Sveaskog has made a breakthrough in the ambition to become one of the larger biofuel suppliers in southern Sweden. The state forestry company has signed a contract with C4 Energy in the municipal of Kristianstad to supply 30 000 MWh of biofuel, starting October 1 this year.
A new report published last week by a consortium of organisations shows that biomass for heat and power holds a very large untapped potential for Europe as a cost effective source of renewable energy and greenhouse gas emission reductions. However, this potential is not being realised today.
The report representing many of the relevant stakeholders in the biomass debate (environmental organisations, the forest products industry, the utility industry), including the European Climate Foundation, Sveaskog, Södra, and Vattenfall. WWF was involved and extensively consulted in the development of the report, and endorses most of the main conclusions. Management consulting firm McKinsey & Company provided analytical support. The report provides a fact base on biomass as a fuel for heat and power production so that its advantages and disadvantages compared to alternative production technologies – principally fossil fuels – can be debated in an objective way.
The European Commission counts on biomass to grow in the same order of magnitude as all other sources of renewable energy together between now and 2020. If this growth is realized, biomass costs look likely to come down 15-40%, so that biomass becomes cost competitive versus fossil fuel alternatives at a CO2 price of 30-50 EUR/ton. However, the report highlights that this growth potential is not being realised today – biomass use for heat and power is currently growing at only a third of the pace foreseen by the European Commission to meet the 202020 targets. This presents a major challenge for Europe’s transition to a sustainable energy supply.
To unlock growth, and avoid missing the biomass opportunity, policy makers and companies need to recognise that while biomass for heat and power is a proven technology, most supply chains are immature and face a number of barriers that need to be removed for the industry to scale up, e.g. lacking initial profitability.
As biomass for heat and power is only one of several products harvested from forests – and depends for its profitability on the other products also being harvested – the scale-up must be done in a way that does not jeopardize the rest of the industry. In addition, reinforced environmental frameworks and legislation will be needed to ensure such a development does not come at the expense of a sustainable use of natural resources.
Speaking at the launch of the report Jules Kortenhorst, CEO of the European Climate Foundation said: “Biomass is an important part of the solution in the shift to a low carbon economy in Europe. With the right regulatory structure, business leadership and proper regard for land-use change, biomass could realise its true growth potential. At present the growth rate is only a third of what is necessary to meet existing targets, but our report highlights what needs to be done to rectify this situation and to ensure that biomass by 2020 delivers as much energy to Europe as diesel does today.”
Eight key observations underline the overall conclusion laid out above and are substantiated in the report:
The full report is available on the web pages of the authoring organizations. For media enquiries please contact Tim Nuthall at the European Climate Foundation (firstname.lastname@example.org or + 32 478 98 74 79).
For more information regarding the content of the report, please contact any of the authoring organizations:
For the WWF, please contact László Máthé at email@example.com, or at + 44 78 465 47 355