge se for he long-erm. There are a number of possbles avalable o ake n sequesraon n EU s clmae polcy, ncludng an ncluson n he exsng framework of ETS and member sae arges or n a separae framework. Kukman e al. (2011 propose a separae framework for carbon sequesraon n he EU and dscuss dfferen polcy nsrumens closely relaed o he Common Agrculure Polcy (CAP, whch could be used o cover he land use secor as a whole. The economc leraure (e.g. Alg e al., 2010 generally propose marke based nsrumens such as emsson radng; axes or carbon offse schemes for he agrculural and foresry secors emssons and snks. However, more research s needed o fnd he mos approprae nsrumen for fores sequesraon n he EU. Any such research should ake no consderaon ha sequesraon s accompaned wh unceranes and dynamc effecs ha affec her overall poenal. Furhermore, any polcy nsrumen for ncenvsng fores sequesraon mus f no he exsng frameworks and polcy nsrumens for reducng carbon emssons and ncenvsng ecosysem servces n he land use secor. The model underlyng hese resuls has boh srenghs and weaknesses. The srenghs are n parcular relaed o he level of deal n esmang fores sequesraon poenals, where each European counry has an ndvdually esmaed fores growh funcon. The 39

40 weaknesses are relaed o he ncluson of only fores relaed and fossl fuel abaemen opons. The ncluson of oher opons, such as renewable energes and carbon sequesraon n he agrculural secor could affec he resuls, as well as ncluson of he possbly o conver land o and from foresry. The laer seems parcularly mporan gven our fndngs n he sensvy analyss. Also, sequesraon mgh be furher ncreased hrough he choce of fores managemen measures. Due o hese lmaons, he resuls should be nerpreed wh some care. 40

41 Foonoes 1 Calculaon of overall emsson reducon arge o 2050: Emssons1990 * 0.2 = Emssons2050; Calculaon of yearly emsson reducon arges: Emssons2010 * = Emssons2011 Emssons2011 * = Emssons2012 Emssons2049 * = Emssons CDM creds sem from Clean Developmen Mechansm projecs. These are emsson reducon projecs ha are carred ou n so called Annex 1 counres o he Kyoo Proocol, whch have no bndng emsson reducon arges accordng o hs Proocol. The CDM-creds are raded on he European carbon marke and are cheaper han EU carbon allowances. 41

42 Appendx A. Dervaon of abaemen cos funcons Le P and B denoe he producer prce and he quany suppled n counry,, of boenergy. The supply funcons of boenergy are assumed o be lnear and are hen wren as: B a b P (A1 Where, a, s a consan ha represens he nercep of he supply curve and, b, s he coeffcen ha represens he slope of he supply curve. An esmae of he coeffcen s derved from he defnon of he supply elascy of boenergy as: b B P (A2 where B, P and are he observed boenergy oupu and prce under BAU as well as he supply elascy of boenergy, respecvely. When nserng (A2 n (A1 and solvng for he nercep we oban: a ( 1 B (A3 The cos funcon s gven by he nverse supply funcon: B a P b Where he nercep s P n erms of b a 1, and he coeffcen. By usng (A1 and (A2 we oban an expresson for b B and he exogenous parameers: B, P and as: 42

43 43 (1 B B P P (A4 The cos funcon, decreases n producer surplus, for reducons n B s obaned by negrang (A4 over B and deducng ha from P as follows: B B db B B P B B P B B C (1 ˆ ( ˆ ( ˆ (A5. The cos funcons of reducons n fossl fuels are derved n he same fashon as he cos funcons for reducon n boenergy, excep ha we calculae reducons n consumer surplus and use he demand funcons for fossl fuels nsead of supply funcons. Ths cos funcon s calculaed as follows: ( (1 ˆ ( ˆ j j j j j j X X j j j j j X X Px dx X X Px X X C j j (A6 Dervaon of he frs order condons from he Lagrange funcon (6: Where, A F B H and ( 1 V V A S 0 ( 1 ˆ ( 1 ˆ ( 1 1 j j B j j B A B B B C A B B B C B L (A7

44 ˆ ( 1 F A F F F C F L (A8 0 ˆ ( j j j j j j X X X C X L (A9 0 ( ( A V G A A V G V L (A10

45 Appendx B. Converson parameers The parameer,, s calculaed accordng o he IPCC (2006 mehod as follows: BCEF * CF * ER Where BCEF s he bomass converson and expanson facor ha vares beween boreal and emperae foress; CF s he carbon fracon of dry maer wh a sandard value of 0.5 and ER s CO 2 emssons removed from he amosphere wh a sandard value of 44/12. Boh fores sequesraon and fores producs are convered no CO 2 emssons removed from he amosphere by means of,. Table B1 shows he parameer values used for, n emperae and boreal foress. The calculaon of ne emssons from boenergy s carred ou n wo seps. Frs, he level of boenergy (m 3 s convered by he facor,, whch s 0.18 (Fores Sweden, 2012, no he same un of measuremen as coal (oe n order o be deduced from he coal consumpon. The ne coal use s hen j convered no emssons by he converson facor for coal,, where j=coal. Second, emssons from harvesng, ransporng, processng and combusng boenergy, defned as,, are added n he emsson equaon. The parameer,, conss of emssons from harvesng, ransporng processng and combuson of boenergy. Table B1 conans he numbers and source of he converson facors. 45

