PERSPECTIVES FOR BIOENERGY IN AUSTRIA AND OTHER CENTRAL EUROPEAN COUNTRIES (WITH A SPECIAL FOCUS ON THE 2020-RES-TARGETS)

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1 PERSPECTIVES FOR BIOENERGY IN AUSTRIA AND OTHER CENTRAL EUROPEAN COUNTRIES (WITH A SPECIAL FOCUS ON THE -RES-TARGETS) G. Kalt, L. Kranzl, R. Haas Energy Economics Group, Vienna University of Technology Gusshausstraße 25-29/373-2, 14 Vienna Tel.: /37363, Fax: /37397, kalt@eeg.tuwien.ac.at ABSTRACT: This paper gives an overview of the current state, recent developments and future prospects of bioenergy use in Central Europe with a special focus on the European Union s targets in the field of renewable energy sources. Currently, the share of biomass and wastes in the total gross inland energy consumption ranges from 2.4% in Italy to 14.2% in Denmark (). Efforts to reduce greenhouse gas emissions and increase the share of renewable energy sources as well as EU directives and according promotion schemes have led to notable progress in the use of biomass in some Central European countries. Especially in the field of biofuels for transport and electricity generation, high growth rates could be observed in recent years. There are considerable unused biomass resource potentials in some Central European countries. However, if serious efforts are put in fulfilling EU- and national energy policy targets, the biomass potentials in Central Europe need to be tapped to a large extent by. This paper summarizes the core results of scenarios for the future development of biomass use in Central European countries and in more detail for the case of Austria. These scenarios provide insight into the importance of biomass for the future energy supply in Central Europe and help to reveal critical issues. Keywords: action plan, policies, strategies 1 INTRODUCTION The promotion of Renewable Energy Sources (RES) has a high priority in the energy policy strategies of the EU. Among the different RES, biomass is of crucial importance for the future energy supply in Central Europe (CE). Not only because it already has the highest share of all RES, but also due to its vast potentials and the fact that it can be used in all energy sectors: for sole heat and electricity or combined heat and power generation as well as for the production of transport fuels. The purpose of this work is to provide insight into the perspectives of bioenergy utilization in Austria and other CE countries (Czech Republic, Germany, Hungary, Poland, Slovenia and Slovakia) as well as Italy and Denmark (1) with a focus on the achievable contribution of bioenergy to the -RES-targets (as defined in the 29-EU Directive on the promotion of the use of energy from renewable sources ( RES directive ) [1]). For this purpose, the current use of bioenergy, recent developments in utilization, data on environmentally compatible resource potentials and scenarios for future developments are analyzed. Fig. 1 shows the geographical location of the considered countries in Europe. The paper is organized as follows: Section 2 gives a description of the methodological approach. In Section 3 the energy policy targets of the European Union according to the 29-RES directive are described in brief. The topic of Section 4 is the current use and recent developments of bioenergy use in CE countries. Section 5 deals with the prospects for a further increase of bioenergy use. Section 6 provides a summary and conclusions. DK DE IT CZ AT SI PL SK HU Figure 1: Geographical location of the considered countries in Europe 2 METHODOLOGY The methodological approach of the paper consists of the following steps: First, the current use of bioenergy in the considered countries is described and compared according to the following characteristics: the share of biomass in the total energy consumption, the type of biomass resources used and the sectoral structure of biomass use (heat generation, electricity production and mobility). Furthermore, the progress in the utilization of bioenergy in recent years is analyzed. This analysis is primarily based on data provided by Eurostat, 29 [2] and progress reports of the European Commission ([3], [4]). Due to the wide variety of biomass resources, the different ways of utilization and the different technologies and conversion processes applied, a comprehensive characterization of the bioenergy utilization chain in a certain country is not straightforward. Within this work special attention was paid to

