Perspectives on bioenergy futures - International bioenergy trade and bioenergy expansion in a European policy context

Licentiate thesis, 2007

Biomass can be used to substitute the use of fossil fuels in the energy system. Presently, the use of biomass is being promoted in Sweden and the rest of the EU by targets and policies. The overall objective of the thesis is to provide insights on selected bioenergy issues: the use of biofuels for transport versus heat and electricity, an increased international biofuels trade and other trading options for bioenergy. The first paper combines energy systems modelling and other energy system analyses in order to investigate how different policy objectives, underlying the promotion of bioenergy (cost-effective climate change mitigation, employment creation and reduced dependency on imported fossil fuels), influence the attractiveness of different bioenergy options. The Perspectives on European Energy Pathways (PEEP 1.0) model, which is a regionalized energy and transport systems model that covers the main part of EU27 (excluding Malta, Cyprus and Bulgaria), was developed to provide the cost-effectiveness perspective. The analysis shows that the different policy objectives do not seem to agree on the order of priority among bioenergy options. For example the maximization of climate benefits cost-effectively prescribes the use of lignocellulosic biomass in the stationary sector, while maximization of employment creation advocates biofuels for transport based on traditional agricultural crops. The second paper evaluates the prospects for large-scale import of biomass/biofuels to Sweden, by an assessment of selected issues judged crucial for the development of Swedish (as well as international) biomass/biofuels use and trade. The domestic bioenergy demand is expected to increase, the global supply potential is large and no major obstacles for an increasing trade of biofuels, at moderate levels, related to freight and port capacity have been indicated. Thus, besides possibly increasing costs, there seems to be no major constraints for a large-scale import of biomass/biofuels into Sweden. The third paper uses energy systems modelling (PEEP 1.1 which is a version of the PEEP model that focuses on bioenergy trade) to evaluate the cost-effectiveness of different options for bioenergy trade (biofuels, CO2 credits or electricity). Given mandatory CO2 emission reduction targets (and also in the presence of mandatory biofuels for transport targets), it is found that from an energy systems perspective both trade with biofuels and CO2 credits are cost-effective trading options – while trade with biomass based electricity is not.