46 Table B1. Converson parameers used n he model Fores relaed parameers Ol 4 Coal 4 Naural Gas 4 on CO 2 /m 3 oe/m 3 on CO 2 /oe on CO 2 /oe on CO 2 /oe j In all counres wh emperae foress. In counres wh boreal fores he number s The calculaon of he BCEF n η s he average of pne, oher conferous and hardwood speces n emperae foress and he average of pne, frs, spruces and hardwood n boreal foress. The numbers sem from Table 4.5 n IPCC (2006. The followng counres have boreal fores: Esona, Lhuana, Lava, Fnland and Sweden. 2 Ths ncludes harves, ranspor and processng emssons of on CO 2 /m 3 (Peersen,2006 and combuson emssons of on CO 2 /m 3 (Holsmark, Ths s he converson facor ranslang m 3 no oe (Fores Sweden, Gren e al. (

47 Appendx C. Daa relaed o fores resources Table C1. Average age, bomass volume, fores area and ncremen n 2010 Average age years 1 Model age years Fores volume m 3 /ha 2 Model volume m 3 /ha Real ncremen m3/ha/yr Model ncremen m3/ha/yr Fores area ha Ausra ,5 9, Belgum ,9 7,8 678 Bulgara ,1 7, Cyprus ,9 0,9 173 Czech Rep ,9 9, Denmark ,8 587 Esona ,6 6, Fnland ,6 4, France ,2 5, Germany ,1 9, Greece ,3 1, Hungary ,4 6, Ireland ,8 5,8 738 Ialy , Lava ,8 5, Lhuana ,7 5, Luxemburg ,5 7,3 87 Mala ,5 0.3 Neherlands ,6 8,1 365 Poland , Porugal ,5 5, Romana ,5 8, Slovaka ,4 7, Slovena ,8 7, Span ,1 3, Sweden ,7 5, UK ,6 6, Fores age, volume and area from UNECE (2013 and real ncremen from Eurosa ( Inal age s calculaed from daa on fores area by age class for 2010, where he age class form weghs. For Ausra, Luxemburg, Porugal, Romana, Slovena 2005 age and volume s used. 47

48 2 Inal volumes per hecare are calculaed from daa on oal volume and fores area for The C-R funcon s he same as for Neherlands, age and volume adjused o real ncremen 4 The C-R funcon s he same as for Ialy, age and volume adjused o real ncremen 5 The C-R funcon s he same as for Slovaka, age and volume adjused o real ncremen 6 The C-R funcon s he same as for UK, age and volume adjused o real ncremen 7 The C-R funcon s he same as for Esona, age and volume adjused o real ncremen 8 The C-R funcon s he same as for Porugal, age and volume adjused o real ncremen 48

49 Table C2. Calbraed parameers of he Chapman-Rchards funcon k m n Ausra Belgum Bulgara Cyprus Czech Rep Denmark Esona Fnland France Germany Greece Hungary Ireland Ialy Lava Lhuana Luxemburg Mala Nehelands Polands Porugal Romana Slovaka Slovena Span Sweden UK The hree parameers of he Chapman Rchard funcon are calbraed based on Bjornsad and Skonhof ( same as France, 2 same as Ialy, 3 same as Slovka, 4 same as UK, 5 same as Esona, 6 same as Porugal 49

50 Table C3. Producon quanes of fores producs and boenergy n 2010 Counry Ind. roundwood (housand m3 Fuelwood (housand m3 Ausra Belgum Bulgara Cyprus 5 4 Czech Rep Denmark Esona Fnland France Germany Greece Hungary Ireland Ialy Lava Lhuana Luxemburg Mala 0 0 Neherlands Poland Porugal Romana Slovaka Slovena Span Sweden UK Source: Eurosa daabase (2013a. Fores producs are ndusral roundwood and boenergy s fuelwood. 50

51 Appendx D. Daa relaed o fossl fuels Table D1. Toal consumpon n all secors of fossl fuel producs n 2010 Naural Gas (1000 oe Ol producs (1000 oe Coal producs (1000 oe Ausra Belgum Bulgara Cyprus Czech Rep Germany Denmark Esona Fnland France Greece Hungary Ireland Ialy Lhuana Luxemburg Lava Mala Neherlands Poland Porugal Romana Slovaka Slovena Span Sweden UK All counres Source: Eurosa, 2013b 51