2 the different concepts in statistics and inconsistencies with data other different publications (such as the progress reports of the European Commission). Second, the perspectives for a further increase of bioenergy utilization in CE countries with a special focus on the -RES-targets are analyzed. This analysis includes a review of biomass potentials (based on data in literature), scenarios about the development of energy supply according to Capros et al., 28 [5] and scenarios for the future deployment of RES according to Resch et al., 28 [6]. For the case of Austria a more detailed analysis is carried out: based on simulations of the future development of the Austrian bioenergy sector, the impact of different promotion schemes is analyzed. 3 ENERGY POLICY TARGETS 3.1 The -RES-targets With the implementation of Directive 29/28/EC [1] an overall binding target of a 2 share of renewable energy sources in energy consumption [ ] as well as binding national targets by in line with the overall EU target of 2 have been established. The share of RES is calculated as the sum of final energy from RES consumed in the heat, transport and electricity sector, divided by the total final energy consumption (including distribution losses and consumption of the energy sector). Therefore, there is some flexibility as to how the national targets can be achieved. (Especially in the field of bioenergy since biomass can be used in all energy sectors.) Fig. 2 illustrates the shares in the year 25, the national targets by and the indicative trajectories according to the RES directive. Among the considered countries, the share of RES was highest in Austria in 25, due to the high importance of hydropower and biomass. Austria also has the highest target (34%), followed by Denmark (3) and Slovenia (25%). Share of RES in final energy consumption (%) 35% 3 25% 2 15% 1 5% 34% 25 Average 211 and % % 17% 15% 25% Average 213 and 214 Average 215 and 216 Average 217 and % Figure 2: Share of RES in final energy consumption in 25 and indicative trajectories towards the national targets by [1] 3.2 Targets for RES in the transport sector According to Directive COM 23/3/EC [7], which was adopted in May 23, EU Member States are required to establish national targets on the proportion of liquid biofuels for transport. The following reference values for national targets are stated in this directive: 2% by the end of 25 and 5.75% by the end of, calculated on the basis of energy values. Among the considered countries, only in Germany and Slovenia the national indicative target values for differ from the reference value of 5.75% (Germany: 6.25%, Slovenia: 5%). According to the RES directive, [e]ach Member State shall ensure that the share of energy from renewable sources in all forms of transport in is at least 1 of the final consumption of energy in transport in that Member State [1]. Thus, in addition to the overall 2 target by, a sub-target for the transport sector (including road and rail transport) in the amount of 1 was defined. The main contribution towards this target can be expected to come from biodiesel and ethanol. However, in order to promote biofuels produced from nonfood cellulosic materials and ligno-cellulosic materials (preferably residues and wastes), the amounts of these advanced biofuels count twice towards the target. Renewable electricity used in electric cars is also taken into account; in consideration of the higher efficiency of electric drivetrains, a factor of 2.5 is applied for electric cars (but not for electric trains). 4 HISTORIC DEVELOPMENT AND CURRENT UTILIZATION OF BIOENERGY 4.1 The energy supply in CE countries and the role of biomass Despite the geographical vicinity of the considered countries, the structures of their gross inland energy consumption (GIC) are quite inhomogeneous (Fig. 3). On an average the share of fossil fuels (petroleum (gasoline and diesel), natural gas, lignite and hard coal) accounts for 85% of total energy sources used, with Slovenia being least dependent on fossil fuels (7). The share of hard coal and lignite ranges from less than 1 (Italy) to more than 5 (Poland) and the contribution of petroleum from 21% (Slovakia) to 44% (Italy). The share of natural gas is especially high in Hungary s gross inland consumption (4) and relatively low in Poland and Slovenia (about 12.5%). In the Slovak Republic nuclear energy accounts for as much as 25%. There are no nuclear power plants in operation in Austria, Denmark, Italy and Poland. Fig. 3 also shows that there are significant differences between the countries with regard to energy consumption per capita. In Hungary and Poland it is about 11 GJ/a whereas in the Czech Republic it is about 185 GJ/a and in Austria and Germany about 17 GJ/a. Structure of total energy consumption (%) Energy consumption per capita (GJ/a) Industrial wastes Net electricity imports Other RES Biomass and wastes Nuclear Natural gas Petroleum Hard coal & lignite Energy consumption per capita Figure 3: Structure of the GIC in CE countries in

3 The shares of renewable energies in the total GIC of the considered countries range from 4.7% in the Czech Republic to 23. in Austria (), with biomass and wastes accounting for an average of about 7 of all renewables. In the Czech Republic, Poland and Hungary biomass and wastes even account for more than 9 of the total renewable energy supply. The share of biomass and wastes in the total gross inland consumption is illustrated in the map in Fig. 4. It is highest in Denmark (14.2%), followed by Austria (13.7%). The historic developments since 199 are illustrated in Fig. 5. In absolute numbers the biomass consumption in Germany stands out. As a result of the vast expansion of the German bioenergy sector in recent years the biomass consumption in Germany accounts for as much as 5 of the total biomass consumption in CE countries (see Fig. 6). DK 122 DE 925 IT 187 CZ 83 AT 194 SI 19 PL 198 