Bioheat, Biopower and Biogas developments and implications for agriculture Bioheat, Biopower This report complements earlier OECD work on liquid biofuels and provides and Biogas information on biomass based heat and power, as well as on biogas. 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The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the CzechRepublic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. ISBN 978-92-64-08586-2 (PDF) DOI 10.1787/9789264085862-en Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda. © OECD 2010 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected]. 3 FOREWORD – Foreword This study is one of several reports carried out in the context of analyses on market and policy-based approaches to bioenergy. It follows and complements an earlier OECD study entitled Biofuel Support Policies – An Economic Assessment, published in 2008, and focuses on bioenergy chains other than liquid biofuels. Martin von Lampe, agricultural economist with the OECD Directorate for Trade and Agriculture, is the main author of this study. The sections on commercialised biomass crops, conversion technologies and environmental performance of alternative bioenergy crops, however, were contributed by three consultants, D.B. Turley, H. Parry and R. Leybourn (Central Science Laboratory, UK). In addition, many colleagues in the OECD and Delegates from OECD member countries provided valuable input and comments on an earlier draft. BIOHEAT, BIOPOWER AND BIOGAS: DEVELOPMENTS AND IMPLICATIONS FOR AGRICULTURE © OECD 2010 5 TABLE OF CONTENTS – Table of Contents Executive Summary ........................................................................................................ 7 Introduction ................................................................................................................... 11 Key attributes of commercialised biomass crops .......................................................... 15 Conversion technologies ............................................................................................... 16 Combustion ............................................................................................................ 16 Gasification ............................................................................................................ 17 Conversion efficiencies for thermal processes ...................................................... 18 Combined heat and power (CHP) generation (cogeneration) ................................ 19 Anaerobic digestion (AD) ...................................................................................... 19 Material preparation ............................................................................................... 20 Bioenergy support policy developments ....................................................................... 21 The environmental performance of alternative bioenergy chains, ................................. 25 GHG savings .......................................................................................................... 25 Energy balance....................................................................................................... 31 Market developments in the overall bioenergy context................................................. 33 Costs of bioheat, biopower and biogas production ................................................ 40 Implications for agriculture ................................................................................... 40 Annex 1. Technical remarks on live-cycle analyses ..................................................... 45 References ..................................................................................................................... 51 Additional references for life cycle data ....................................................................... 53 BIOHEAT, BIOPOWER AND BIOGAS: DEVELOPMENTS AND IMPLICATIONS FOR AGRICULTURE © OECD 2010 7 EXECUTIVE SUMMARY – Executive Summary Bioenergy, or energy produced from biomass, receives a lot of attention both at the policy level and from the public. Past OECD analysis on policies supporting the production and use of liquid biofuels for transport (OECD, 2008) has shown that other forms of bioenergy, such as bioheat, biopower and biogas, could represent economically more viable and environmentally more efficient ways to reduce GHG emissions and fossil fuel use, two of the high-ranking objectives behind most bioenergy support policies. The present report aims to complement this first study in explicitly looking at those forms of bioenergy and the policies supporting them. Bioenergy represents a rather heterogeneous portfolio of different biomass feedstocks and conversion technologies. While particularly first- generation liquid biofuels are dominated by feedstocks originating from agricultural products, such as grains, sugar crops and oilseeds, non- agricultural feedstocks (such as forest products and residues, industrial and municipal wastes) and, to a lesser extent, agricultural residues and wastes, dominate in the generation of bioheat and biopower, resulting in substantially less competition with the production of food and animal feed. Commercialised biomass crops, which could compete with land use for food production, are being developed, but today only play a minor role. Main technologies to convert biomass to heat and/or electrical power include the direct combustion (partly as co-firing with fossil fuels), the gasification and the anaerobic digestion producing biogas. Combined heat and power generation plants allow improving the energy efficiency with the use of the remaining heat after power generation for space heating or in industrial applications. Being part of the renewable energy portfolio, heat and power generation from biomass benefits from public support measures in many countries. The objectives of such support are many fold and in particular include the security of energy supply, environmental improvements, rural development, and the generation of supplementary outlets for agricultural products. While a number of countries have established national or regional targets for BIOHEAT, BIOPOWER AND BIOGAS: DEVELOPMENTS AND IMPLICATIONS FOR AGRICULTURE © OECD 2010 8 – EXECUTIVE SUMMARY renewable energy, only a few have defined specific targets for bioheat and/or biopower, including Germany, Ireland, Japan, New Zealand, Norway, Romania and the US. The policy measures applied most commonly include guaranteed prices for renewable electricity or gas fed into the grid, and investment subsidies. The application of these measures differs across countries, however, and is complemented by a large set of other support measures. To what degree does the environmental performance of the different bioenergy chains meet the objectives behind the political support? While many other factors are relevant in this context, the present study focuses on two major variables: greenhouse gas (GHG) savings and energy balances. A large number of studies providing life-cycle analyses (LCAs) for bioheat, biopower and biogas chains were evaluated for this study, and the results indicate that while there is substantial variation in the GHG and energy balances, indeed most of these chains show important savings of GHG emissions when compared to the main fossil alternatives. This is particularly true for electricity production chains, where GHG savings generally range between 63% and 99% when compared to the use of coal, and between 37% and 98% when compared to the use of natural gas. While still significant, savings were found to be smaller for heat applications, though this may reflect on the lower efficiency associated with smaller district, space heating and domestic heating systems. In either case, GHG savings for most chains seem to be significantly higher than for liquid biofuel chains. While the average energy efficiency for most biopower chains ranges between 0.3 and 0.8 MJ per MJ , with a few studies indicating values in out above 1 MJ per MJ , this represents significant fossil energy savings in out when compared to efficiencies of 2.1 MJ per MJ for natural gas, and in out 2.8 MJ per MJ for coal fired power plants. Similar savings in fossil in out energy use are found for a range of bioheat chains when compared to natural gas and fuel oil as feedstocks. Data on the production of bioheat, biopower and biogas, and particularly on biomass use, is scarce, but available data provide a couple of general trends. First, on a global level, some 10% of total primary energy demand is met by energy from biomass, but almost two-thirds of this come from non- agricultural solid biomass outside the OECD area. While detailed data are lacking it can be assumed that much of this is traditional biomass, such as firewood used in developing countries for cooking and heating. Within the OECD, too, the vast majority of bioenergy is based on forest products and residues. Agricultural biomass – crops, residues and wastes – only plays a BIOHEAT, BIOPOWER AND BIOGAS: DEVELOPMENTS AND IMPLICATIONS FOR AGRICULTURE © OECD 2010