Module 4a. The need for Bioenergy Strategies. Outline

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1 Module 4a The need for Bioenergy Strategies Outline What is the issue? The role of bioenergy Barriers for the use of bioenergy Bioenergy policies Bioenergy challenges slide 2/40 1

2 What is the issue: Intergovernmental Panel on Climate Change (IPCC) warming of the climate system is now proven most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in greenhouse gas concentrations due to human activities observed impacts include increasing frequency and intensity of extreme climatic events, such as more destructive floods, serious and sustained droughts and melting glaciers. These impacts may result in harmful effects on important livelihood sectors such as agriculture, as well as adverse effects on human health and ecosystems effects that seriously diminish food security and hinder poverty alleviation. slide 3/40 What is the issue? The production of bioenergy on the scales necessary to supply significant shares of national and global energy provision will result in very substantial impacts (positive as well as negative) on the ecosystems, economies and cultures. The protection of biodiversity, rural livelihoods and management of scarce water resources are critical considerations in analysis of the potential for sustainable bioenergy provision. Therefore, whilst modern bioenergy could contribute significantly to poverty alleviation in rural areas, the effects of changes to the supplies of natural resources and ownership of those resources are of concern to policy makers. slide 4/40 2

3 What is the issue? For the world s poorest households, basic energy services for: cooking and heating, lighting, communication, water pumping, and food processing are particularly important. Shifting these basic energy uses from traditional bioenergy (when used in unsustainable and healthdamaging forms) to modern fuels and electricity is probably one of the most important and long-lasting challenges. slide 5/40 What is the issue? slide 6/40 3

4 What is the issue? Bioenergy consumption and potential Source: BP Statistical Review (June/2006) The tropics are the most suitable area for biofuels The greater consumption per capita is outside the tropics! Cancer Tropic Equator Capricorn Tropic slide 7/40 Tropical Area Biofuels What is the issue? Biomass trade flows North America W.Europe E.Europe Near East & North Africa CIS & Baltic States East Asia Japan ethanol South Asia pellets palm oil & agricultural residues bioenergy crops residues Caribean & Latin America Sub-Saharan Africa Oceania America Source: adapted from IEA (2007); more info on trade: IEA Bioenergy Task 40 - Sustainable International Bioenergy Trade slide 8/40 4

5 The important role of bioenergy bioenergy for electricity, heat and transport is a key option to ensure access to energy, especially for rural areas; bioenergy provides an opportunity to promote establishment of local small businesses, and thereby create economic revenue, and employment; bioenergy contributes to diversifying energy supply, and hedging risks of impacts from global fossil fuel price increases; bioenergy provides a means to reducing greenhouse gas emissions, especially by applying the CDM. slide 9/40 Barriers to increase the use of bioenergy Feedstock competition Food, feed, materials Sustainability Land-use change GHG balance Economy Costs: not competitive in most applications Limited volume Limited market slide 10/40 5

6 Barriers to increase the use of bioenergy Technical (variety in physical properties, limited ability to use different fuels) Ecological, land-use, social (large energy plantation, competition, small farmers) Information (lack of information dissemination) Financial (competition with fossil fuels, transportation, investment, dependence on policy support measures) Market (unstable, trade is bilateral: direct between buyer and seller, risk of contamination with import biofuels, transport tariffs, obtaining emission permits) slide 11/40 Barriers: Political Concerns slide 12/40 6

7 Barriers: gender issues A gender perspective in planning bioenergy projects ensures that the concerns and needs of women and men are taken into account. Women s involvement is of particular importance, as women spend three times as much time transporting fuel and water as men and regularly carry four times as much as men in volume. slide 13/40 Barriers on Biofuels Biofuels have potential to deliver energy, climate and development benefits. However, concerns persist about their sustainability Rapid, unchecked pursuit of biofuels could lead to: Deforestation and biodiversity loss Marginalization of small land holders & land tenure conflicts Greenhouse gas emissions in excess of fossil fuels Competition for scarce natural resources and increased food prices slide 14/40 7