SK 25 HU % % % % > 1 Figure 4: Bioenergy as share of gross inland energy consumption in (values in PJ/a) Source: [2], own illustration Share of biomass in gross inland consumption (%) 1 14% 12% 1 4% 2% Figure 5: Development of bioenergy as share of GIC from 199 to Consumption of biomass & wastes (PJ/a) 1,8 1,6 1,4 1,2 1, SK SI PL IT HU DK DE CZ AT Figure 6: Development of the consumption of biomass and wastes in CE, broken down by countries 4.2 The structure of biomass use Fig. 7 shows the development of biomass consumption broken down by the type of biomass use: for heat and district heat generation, electricity and combined heat and power (CHP) generation and the production of transport fuels. The figure illustrates that the biomass consumption for sole heat generation has been increasing quite linearly in the last decades. By contrast, in the field of electricity and CHP generation, rapid growth was triggered with the implementation of Directive COM 21/77/EC (21) and, accordingly, the introduction of support schemes (e.g. the German Renewable Energy Sources Act). The main progress in the use of biomass for transport started in 23 (following Directive COM 23/3/EC). The German biodiesel industry is currently responsible for about 5 of the transport fuel production in CE. According to the Eurostat definition of biomass consumption, biofuels are represented with the calorific value of the fuel (and not with the amount of biomass used to produce the fuel). Therefore, the actual amount of biomass used for the production of transport fuels is clearly higher than the consumption of biofuels shown in Fig. 7. This needs to be taken into account when comparing data according to Eurostat with results of biomass potential assessments (see Section 5.1). Consumption of biomass & wastes (PJ/a) 1,8 1,6 1,4 1,2 1, Transport fuels Electricity and CHP District heating plants Heat generation Figure 7: Development of the consumption of biomass and wastes in CE, broken down by type of biomass use The bioenergy use in CE countries is quite diverse, both with regard to the resources use and sectoral structure. The latter is illustrated in Fig. 8. In most countries, sole heat generation is (still) the dominant type of utilization. In Czech Republic, Poland and Slovenia it even accounts for more than 8 of the total biomass

4 consumption. The share of biomass used for district heating ranges from.7% in Hungary to 12% in Denmark. (District heat is not covered in the statistics for Italy.) Structure of BM & waste consumption (%) BM & waste consumption per capita (GJ/a) Transport fuels Electricity & CHP generation District heat generation Heat generation BM & waste consumption per capita Figure 8: Biomass and waste consumption in CE countries in, broken down by type of use The share of biomass used for sole heat generation is particularly low in Germany (about 3 of the total biomass use). Hence, support schemes for heat generation in recent years were not as effective as they were in the field of electricity (and CHP) generation and transport fuels. It can be assumed that a higher priority was attributed to the electricity and transport sector, originating from the orientation of EU directives and resulting in more attractive support schemes. However, there are also substantial barriers to a fast diffusion of biomass heating systems, especially with regard to domestic heating (e.g. reservations against biomass heating systems and relatively high investment costs). It has to be noted that even in Austria, where the share of biomass heating systems is traditionally high and substantial investment subsidies are granted, hardly any increase in biomass use for domestic heating has been achieved in recent years. Fig. 9 illustrates the primary production of biomass and wastes broken down by type of resources and the net imports in the considered countries. Following the Eurostat definition, the fraction wood and wood wastes does not only include forest biomass and residues of the wood processing industries, but also purpose-grown energy crops like willow or poplar, waste liquor of the paper and pulp industry, straw and other agricultural residues. Even though for most countries no data concerning the detailed structure of this fraction are available, it can be assumed that it is generally dominated by forest biomass and industrial wood residues (wood chips, sawdust etc.). In Austria, forest biomass (fuelwood and forest wood chips) account for about 5 of the total primary production and industrial wood residues and waste liquor for each about 15% [8]. In the Czech Republic and Hungary, the share of forest biomass and industrial residues is also about 8 and in Poland it accounts for almost 9 [9]. According to this statistics, Biomass imports made up a notable contribution in Italy, Denmark and Austria in. However, it has to be noted that liquid biofuels produced from imported resources are not included in net imports here, but in the respective category. This is especially relevant for Austria, since the Austrian biodiesel production is primarily based on imported rapeseed and plant oil. Considering the structure of the biomass primary production, it is obvious that the