Alternative Fuels Considerations on Land Use Impacts and complementarity/competition for feedstocks

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1 Alternative Fuels Considerations on Land Use Impacts and complementarity/competition for feedstocks Air Transport Net Forum Greening and independence from fossil fuels Frankfurt 08/10/12 Laura Lonza Scientific Officer European Commission, Joint Research Centre Institute for Energy and Transport

2 Context Ambitious targets set at global and EU level for aviation biofuels at 2020 and beyond. Tests indicate substantial CO2 emissions reduction potential on full carbon life-cycle analysis via advanced biofuels.

3 Outstanding questions Net carbon balance of biofuel use Scientific progress and normative revisions Remaining uncertainty Availability of bio-components: From EU domestic production? From imports to the EU? From sustainable sources meeting GHG reduction targets? Note: The primary focus of JRC activities in this field is on availability, not on costs and investments

4 General considerations Biofuel use that only marginally reduces net GHG emissions is a really expensive GHG mitigation strategy From now to 2020 and 2050 biomass resources will be under increasing demand for mostly road transport, power, food, There is no necessary climate benefit from using biofuel in a plane instead of a car or a power plant*. * This statement may change when the passenger car fleet is electrified and electricity supply comes from renewable sources

5 Net carbon balance of biofuel use Direct emissions: Agriculture (fertilisers and pesticides production and use, farm fuel, nitrous oxide emissions) Processing Transport and distribution A large-scale switch to biofuel use exerts significant indirect impacts affecting the net GHG balance Demand for biofuel crops must be met by combinations of: Increased production on existing agricultural land (yield increase) Reduced consumption in other sectors (food vs. fuel / food variety/quality vs. fuel) Bringing new areas into production (indirect effects of biofuels)

6 Indirect effects of biofuels Indirect Land Use Change (ILUC) Carbon emissions Biodiversity loss Social impacts (can be both positive and negative) Food vs. fuel (food price rises) Food quality and variety vs. fuel Forest Carbon Debt Displacement of waste and residues streams across industrial sectors Displace animal fats e.g. more fuel oil or palm oil Displace agricultural residues e.g. more fertilisers, less feed Compete with heat and power sector for biomass

7 What is ILUC? If biofuel crops are grown on uncultivated land, direct land use change will result. In general, crops for biofuels are grown on existing arable land already used for food production. This causes ILUC because of the necessity to maintain food production by moving it onto other land.

8 How to measure ILUC? ILUC cannot be measured directly. Impact evaluation is based on the assessment of a baseline scenario (situation without biofuel policies) vs. a policy scenario (2020 regulatory targets). Estimating ILUC requires projecting impacts into the future. Economic models are generally used.

9 ILUC modelling Economic models are used to map out scenarios for ILUC Crops displace each other Crops displace pasture for livestock Biofuel production results in by-products (DDGS, oil meals) Crop yield increases as prices increase Crop yields are lower on newly cultivated areas Demand in other sectors (incl. food) is reduced, as prices increase Crops displace forest or grassland. The question is not whether ILUC occurs but what area it affects and what carbon consequences it has.

10 Forest C Debt Land use change can also lead to significant changes in carbon stocks in soils and biomass, and changes in GHG emissions. The immediate effect of cutting more roundwood* for energy purposes is to reduce the carbon stock in the forest. This carbon debt is eventually replaced as the trees regrow. Consider also carbon emissions at transformation, the payback time is of the order of a few centuries. Concerns are major when wood for energy purposes comes from carbon-rich soils (peatland), as typically for palm oil plantations Again: The question is not whether ILUC occurs but what area it affects and what carbon consequences it has. *the trunks of trees typically used for paper-making

11 The Coming Decade for European Fuel Demand Road fuel demand continuing steady shift from gasoline to diesel Jet fuel/kerosene demand increasing Ratio of diesel to gasoline continuing to grow Europe is and is expected to be short on diesel and jet fuel/kerosene production Surplus gasoline production, Market opportunity for biodiesel blends

12 Fuel demand outlook 2020: aviation EU fuel demand reference projections range from 56 (2) 73 (1) Mtoe consumption by 2020 Jet fuel specification likely to allow only HVO or BTL in this decade HVO/BTL or ETS certificates are options to offset GHG emissions Aviation fuel consumption is excluded from Fuel Quality Directive (FQD) but included in Renewable Energy Directive (RED) 1) DG TREN: "European Energy and transport trends to 2030, Update ) itren 2030 Methodology ( )

13 Biofuel aviation pathways and indirect impacts Pathway Feedstock Availability Scalability Indirect impacts? Thermochemical (Fischer-Tropsch Pretty much anything Limited to date Cellulosic biomass pathways scalable when commercially viable Dependent on feedstock and criteria, For energy crops on good land could be high. Camelina oil Very limited Unproven Hydrogenation Babassu oil Very limited Unproven Jatropha oil Very limited Poor record, to date Low for responsible projects, on high-value land comparable to other crops Algal oil Hardly any High, if ever Low if avoids high-value coastland and minimises water consumption Palm oil Large amounts Proven Severe (no net carbon savings, biodiversity loss, social conflict)

14 Advanced biofuels outlook 2020 Growing global supply of advanced ethanol but uncertainties on EU production 2020 and availability to the EU transport sector. Scaling up of Biomass-to-Liquid (BTL) difficult due to technical issues and high initial investment costs. The pace of development of advanced biofuels significantly impacts the capacity to meet regulatory targets (e.g. RED). Under the existing RED regime, Member States estimate advanced biofuels at 1.0% of EU transportfuels. Considering multiple counting under the proposed regulatory revision that would amount to about 1.6%.

15 Conclusions Indirect effects of biofuels result from one bad assumption: biomass carbon neutrality. There is a trade-off between food security and indirect emissions. Carbon debt in bioenergy from forest biomass: up to centuries pass before it saves GHG. Just creating demand for bioenergy/biofuels does not ensure additional C sequestration or reduced carbon emissions. There is a clear call for: Bioenergy from rational use of wastes (straw and manure). Bioenergy from land with positive C sequestration EU proposed regulatory revision: increased incentives for advanced biofuels, esp. wastes. As an estimate that could maybe double the contribution of advanced biofuels. Imported biofuels from wastes and would probably fill the gap. Investment + time from conception to operation of new plants is a key limiting factor. After 2020 EU production of advanced biofuels may rise rapidly.

16 Thank you for your attention Air Transport Net Forum Greening and independence from fossil fuels Frankfurt 08/10/12