8 Barriers on Biofuel - Demand side Demand Outlook Asia Gasoline & Diesel Vehicle numbers have increased rapidly to match economic growth Demand for transport fuel is projected to grow at 3 to 4% per year - but could be much higher Liquid biofuels production will increase significantly to supplement fossil fuel supplies slide 15/40 Policy framework Policies involved in the bioenergy sector include Agriculture Energy Environment Trade Policy objectives driving biofuel expansion: energy security climate change mitigation agricultural and rural development export diversification slide 16/40 8

9 Main objectives of bioenergy policies More energy security or autonomy? (US) Environmental benefits (mainly Europe) Rural development (some developed and many developing countries) Export diversification (some transition and developing countries) slide 17/40 Policy options for promoting bioenergy Policy measures Solving sustainability issue (international classification and certification) Introduce biomass standards (fair trade) Lowering trade barriers Long-term support policies creating a stable demand-side (investment incentives, production incentives, power purchase agreements Create a sustainable supply side (increasing demand, contracting) slide 18/40 9

10 Regional Biofuel Policies Biofuel development in the region will be driven by government policies China 15% biofuels target by 2015 Indonesia 2% biofuels target by 2010 Thailand 20% biofuels and natural gas target by 2012 India 10% ethanol target and 20% biofuels by 2017 Philippines 10% ethanol mandate and 2% biodiesel mandate by 2010 Malaysia 5% palm oil mandate in diesel slide 19/40 Knowledge and policy at national level Knowledge Bioenergy potential Land use Technologies Stakeholders Economics Policy (integration) Agriculture Food security Energy Fiscal Rural development Land use Environment Industry RD&D slide 20/40 10

11 At International level Cooperation Research Information systems Standards and certification Sustainability criteria Trade Technological transfer Environmental Conventions slide 21/40 Bio-energy development strategy First reduce energy consumption Then technology improvement (fuel efficiency) Then renewable energy including bioenergy slide 22/40 11

12 Bio-energy development strategy Maximising direct/indirect cofiring in conventional coal-fired power plants Indirect cofiring (gasification) in natural gas-fired boilers and CCs Decentral CHP production (gasification, pyrolysis - > GEs, GTs, FCs) Gasification/methanation -> green natural gas (SNG, LNG) Hydro-Thermal-Conversion Biorefinery Implementation time slide 23/40 Bio-energy strategy: biorefinery Vegetable oils Sugars & starch Trans esterification Hydrolysis & Fermentation Pure plant oil (PP O) Bio-diesel Bio-ethanol Ligno cellulose Gasification Catalytic synthesis Fischer-Tropsch fuels Methanol & Other options Pre-treatment Hydrolysis & Fermentation Bio-ethanol Bio-butanol Liquefaction Upgrading Bio-crude slide 24/40 12

13 Example from the EU Challenges for bioenergy Relying on oil will become more and more risky Fuels emit pollutants and greenhouse gases Bioenergy will become cheaper with performance enhancement, economies of scale and competition Bioenergy should increase more than twofold 20% renewable energy in 2020 Various directives in place and under preparation, e.g. RED Bioenergy, by far the major contribution to renewables About two thirds of renewable sources slide 25/40 Example from the EU What actions should be taken (1)? Actions are needed at all decision making levels Taxes on fossil fuels Apply the lowest VAT rates on biofuels and BET s Financial instruments Toward high efficiency and reduction in CO2 Not so much harmonisation of instruments as political push Various instruments and measures applied at country level are not necessarily controversial as they take into account economic, political and environmental framework conditions in the national and local environments slide 26/40 13