bioenergy sectors in Germany, Denmark and Italy differ significantly from those in the other countries. In these countries, the share of wood fractions from domestic production is less than 5, whereas in the other countries they account for more than 8. In Germany, this is mainly due to the progress which has been achieved in bioenergy utilization in recent years, especially in the field of liquid biofuels and biogas. In Italy and Denmark the main reasons are the relatively high share of biomass imports and the high contribution of (primarily renewable) municipal solid waste (MSW). Structure of BM & waste production (%) Net imports Other liquid biofuels Bioethanol Biodiesel MSW (nonrenewable) MSW (renewable) Biogas Wood and wood wastes Figure 9: Structure of biomass and waste production and consumption in CE countries in (the net imports account for the difference between production and consumption; breakdown into renewable and nonrenewable MSW according to [9]) Source: [2], [9] own calculations Fig. 1 shows the development of electricity production from biomass and wastes since 199. In some countries a significant increase of electricity from biomass (as a share of the total electricity consumption) was achieved in recent years. The most outstanding progress was achieved in Denmark, where the contribution of biomass increased from less than 1% in 199 to about 11% in 25. In Germany the Erneuerbare Energien Gesetz (Renewable Energy Sources Act), which came into force in June 21, led to a significant increase from about 1% in 2 to more than 5% in. Notable progress was also achieved in Austria (primarily through wood-fired steam turbine plants as well as biogas plants) and Hungary (primarily through co-firing biomass in conventional power plants). Fig. 11 illustrates the progress in the field of biofuels for transport as well as the national indicative targets for 26 and. Germany is the European leader in the field of biofuels. It had already surpassed its -target of 6.25% in 26. Austria and Slovakia also have a comparatively high share of biofuels in the road transport fuel consumption. In the other countries the share was less than 1% in. The error bars represent the differences between data according to Eurostat [2] and the Renewable Energy Progress Report of the European Commission [4] (which includes a summary of the national progress reports according to the Biofuel Directive COM 23/3/EC [7]). Apparently, the data on the use of biofuels for transport for Austria and Slovakia

5 are highly inconsistent. Fig. 11 illustrates that the 26-targets were not attained in several countries and that big efforts will be needed to meet the -targets. However, thanks to the high share in Germany, and with regard to the planned and already installed production capacities, it is not unlikely that biofuels will account for 5.75% of the total transport fuel consumption in the considered countries in. According to Resch et al. 28 [1] this indicative target is very unlikely to be achieved throughout the EU- 27. Proportion of net electricity production from biomass & wastes to electricity consumption (%) 12% 1 4% 2% Figure 1: Historic development of the proportion of net electricity production from biomass and wastes to electricity consumption (final energy) Share of biofuels in road transport fuel consumption (%) 7% 5% 4% 3% 2% 1% 7% 5% 4% 3% 2% 1% Indicative target 26 Indicative target Figure 11: Share of biofuels in fuel consumption for road transport and indicative targets for 26 and (national targets as notified to Commission, according to [4]; error bars represent the historic values according to national progress reports stated in [4]) Sources: [2], [3], [4], own calculations 5 PROSPECTS Future developments of the bioenergy sector and the achievable contribution to the -targets depend on numerous influencing factors. Among the most important are: Fossil fuel price developments Energy policy measures and subsidies for bioenergy Availability of domestic biomass resources Conditions for biomass imports Total energy demand / energy efficiency measures Technological progress (in the field of bioenergy as well as other renewable and conventional technologies) As a consequence, it is impossible to predict, to what extent bioenergy can contribute to the fulfillment of energy policy targets. However, by deriving scenarios based on reasonable assumptions for these influencing parameters it is possible to get some insight into what can be achieved under certain framework conditions. Section 5.1 gives an overview of the unused biomass resource potentials in CE countries. Section 5.2 provides insight into a possible path towards the -targets: Based on simulations according to Resch et al. 29 [6] it is analyzed to what extent the domestic resources need to be utilized in order to achieve the national targets. 