Bioenergy: Policy and Status

Anthi CHARALAMBOUSDG TREN, D2 Technology and Innovation in Energy

Bioenergy: Policy and Status

AgEng2008 conference, Crete 23-25 June 2008

EUROPEANCOMMISSION

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Contents

1. Background (energy in figures)

2. The Energy & Climate Package January 2008

3. The SET Plan (November 2007)

4. Food Prices (May 2008)

5. Financial Instruments/support (2007-2013)

6. Conclusions

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Bioenergy in the Global scene already plays a major role supplying ~10% of world primary energy supplies

Fuel Shares in World Total Primary Energy Supply 2005

20%

26%10%2%0%0%6%

36%

Natural GasCoalBioenergyHydroOther RenewablesNon renewable wasteNuclearOil

IEA Renewables Information 2007

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Breakdown of renewable electricity in 2005 (normalised) for the EU-27

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RES-Heating Cooling expected growth

Heating and cooling projections by 2020

0

20

40

60

80

100

120

140

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

RES

-H -

ener

gy o

utpu

t [M

toe/

year

]

Solar thermalheat

Geothermal -heat pumps

Geothermal -non heat pumps

Biomass heat

Historical development Future development

Source: Renewable Energy Roadmap COM(2006) 848 final

| 8Source: EurObserv’ER 2007

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Current status: Bioethanol

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Contents






6. Conclusions

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Package of energy and climate measures (January 2008)

•Reform of emissions trading scheme (ETS)

•National targets for greenhouse gas emissions in non-ETS sectors (buildings, transport, agriculture)

•Directive on Carbon Capture and Storage (CCS)

•Renewable Energy Directive

•Reform of environmental state aid guidelines

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Renewable Energy Directive

• Sets targets for 2020:» National targets for the overall share of renewable energy (adding

up to 20%)» Targets for renewable energy in transport (10%)

• Flexibility in meeting targets:» Electricity and large-scale heat consumed in one Member State

can count towards the target of another

• Removes obstacles to the use of renewable energy:» Improving administrative procedures, information provision and grid

access» Higher blends of biofuel in diesel

• Improves the performance of renewable energy:» Efficient forms of renewable energy in buildings» Biofuel sustainability and national reporting» Incentive for second-generation biofuels

Climate Action: Biofuels in the renewable energy directive 12

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The RES Directive (1)1. Sets mandatory national targets for RES shares,

including 10% biofuels share, in 2020 (Art.3 and 5)

2. Requires national action plans (Art. 4)

3. Standardises “guarantees of origin” (certifying the RES origin of electricity or heat) (Art. 6, 7, 8 & 10)

4. Enables the transfer of guarantees of origin to give Member States flexibility to meet their targets by developing cheaper non domestic renewable energy (Art. 9)

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5. Reforms, or requires reforms of administrative and regulatory barriers to the growth of RES (Art. 12)

6. Requires improvements in provision of information and training regarding renewable energy (Art. 13)

7. Improves renewables’ access to the electricity grid (Art. 14)

8. Creates a sustainability regime for biofuels (Art. 15- 18)

The RES Directive (2)

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National Renewables Targets

0

5

10

15

20

25

30

35

40

45

50

2020

2005

Sets mandatory national targets for renewable energy shares,including 10% biofuels share, in 2020: from 8.5% to 20% for theEU overall.

Shares of renewable energy, 2005 and 2020

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How do we get there? Green X balanced scenario projection of renewable energy growth (GWh, EU25)

0

500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Biofuels

Solar thermal heating

Wind offshore

Wind onshore

Tide & wave

Solar thermal electricity

Photovoltaics

Geothermal heat & heatpumps

Geothermal electricity

Biomass, biogas,biowaste - H

Biomass, biogas,biowaste - E

Hydro

BioPower is estimated to triple by 2020in relation to 2005

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Purpose: achieve 12% RES target by 2010, diversify energy mix, reduce greenhouse gas emissions, job creation and stabilisation of rural regions