14 Example from the EU What actions should be taken (2)? Give bioenergy fair competition rules Between fossil fuels and domestic bioenergy Develop infrastructure to produce/collect/transport biomass Remove administrative barriers Guarantee fair grid access for bioelectricity and biogas Set up more demonstration plants to widen the range of reference plants and spread experience in new energy chains Remove barriers such as the unreasonable treatment of biomass as waste, inflated fire safety precautions and excessive delays in obtaining permits for bioenergy projects Harmonise trade regulations Give incentives on the demand side for bioenergy Speed up the implementation of Directives slide 27/40 Example from the EU What actions should be taken (3)? Energy policy - Don't forget heat most schemes support renewable electricity and liquid biofuels for transportation less support is given to bioheat, while heat is the main energy market A more ambitious agricultural policy for bioenergy the new Common Agricultural policy decouples subsidies and production creates lots of uncertainties amongst the farmers The public should know about the bioenergy alternative Information campaigns to increase public awareness of the threat of the present energy system, with its emphasis on the inevitable shortage of fossil reserves, increasing price volatility in the future and possible economic recession with unemployment. slide 28/40 14

15 Example from the EU What actions should be taken (4)? Standards are facilitating market and business growth Harmonised and balanced emission thresholds for bioenergy facilities Define standards for biofuels (solid, liquid and gas) and equipment Define specifications for ethanol and high blends of gasoline Increase biodiesel percentage in the diesel standard EN590 and adjust standard EN in order to allow the use of ethanol in the process Define specifications for pure plant oil, PPO slide 29/40 Example from Indonesia The energy policy supply side: energy intensification and energy conservation (production optimization) demand side: energy diversification and energy efficiency (energy conservation) increasing energy price gradually toward economic price protecting the environment : promote sustainable development slide 30/40 15

16 Example from Indonesia RE potential and installed capacity Source: RIPEBAT, DGEEU 1997.ACE,2002 RE Source Installed Potential (MWe) % Capacity*) MWe Utilization Geothermal Micro-hydro Solar/PV E-03 Wind E-03 Biomass Biogas Total slide 31/40 Example from Indonesia Biomass Residues Potential Biomass Production (million t/y) Technical potential (million GJ/y) Rubber wood Logging residues Sawn timber residues Plywood residues Sugar residues Bagasse: Rice residues Husk: Coconut residues Shell: Palm oil residues Empty fruit bunches: Source: ZREU, CGI 2000 slide 32/40 16

17 Example from Indonesia Short term policy measure Investment and Financing Incentive Policy Energy Price Standardization and Certification Human Resources Quality Information Research and development Institution Regulation slide 33/40 Example from Indonesia Long term policy measure Application of the energy players mandatory to utilize RE (NFFO-Non Fossil Fuel Obligation) Application of mandatory to save energy Application to utilize efficient and environmentally friendly technology Establishment funding institution in order to finance RE and Energy Conservation programs slide 34/40 17

18 Example from Indonesia National target of primary energy mix in 2050 slide 35/40 Key issues (I) Resources need to meet criteria in broad sense. Resource base needs to be diversified (lignocellulose, cultivated, marginal & degraded lands). Real market experience needs to be built in different settings (DC s!). Sustainable (international) markets and certification to be established. International collaboration and harmonization on criteria and standards. Stable and coherent policies. slide 36/40 18

19 Key issues (2) Consider bioenergy as one option and not just biofuels; use power and heat market as stepping stones for 2nd generation biofuels. Use niches for biofuels (residues with add on hydrolysis units and co-gasification of biomass). Facilitate learning (conversion, supply infrastructure, biomass production). Stable and coherent policies. slide 37/40 Key issues (3) Bioenergy is at the corner of land-use (2nd revolution!), development (poverty!), energy (oil!) and climate (carbon stocks!); this is a unique position. We have the bioenergy options to achieve synergies (as well as the wrong ones) Governance is the key; across policy fields (agriculture, energy, climate, development); consistent and stable. slide 38/40 19

20 THANKS FOR YOUR ATTENTION! slide 39/40 CO2 Mitigation Options slide 40/40 20

21 Oil & Gas Production Forecasts slide 41/40 World Population Growth Source: History Database of the Global Environment slide 42/40 21

22 International Oil Flows Source: IEA World Energy Outlook 2004 data slide 43/40 International Gas and Coal Flows Natural Gas 2030 Coal 2030 Source: WEC Italy analysis based on IEA World Energy Outlook 2004 and Energy Information and Administration data slide 44/40 22