5.1 Resource potentials Assessments of biomass potentials are numerous and the results vary widely (see Rettenmaier et al. 28 [11], for example). Basically, there are different concepts of potentials (like theoretical, technical or environmentally compatible potentials). Usually potentials in literature are qualified according to these definitions. Yet methodological approaches, assumptions and constraints of potential assessments differ from study to study, and therefore results are often not directly comparable. In EEA, 26 [12] a uniform methodology is applied for all EU countries, and all biomass fractions are considered. In the following figures the results of this study, which are defined as environmentally compatible biomass potentials, are compared with the current utilization in CE countries. The current biomass use (the reference year is ) shown in these figures do not exactly comply with the consumption according to the Eurostat definition for the following reasons: First, nonrenewable municipal solid wastes are not included. And second, transport fuels and biogas are not represented with the calorific value of the fuel but with the calorific value of the resources required to produce the fuel, in order to allow for a direct comparison with potentials. The following average conversion efficiencies were assumed: 55% for ethanol, 57% for biodiesel and 7 for biogas production (cp. [13]). In the following, the resulting biomass use is referred to as actual primary biomass consumption. Fig. 12 shows the comparison of the actual primary biomass consumption in with the resource potentials according to [12] for Austria, Germany, Italy and Poland. Apparently, the current use in Austria and Germany is already quite close to the environmentally compatible potential for, whereas there are vast unused resource potentials in Italy and especially Poland. It is generally assumed that the potential of energy crops increases significantly from to (which is basically a result of the underlying model for the agricultural sector and assumptions concerning the development of yields). This is especially relevant for Germany, Poland and Hungary. Fig. 13 shows the comparison for the other CE countries. Apart from Denmark, all of the countries shown in this figure have considerable unused potentials available. The current use in Denmark accounts for virtually 1 of the domestic potential, but in fact a large amount of the biomass use is based on imported fuels (close to 25%). thus, there are also some unused domestic potentials in Denmark.

6 PJ/a 2, 1,8 1,6 1,4 1,2 1, AT DE IT PL Actual biomass consumption biogenous wastes forest biomass energy crops Figure 12: Comparison of actual primary biomass consumption in and biomass resource potentials in Austria, Germany, Italy and Poland PJ/a CZ DK HU SI SK Actual biomass consumption biogeneous wastes forest biomass energy crops Figure 13: Comparison of actual primary biomass consumption in and biomass resource potentials in Czech Republic, Denmark, Hungary and Slovakia 5.2 Scenarios for the development of bioenergy use The scenarios for the future deployment of renewable energies according to Resch et al. 29 [6] give an impression of to what extent the available biomass resources need to be tapped in order to fulfill the EU s 2-target of renewable energy in the final energy consumption. The following figure shows the development of biomass use in one specific simulation run, carried out with the dynamic simulation model Green-X and referred to as strengthened national policy scenario. The model Green-X simulates future investments in renewable energy technologies for heat, electricity and transport fuel production, based on a myopic ( short-sighted ) economic optimization. The availability of biomass resources, dynamic cost and price developments, the energy demand and its structure, diffusion and other influencing parameters as well as energy policy instruments are considered within the simulation runs. The core assumptions and characteristics of the strengthened national policy scenario are: Implementation of feasible energy efficiency measures (leading to a moderate development of the future overall energy demand as projected in the PRIMES target case [5]). Support conditions for RES are improved, leading to the fulfilment of the EU-wide 2-target by. (The national targets of Austria, Denmark, Poland and Slovakia are somewhat overachieved, whereas Italy does not achieve its target.) The target of 1 RES in the transport sector is only achieved with substantial imports of liquid biofuels. One of the main conclusions which can be drawn from this simulation is that biomass is of crucial importance for meeting the RES targets. Not only for heat generation and the production of transport fuels but also for electricity generation. Fig. 14 shows the development of biomass primary energy consumption in CE countries according to this scenario. The error bars represent the biomass potentials according to EEA, 26 [12] (and therefore illustrate the share of the environmentally compatible potential which is not utilized according to the scenario). Fig. 15 shows the development as share of the gross inland consumption. Actual biomass primary consumption (PJ/a) 1,6 1,4 1,2 1, Figure 14: Development of biomass consumption in CE countries ( historic; simulations according to [6]; error bars: resource potentials according to [12]) Relation of actual biomass primary energy consumption to GIC (%) 3 25% 2 15% 1 5% Figure 15: Development of biomass consumption as share of