André Faaij Copernicus Institute - Utrecht University

Copernicus InstituteSustainable Development and Innovation Management

The global dimensions of

bio-energy markets, trade and sustainable

development. DEO-DAY 2006: Bio-energy and Sustainability. Can we have both?, Utrecht, The Netherlands, June 13,

2006. André Faaij

Copernicus Institute - Utrecht University


Issues covered

• Global biomass resource potentials…• International bio-energy market

developments, trade and sustainability.• Agenda and need for international

collaboration.


population

GDP

trade

land productivity

future land use patterns

agricultural policy

agricultural system

irrigation, breeding, mechanization,

chemicals

biotechnology

energyconsumption

POTENTIAL FOR BIO-ENERGY?


Bioenergy production potential in 2050 for different levels of

change in agricultural management

434111

137

North AmericaJapan Ameri

0 0 0 0

Near East & North Africa

1 2 32 39W.Europe0 1432 40

harves ting res idues

bioenergy crops

1460

100125

Oceania America

1560

100125

E.Europe

1 8 14 17

East Asia10

21

178221

410

sub-SaharanAfrica

41

149

331

Caribean &Latin America

178

253315

46

268

111 136

CIS & Baltic States

South Asia

1421

2124

434111

137

North AmericaJapan Ameri

0 0 0 0

Near East & North Africa

1 2 32 39W.Europe0 1432 40

harves ting res idues

bioenergy crops

1460

100125

Oceania America

1560

100125

E.Europe

1 8 14 17

East Asia10

21

178221

410

sub-SaharanAfrica

41

149

331

Caribean &Latin America

178

253315

46

268

111 136

CIS & Baltic States

South Asia

1421

2124

Sou

rce:

Sm

eets

, Faa

ij 20

04

Potential Oceania 4-6 times projected primary energy use


B1-2010

Integrated assessment modelling using IMAGE (RIVM) for assessingland-use and production potentials of biomass for energy

Sou

rce:

Hoo

gwijk

, Faa

ij 20

04


B1 2020S

ourc

e: H

oogw

ijk, F

aaij

2004


B1 2030S

ourc

e: H

oogw

ijk, F

aaij

2004


B1 2040S

ourc

e: H

oogw

ijk, F

aaij

2004


B1 2050S

ourc

e: H

oogw

ijk, F

aaij

2004


A2 2050S

ourc

e: H

oogw

ijk, F

aaij

2004


A1 2050S

ourc

e: H

oogw

ijk, F

aaij

2004


B2 2050S

ourc

e: H

oogw

ijk, F

aaij

2004


B1 2050S

ourc

e: H

oogw

ijk, F

aaij

2004


Land-use pattern changes

A1

0

2

4

6

8

10

12

14

1970 1990 2010 2030 2050 2070 2090

year

Are

a (G

ha)

A2

0

2

4

6

8

10

12

14

1970 1990 2010 2030 2050 2070 2090

year

Are

a (G

ha)

BioresreveForestCroplandGrasslandRestlandlow-productivityAbandoned


Basics energy crop options (EU)

Crop Typical yield ranges (odt/ha*yr)

Energy inputs (GJprim/ha*yr

Typical net energy yield (GJ/ha*yr)

Production cost ranges European context (Euro/GJ)

Short term 2.9 (rapeseed) 2.6 (straw)

11 110 (total) 20 Rape

Longer term 4 (rapeseed) 4.5 (straw)

12 180 (total) 12

Short term 14 13 250 12 Sugar Beet Longer term 20 10 370 8

Shorter term 10 5 180 3-6 SRC-Willow Longer term 15 5 280 <2

Shorter term 9 4 150 3-4 Poplar Longer term 13 4 250 <2 Shorter term 10 13-14 180 3-6 Miscant

hus Longer term 20 13-14 350 ~2


Miscanthus - different genotypesC4 photosynthetic pathway

Miscanthus x giganteus Miscanthus sacchariflorus

Miscanthus sinensis hybrid Miscanthus sinensis


Global cost-supply curve for energy crops for four scenarios for the year

2050

0

1

2

3

4

5

0 50 100 150 200 250 300 350 400

Geographical potential of energy crops (EJ y -1)

