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Policy and Economy of global biomass production and bioenergy - - PowerPoint PPT Presentation

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ecologic.eu Policy and Economy of global biomass production and bioenergy biomass production and bioenergy Timo Kaphengst Ecologic 18.10.2007 Oikos Conference, St. Gallen (CH) ecologic.eu ecologic.de Part I: Economy and political

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ecologic.eu

Policy and Economy of global biomass production and bioenergy

18.10.2007 – Oikos Conference, St. Gallen (CH)

biomass production and bioenergy

Timo Kaphengst Ecologic

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ecologic.de ecologic.eu

Part I: Economy and political framework

  • 1. Introduction

1.1 What is biomass and what can it be used for 1.2 What makes bioenergy different to other renewable energies? 1.3 Current state of biomass production in the world

  • 3. Political driving factors for bioenergy

Excurse: Potentials of biomass supply

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Excurse: Potentials of biomass supply

  • 4. Policy instruments to push bioenergy
  • 5. Economic drivers for bioenergy

5.1 Variables influencing the profitability of bioenergy 5.2 Economic players of Agrofuel Boom 5.3 Key barriers for bioenergy in Europe (regional scale)

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  • 1. Introduction

1.1 What is biomass and what can it be used for? “The organic material derived from biological systems” B

Food

Wood

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B I O M A S S

Food

Wood Agricultural products Organic wastes Marine Resources

Material: Fibre, Chemicals,...

Bioenergy Biodiversity

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  • 1. Introduction

1.2 What makes bioenergy different to other renewable energies?

  • Wide range of applications
  • Electricity
  • Thermal

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  • Thermal
  • Fuels (liquid, gaseous)
  • Storage capacities
  • Land dimension
  • Expected yields?
  • Land ownership?
  • Land competition?
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  • 1. Introduction

1.3 Current state of biomass production in the world

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  • 1. Introduction

1.3 Current state of bioenergy production in the world

World fuel ethanol production 2006

18.000 20.000

World biodiesel production 2006

4500 5000 Source: F.O. Licht 2007 Datum 18.10.2007 – Oikos Conference, St. Gallen (CH) 6

2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 USA Brazil EU China million litres

500 1000 1500 2000 2500 3000 3500 4000 4500 E U G e r m a n y F r a n c e I t a l y U S A M a l a y s i a million litres

Relation: Worldwide traded liquid fossil fuels: 920.000 million litres

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  • 2. Political driving factors for bioenergy
  • Combating climate change
  • Security of energy supply

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  • Rural development and income opportunities
  • Estimated potentials of biomass
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Excurse: Estimated potentials of biomass in the EU

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Source: IE/BFH/ÖKO/UH 2005

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Excurse: Estimated potentials of biomass

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Source: IEA (2005) „Global pattern 2030“

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  • 4. Policy instruments to push bioenergy

European Union:

  • Targets:
  • 5.75 % biofuel share in overall fuel consumption in 2010
  • Set as binding: 10 % in 2020
  • Mandated blend rates

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  • Tax reductions and Subsidies: 3.7 billion Euro in 2006 (Kutas et al., 2007)
  • Excise Tax exemptions for biofuels: 1.8 billion Euro in 2005, 3 billion

Euro in 2006

  • Energy crop premium payment (45 €/ha)
  • Investment and research grants
  • Others:
  • Allowance to grow energy crops on set-aside land
  • Import Tariffs (especially on ethanol)
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  • 4. Political instruments to push bioenergy

USA:

  • Targets:
  • 15% biofuel share in overall fuel consumption in 2017

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  • Tax reductions and Subsidies:
  • 51 % tax reduction for bioethanol
  • Subsidies for corn: 8.9 billion $ (2005)
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  • 5. Economic drivers for bioenergy

Agrofuels (big scale):

  • Rising demand for liquid fuels and transportation
  • Using established structures for new markets
  • Increase public acceptance for corporate activities

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Biogas (small scale):

  • Diversification of production patterns
  • Risk minimisation
  • Optimisation of substance cycles
  • Cost reductions (fossil energies, waste disposal)
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5.1 Variables influencing the profitability of bioenergy

  • Costs and availability of feedstock
  • Feedstock costs: 50-80% of overall production costs
  • Infrastructure (transport)
  • Government regulation

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  • Government regulation
  • “Greatest uncertainty”
  • blend rates, tariffs, tax exemptions
  • Conversion technologies
  • Decisions: In which technology to invest?