gross inland consumption ( historic; simulations according to [6]; error bars: unused resource potentials according to [12]) Fig. 16 illustrates the relative growth of RES in the final energy consumption from 26 to, broken down by bioenergy and other RES. According to the scenario, the contribution of bioenergy towards the fulfilment of the -targets in CE countries ranges from slightly more than 5 (Germany) to close to 9 (Hungary, Poland, Slovakia). Hence, it is obvious that significant growth in biomass use needs to be achieved in all CE countries in order to fulfil the 2-target in. With regard to recent trends, the development in most countries basically seems to be in line with the scenario. Especially the progress in Germany and Denmark illustrate that rapid progress is possible, provided that suitable support schemes are implemented and measures taken. Only in Slovenia and Poland hardly any progress in bioenergy use could be observed so far

7 Other RES Biomass and biogenous wastes 17.3% in the Transport scenario in. 3 Hence, the simulations indicate that under the assumption of a further increase in energy consumption the contribution of bioenergy is unlikely to increase by more than 5% compared to the reference year AT CZ DK DE HU IT PL SI SK Figure 16: Relative growth of RES in the final energy consumption from 26 to in the strengthened national policy scenario according to [6], broken down by bioenergy and other RES 5.3 The case of Austria For the case of Austria different scenarios for the future development of the bioenergy sector have been derived with the simulation tool Green-X Bio-Austria, which is an adaptation of the Green-X model and has been developed for the purpose of a more detailed simulation of the Austrian bioenergy sector (see [14] and (2)) The scenarios primarily differ with regard to the support schemes assumed, developments of fossil fuel prices and energy demand (Low-price Baseline/High-price efficiency). In the following, four scenarios in which moderate fossil fuel price developments and a further increase in energy consumption (Low-price Baseline) have been assumed, are analyzed and compared, in order to illustrate the effects of different bioenergy promotion schemes. The scenarios illustrate that due to the diversity of bioenergy technologies, the choice of support schemes can highly influence the overall efficiency of the bioenergy sector. Economic efficiency and greenhouse gas (GHG) mitigation as well as costs of GHG reduction are considered as the main criteria in this analysis. The time frame of the simulations is 211 to. For to an outlook which is based on expert opinions was derived. In the No-Policy scenario it is assumed that starting with 211 there are no more subsidies for bioenergy. This scenario (which can be considered as rather unrealistic) primarily serves as a reference for the other scenarios. In the Heat-and-Power scenario, small-scale biomass heating systems and combined heat and power plants are subsidized. In the Transport scenario, the focus is set to the transport sector by assuming an ambitious biofuel quota and in the Balanced-Policy scenario a balanced promotion of bioenergy in all energy sectors is assumed. No-policy scenario: no subsidies for bioenergy Heat-and-Power scenario: subsidies for small-scale heat, feed-in tariffs for electricity Balanced-Policy scenario: 2 investment subsidy for small-scale heat, feed-in tariffs for electricity, biofuel quota 1 by Transport scenario: 2 biofuel quota by, 3 by Fig. 17 shows the historic development of bioenergy as share of final energy consumption and the simulation results of the four Low-price Baseline scenarios. The contribution of bioenergy to the final energy consumption accounts for 14. in the No-Policy, about 1 in the Heat-and-Power and the Balanced-Policy scenario and Bioenergy as share of final energy consumption (%) % 12% 1 No-Policy Heat-and-Power Balanced-Policy Transport Historic & outlook to historic & outlook scenarios Figure 17: Biomass as share of final energy consumption in Austria: historic development (197 26), outlook ( ) and simulation results (211 ) With regard to the -targets, Fig. 17 suggests that an ambitious biofuel quota in the transport sector is a suitable energy policy measure. However, if the simulation results are examined more closely, it is evident that a comprehensive strategy for promoting bioenergy should not focus on biofuels in the transport sector. The main reasons are: In Central Europe, the production and use of biofuels for transportation is basically the least economic option of utilizing biomass energetically. Furthermore, due to the moderate greenhouse gas (GHG) mitigation of liquid biofuels, the GHG reduction costs in the transport sector are usually much higher than in the field of heat and combined heat and power generation. The highest increase of the biomass share in the Transport scenario is a result of clearly higher biomass imports than in the other scenarios. Already today, biodiesel and ethanol production in Austria is primarily based on imported raw materials. With regard to domestic value added and security of supply, a biomass strategy (or action plan) should focus on the