Pro

duct

ion

cost

of e

nerg

y cr

ops

($ G

J-1)

A1 at abandoned agricultural landA2 at abandoned agricultural landB1 at abandoned agricultural landB2 at abandoned agricultural landA1 at rest landA2 at rest land B1 at rest landB2 at rest landB1_2000

B1 at abandoned agricultural land in 2000

At abandoned agricultural land At rest land

Sou

rce:

Hoo

gwijk

, Faa

ij, 2

004


Overall picture 2050Biomass category

Main assumptions and remarks Potential bio-energy supply up to 2050.

Agricultural land

Potential land surplus: 0-4 Gha (more average: 1-2 Gha). 0 – 700 EJ (average: 100 – 300 EJ)

Marginal lands. On a global scale a maximum land surface of 1.7 Gha could be involved.

(0) 60 – 150 EJ

Residues agriculture

Estimates from various studies 15 – 70 EJ

Forest residues Low value: figure for sustainable forest management. High value: technical potential. Figures include processing residues.

(0) 30 - 150 EJ

Dung Use of dried dung. Low estimate based on global current use. High estimate: technical potential.

(0) 5 – 55 EJ

Organic wastes Figures include the organic fraction of MSW and waste wood. Higher values possible by more intensive use of bio-materials.

5 – 50 (+) EJ

Total Most pessimistic scenario: no land available for energy farming; only utilisation of residues. Most optimistic scenario: intensive agriculture concentrated on the better quality soils.

40 – 1100 EJ (250 - 500 EJ)


Productionsites

CentralGatheringpoint

Rail transport

River / ocean

Border

International bio-energy logistics not a showstopper when

organized rightly

Shiptransport

Harbour and/orcoastal CGP

ConversionUnit

0 2 4 6 8

10 12 14 16

Residues Europe - Pellets per Ship -

Methanol Residues Europe -

Methanol per Ship - Methanol

Crops Europe - Pellets per Ship -

Methanol Crops Europe -

Methanol per Ship - Methanol

Crops LA 300MW inland - Pellets -

Methanol Crops LA 300MW inland - Methanol -

Methanol Crops LA 1200MW

inland - Methanol (4x) - Methanol

Crops LA 1200MW inland - Methanol -

Methanol Crops E Europe 300 MW - Methanol per

Ship 2000 km - Methanol

Cos

ts (€

/GJH

HV

Liqu

ids)

Conversion Storage Densification Drying Sizing Ship Train Truck Wire Biomass


Mozambique…

[Batidzirai & Faaij, 2005]


Potential surplus agricultural land in 2015 in Mozambique, dependant on

the level of advancement of agricultural technology

0 5 10 15 20 25 30 35 40 45 50

intermediate/mixed

high, rain-fed/mixed

high, rain-fed/landless

very high, rain-fed/landless

high, rain-fed-irrigated/landless

million ha

very suitable

suitable

moderatelysuitable

marginallysuitable

level of agricultural technology/animal production system



Regional biomass annual production potential in

Mozambique/PJHHV (2015)


Total 7 EJ;2.5 times the Total primary Energy demandof the Netherlands


Comparison of bioenergy growing costs by region type

(€/GJ)



Logistics for export….



Range of costs for FT fuel delivered at Rotterdam

Harbour

0

1

2

3

4

5

6

7

8

9

10

11

12

EF Pellets EF Pyrolysis CFB FT

Fuel

cos

t(€/G

J del

iver

ed)

Labour

Energy

O&M

Capital

Biomass



Bioenergy halfway this century…

• 100 EJ from forest & Ag. residues & organic wastes

• 100 EJ from restoration schemes degraded lands

• 200 EJ from good quality land released due to higher efficiency in agriculture (DC’s, Eastern Europe…)


Bioenergy halfway this century…

• ~ 400 EJ is an expected 1/3 of the world’s future energy needs; the key alternative for mineral oil!

• Represents 1-3 TRILLION U$ market value worldwide; larger than agriculture…

• Involves some 10% of the worlds land surface / one fifth of agricultural/pasture lands.