Location of production

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5.2 Economic players of Agrofuel Boom

Investments in Agrofuels:

  • Agrobusiness

(ADM, Cargill, Syngenta,…)

  • Oil industry

(BP, Shell, PetroChina, …)

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(BP, Shell, PetroChina, …)

  • Finance (bank, equity funds)
  • Car industry

(DaimlerChrysler, VW,…)

  • Gentech Industry

(Monsanto, DuPont,…)

Source: Clean Edge 2006

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5.3 Key barriers for bioenergy in Europe (regional scale) Economic conditions

  • Still subsidies on fossil and nuclear fuels
  • External effects and benefits not integrated

Know-how and institutional capacities

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  • Learning processes for farmers, regional planners, bank and

maintanance staff

Supply chain coordination

  • Connection between biomass supply and conversion technologies
  • Cooperation needed
  • Competition for biomass

Source: McCormick &Kåberger (2007)

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End of part 1

Datum 18.10.2007 – Oikos Conference, St. Gallen (CH)

Timo Kaphengst

Ecologic, Pfalzburger Str. 43-44, D-10717 Berlin

  • +49-30-86880-0,
  • +49-30-86880-100

timo.kaphengst@ecologic.eu, www.ecologic.eu

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Part 2: Environmental and social issues of biomass production

  • 1. Influencing factors of environmental impacts of bioenergy
  • 2. Energy yields of bioenergies
  • 3. Large scale impacts
  • 4. Leakage Effects
  • 5. Social effects of large scale biomass production

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  • 5. Social effects of large scale biomass production
  • 6. Overall Conclusions

6.1 Winners and losers of current bioenergy boom 6.2 Remaining questions

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  • 1. Influencing factors of environmental impacts of bioenergy -

Agriculture

gative nce of bioenergy iculture Crops used

particular crop, perennial or annual, GMO etc.

Cropping systems

crop rotations (farm and landscape level), large scale/small scale, agro-forestry, mono cropping/ multi- cropping etc.)

Indirect effects

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Positive or negat environmental performanc cropping in agricu Land use practises/ management intensity

intensiv or extensive, fertilizer input, plant protection products, machinery use, organic farming, management

  • f grassland, no/ low tillage etc.

Residue management

extracted amount of agricultural residues, stubble management etc.

Suitability of site chosen

ecological sensitivity, suitability for farming system, indirect effects on adjacent land

Evaluation criteria

Efficiency of biomass production and use

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  • 1. Influencing factors of environmental impacts of bioenergy -

Forestry

egative mance of biomass forests

Indirect effects Amount of biomass removed

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Positive or neg environmental performa removal from f

Management practices

Technology used for harvest and residue extraction, management practices (clear cuts, selected thinning etc.), timing of harvesting

Suitability of site chosen

ecologically sensitivity, soil type and region, soil steepness, protected area status

Evaluation criteria

Efficiency of biomass production and use

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  • 2. Energy yields of bioenergies

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Source: SRU (2007)

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  • 3. Large scale impacts - Deforestation

Rainforest Loss due to palmoil plantations in Malaysia and Indonesia Datum 18.10.2007 – Oikos Conference, St. Gallen (CH) 21

Photo: Marcel Silvius

Source: CSPI (2005)

203.833 96.089 75.110 32.634

50.000 100.000 150.000 200.000 250.000

TOTAL Burned in wildfires Planned plantations Current plantations

square kilometers

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  • 3. Large scale impacts – High input land use

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Photo: Klemens Karkow Photo from Fritsche 2007

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  • 4. Leakage Effects

Displacement or so called leakage effects: “activity-induced changes in land use that occur outside the area in which the activity takes place“

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Regional: shifts in land uses occur on adjacent land Global: former land uses shift to other parts of the world

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  • 5. Social effects of large scale biomass production
  • Expulsions from land Migration to cities
  • Increasing food prices due to land competition
  • Threats to food security

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  • Higher land rents
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  • 6. Overall Conclusions

6.1 Winners and losers of bioenergy boom under current conditions Winners Losers Land owners Landless people

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Land owners Landless people Agrobusiness Smallholders Oil industry Poor people Gentech Industry Decision makers Finance Rainforest, Biodiversity Research Climate Consultancies Soil, Water

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  • 6. Overall Conclusions

6.2 Remaining questions

  • Centralised vs. decentralised biomass production ??
  • Export orientation vs. domestic production ??

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  • Export orientation vs. domestic production ??
  • Large scale vs. small scale production ??
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Thank you for listening.

18.10.2007 – Oikos Conference, St. Gallen (CH)

Timo Kaphengst

Ecologic, Pfalzburger Str. 43-44, D-10717 Berlin

  • +49-30-86880-163,
  • +49-30-86880-100

timo.kaphengst@ecologic.eu, www.ecologic.eu