utilization of domestic resources. Besides, the introduction of 2 nd generation biofuels produced form lingo-cellulosic biomass (in the model they are assumed to enter the market by 215), would result in a highly increased competition for wood (and other lingo-cellulosic) resources if ambitious biofuel quotas are applied. In the simulations this competition results in a decrease of biomass use for heat and combined heat and power generation. This is the reason for the decreasing share of bioenergy in the Balanced-Policy and the Transport scenario after (Fig. 17). The afore mentioned statements about the amount and costs of GHG mitigation of the different biomass uses are emphasized by the following figures. In Fig. 18 the total GHG saving of the bioenergy sector and in Fig. 19 the average costs of GHG mitigation (as an indicator of the economic efficiency of the bioenergy sector) in the different scenarios are depicted. Fig. 18 shows that in the

8 Transport scenario the GHG mitigation of the bioenergy sector is only slightly higher than in the two other scenarios with support schemes until. After the Heat-and-Power scenario shows the best performance. Fig. 19 illustrates, that the bioenergy sector in the Transport scenario is highly inefficient with regard to GHG reduction costs. Whereas the other scenarios show decreasing average costs, the ambitious biofuel quota in the Transport scenario results in a continuous increase. Total GHG saving of bioenergy sector (Mt/a) Transport scenario Heat-and-Power scenario 8.5 Balanced-Policy scenario No-Policy scenario Figure 18: Development of the total GHG saving of the Austrian bioenergy sector in the four simulations Costs of GHG saving ( /t) Transport scenario Balanced-Policy -2 scenario Heat-and-Power -4 scenario No-Policy scenario Figure 19: Development of the average costs of GHG saving of the Austrian bioenergy sector in the four simulations As mentioned before, the scenarios described above are based on the assumption of moderate fossil fuel price developments and a further increase in energy consumption. Under the assumption of a stronger increase of fossil fuel prices and higher energy efficiency, the contribution of biomass to the total energy supply can be expected to increase much more significantly, as the High-price Efficiency scenarios illustrate. The following figure shows the difference between the No-Policy and the Balanced-Policy scenario for the two cases on the basis of the share of biomass in the total gross inland energy consumption. Apparently, fossil fuel price developments have a high impact on the deployment of bioenergy plants on the one hand, and energy efficiency measures on the achievable contribution of bioenergy to the total energy supply on the other. Therefore, both suitable support schemes which ensure continuous investments in the bioenergy sector and energy efficiency measures need to be implemented in order to significantly increase the contribution of bioenergy to the fulfillment of the - targets. Share of biomass in gross inland consumption (%) % 12% 1 4% 2% historic High price efficiency Low price baseline historic & outlook scenarios Balancedpolicy No-Policy Figure 2: Development of biomass as share of GIC in Austria: historic development from 198 to 26, outlook to and High-price Efficiency and Low-price Baseline scenarios up to. The following conclusions can be drawn from the simulation results described above: Biomass resources are limited and should be used in the most efficient way possible. The contribution of biomass to the fulfilment of the Austrian -targets can be substantial. However, the crucial question is how both the targets can be achieved and the benefits of the bioenergy sector can be maximized. For the case of Austria, a focus on heat generation and to some extent CHP is recommended. A comprehensive bioenergy strategy (or biomass action plan) should account for the fact that the economic and ecological performance of bioenergy systems varies widely. Numerous criteria (including energy generation costs, GHG impact and other environmental aspects) need to be taken into account and be evaluated. 6 SUMMARY AND CONCLUSIONS Bioenergy is currently the most important source of renewable energy in CE. Its contribution to the energy supply (gross inland energy consumption) in CE countries ranges from 2.4% in Italy to 14.2% in Denmark (). European directives and according national support schemes have already led to significant progress in recent years. However, progress was very uneven in the considered countries. The CE countries with the highest increase of biomass as share of the total energy consumption from 2 to were Denmark (+5.3%), Germany (+4.5%), Austria (+3.5%) and Czech Republic (+3.2%). In absolute numbers, Germany showed by far the highest increase in biomass production and consumption. Currently, Germany is accountable for slightly more than 5 of the total biomass consumption/production in the considered countries and therefore dominates the structure of the energetic biomass use in CE. Even though heat generation from biomass is the oldest (and often most competitive) utilization path, EU directives as well as national support schemes were focused on the electricity and transport sector in recent years. As a result, the annual increments in the biomass use for heat generation have been relatively stable since