International bio-energy markets developing

fast… • Excitement:– Solid biofuels trading develops in bilateral setting;

bio-ethanol entered first phases of commodity market trading; ‘’wild west phase’’

– Growing bio-energy demand and international supply chains create unique opportunities for biomass producing regions.

– Investments in large scale conversion capacity now more secure.

– Ultimately, a real alternative for mineral oil…• Concerns:

– Overexploitation (water, land competition) should be avoided and fair trading principles implemented.


The key linkages…• Agriculture the key for bio-energy…• Bio-energy could be the key lever

for rural development.• Bio-energy is (and will be) propelled

by sound economics; market almost unlimited (and uncontrolled)

• Sustainability to be secured in a global setting.


Areas of concern relevant for sustainability of the biomass production and trading chains

Social criteriae.g. Labor conditions

Human safety and health …….

Economic criteriae.g. Viability of the business

Yields………

Ecological criteriae.g. Preservation of existing sensitive ecosystems

Conservation of ground and surface water ……..

General criteria•e.g. Traceability

•Avoidance of leakage effects•………

⇛Many criteria, but quantitative and measureable indicators are often missing

[Lewandowski & Faaij, 2004]


Copernicus InstituteSustainable Development and Innovation

Operationalisation of sustainability criteria

costs

land availability

Criteriadeforestation

competition with food production

biodiversity

soil erosion

fresh water

nutrient leaching

pollution from chemicals

employment

child labour

wages

Impact

cropmanagement

system

yield quantity

cost supply curve

[Smeets et al., 2005]


Copernicus InstituteSustainable Development and Innovation

Indicative cost impacts of applying sustainability criteria…

[Smeets et al., 2005]

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

VS mS VS mS

Brazil Brazil Ukraine Ukraine

€/G

J

soil erosion

nutrient losses

pesticide use

health care

education

child labour

w ages

reference scenario


Quickscan of PROALCOOL-Brazil

Issue RemarksWater use Dependant on local situationWater pollution Dependant on local situation; criteria availableBiodiversity Indirect impacts?; research requiredErosion Dependant on local situationGM cane No GM cane is usedCane burning Complex issue: link with employment, erosion, GHGGHG/emission Soil carbon is crucialCompetition with food Indirect impacts?; research requiredEmployment Indirect impacts?; research requiredWages/working conditionsChild labour Easy to check; limited impact

Limited impact and/or unimportant issue and/or easy to tackle and/or indicators present

Big impact and/or important issue and/or difficult to tackle and/or no indicators present

[Smeets, Junginger,Faaij, Walter, 2006DRAFT!]


Closing remarks (I)• Large, economic, biomass potentials (but

needs complex, sustainable, development and a working international market; 1/3 of global energy demand seems feasible!)

• Integration of biomass production into agriculture (implying integrated rural development schemes targeting traditional agriculture)

• Competitive biomass-technology combinations within reach for the world market (but needs serious, consistent development and market introduction).


Closing remarks (II)• Sustainable biomass production achieving

multiple benefits is possible (but needs strong frameworks and control of market forces).

• Diversity in ecological and socio-economic conditions to be recognized (asking for regional approaches in a global setting; stakeholder approaches (PIA) seem best model).

• Sense of urgency is needed; market forces are already steering development of international bio-energy markets.


Closing remarks (III)• Flagship projects (to demonstrate

multiple benefits and framework(s) under different conditions; solid fuels… multiple markets with international focus…

• Promising future; but policy needs to choose and coordinate (agriculture, trade, climate, energy and development are interlinked here).

• Strong need for international collaboration and action: IBEP, Biofuels Init., IEA, G8 partnership, WTO, etcetc.


Internat. network: IEA Task 40

• Members: Netherlands (T.L.; Copernicus & Essent), Sweden, Norway, Brazil, Finland, Canada, UK, Italy, Belgium; Germany just came on board

• Affiliated international bodies– FAO, World Bank; (interest: UNCTAD, WWF int., UNEP)

www.bioenergytrade.org:• Detailed activities• Results (e.g. country reports, analyses)• Events• Partner for collaboration

Documents

André Faaij Copernicus Institute - Utrecht University