9 199, whereas in the field of power (and combined heat and power) generation and the production of transport fuels, growth rates increased considerably after 2. It can be assumed that as a consequence of the 29-EU- Directive on the promotion of the use of energy from renewable sources (in which national targets for the share of RES in the final energy consumption are defined), more attention will be paid to biomass use in the heat sector in the years to come. The rapidly increasing demand for energy crops for transport fuel production has already led to considerable shifts in international trade flows (e.g. increasing imports of palm oil to Germany). As a consequence, in order to avoid adverse (global) effects of the enhanced use of biomass (e.g. deforestation of tropical rainforests for palm oil production), certification of sustainably produced biomass is becoming more and more urgent. A high priority should be given to the mobilization and use of domestic biomass resources (especially residues and wastes). Increasing biomass imports to countries with a rapid growth of the bioenergy sector on the one hand, and evidence of unused domestic resource potentials on the other indicate that the supply with regional biomass has not been given enough attention within energy policy strategies, according support schemes and incentives. Results of studies on biomass resource potentials indicate that there are vast unused potentials in most CE countries. According to EEA, 26 [12], the environmentally compatible potential in the year in the considered countries is two times higher than the current utilization () and the potential in even three times higher. On a national level the situation is highly diverse: In Denmark, Germany and Austria the unused resource potential is relatively small, whereas countries like Poland, Italy and Slovakia currently only use a small proportion of their environmentally compatible biomass potential. It is assumed that to some extent, the very uneven progress in biomass use (primarily resulting from diverging energy policies, support schemes and as a consequence diverging biomass price developments) encouraged cross-border trade between European countries. Increasing efforts in the field of bioenergy throughout all EU countries are likely to result in a further shift of trade flows towards international (longdistance) biomass trade (cp. Heinimö et al. 29 [15]). For example, Austria is currently importing big amounts of plant oil and oilseeds (about 7.5 PJ/a in ) from its northern and eastern neighbouring countries. With an increasing domestic demand for energy crops in these countries, average transport distances and costs can be expected to increase. The importance of bioenergy for reaching the - targets (according to Directive 29/28/EC) is stressed by simulations by Resch et al. 29 [12]. These simulations indicate that among all RES, biomass can be expected to bring the biggest contribution to the achievement of the targets. Therefore, special attention should be given to the design of bioenergy policies. The following aspects should be considered within national biomass action plans: Biomass can be used in all energy sectors (heat, electricity and transport) and the economic and environmental properties of the different bioenergy technologies often vary widely. Instead of promoting all utilization paths, support schemes should focus on the most efficient uses, in order to maximize the benefits of the bioenergy sector. For the case of Austria, a focus on heat generation and provided that a high overall efficiency can be achieved combined heat and power is recommended. The structure of the available biomass potentials is quite diverse in CE countries. Especially the potential of agricultural resources (including energy crops as well as residues and wastes) is hardly tapped in some countries (especially Poland and Hungary). Specific measures for the mobilization and efficient use of locally available biomass resources should be developed and included in national biomass action plans. Finally, it should be considered that increasing competition for biomass resources between the different types of biomass use (both for energy and material uses) can be expected with the progressing exploitation of biomass potentials. In order to facilitate the diffusion of the most efficient utilization paths, bioenergy policies should be designed to counteract resource competition as far as possible; both with supply-side measures and clear priorities for the most beneficial technologies and utilization paths. 7 NOTES (1) These countries are referred to as CE countries in this work, even though Italy and Denmark are usually not considered to be part of Central Europe. (2) This analysis was carried out in the course of the project Biomass Strategy 25, a project within the Austrian program Energy Systems of Tomorrow, funded by the Austrian Federal Ministry of Transport, Innovation and Technology [14]. 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