Main features:• supplemantary to EU legislation• holistic approach: from biomass mobilisation to end use,

from awareness rising to research• comprising all energy sectors: electricity, heating/

cooling, transport fuels

The EU Biomass Action Plan Communication COM(2005)628 final

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National Biomass Action Plans (nBAPs)

Climate Action: Biofuels in the renewable energy directive

6 ms currently have developed a nBAP (Denmark, Esthonia, Ireland, Netherlands, Slovenia and UK)

7 ms can be considered in preparation phase (AT, BG, CZ, FR, DE, LV, SK)

14 ms have no nBAPs

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Biofuels sustainability – Criteria

• Greenhouse gas impact

• Land use/ carbon stock

• Biodiversity

• Environmental requirements for agriculture


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Biofuels sustainability – Scope

• The sustainability criteria apply to:

» Biofuels (liquid and gaseous fuels used in transport)» Other bioliquids (liquid fuels used in heating and

electricity)

• By 2010, the Commission will report on criteria for other energy uses of biomass


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Promotion of Biofuels (1)

GHG savings – minimum of 35%

No raw material from undisturbed forests, biodiverse grassland, nature protection areas (unless taken harmlessly)

No conversion of wetlands and continuously forestedareas for biofuel production (to protect carbon stocks)

All EU biofuels must meet “cross compliance” environmental rules

Sustainability criteria for biofuels

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• Consequences of not meeting the criteria:- Biofuels do not count towards targets- Not eligible for national biofuel obligations- Not eligible for tax exemptions and similar financial

support

• Verification of compliance:- Responsibility of Member States- To reduce the administrative burden, Commission can

decide that “certification schemes” give reliable proof of compliance

- If so, all Member States have to accept these certificates as proof

Promotion of Biofuels (2)

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What‘s next on the overall package?

» Policy proposal of the Commission, January 2007

» Endorsed by the European Council, March 2007

» Endorsed by Parliament, September 2007» Legislative proposal of the Commission,

January 2008» Discussion by Council of Ministers, European

Council and Parliament through to 2009» Adoption May 2009???

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Contents






6. Conclusions

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22 November ‘package’

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.COM(2007)723 – SET-Plan CommunicationSupporting documents:.SEC(2007)1510 – Technology Map.SEC(2007)1511 – Capacities MapImpact assessment:.SEC(2007)1508 & SEC(2007)1509

. http://ec.europa.eu/energy/res/setplan/communication_2007_en.htm

EUROPEANCOMMISSION

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The SET-Plan

Some key technological challenges

First and foremost, energy efficient buildings, appliances, equipment, industrial processes and transport

Developing 2nd generation biofuels Getting large scale offshore wind competitive within the short termGetting photovoltaic electricity competitive to harness solar energyCreating a European smart, bi-directional, RES friendly gridFuel cell and hydrogen technologies Sustainable coal and gas technologiesFourth generation fission nuclear reactors and future fusion technology…

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The SET-Plan

Proposals. Joint strategic planning – Steering group + Information System. Effective implementation:

» European Industrial Initiatives: strategic technology alliances.

» European Energy Research Alliance» Trans-European Energy Networks and Systems of the

Future – Transition planning. Increase in resources, both financial and human. . Reinforce international cooperation

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Contents






6. Conclusions

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Food vs Fuels

•Commission Communication COM(2008)321 final (adopted 20.5.2008) – “Tackling the challenge of rising food prices Directions for EU action”


» Policy responses to mitigate the effects of rising global prices

» This document was discussed in the European Council 19-20 June 2008

» Short term measures in the context of the Health Check of the Common Agricultural Policy

» Biofuels production is not the only cause of the increase in the global food prices

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Food vs Fuels•Commission Communication COM(2008)321 final (adopted 20.5.2008) – “Tackling the challenge of rising food prices Directions for EU action”


» The current EU biofuel production has little impact on current global food prices

» The 10% target for the use of biofuels for transport can be achieved by the new generation biofuels

» The sustainability criteria (under discussion) shall ensure the production of biofuels in a sustainable way without damaging site effects

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Contents






6. Conclusions

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Financing Renewables

.Community Level.National/Regional Level.Private /Other sources

GeothermalBioenergy WindSolar Wave/Tidal

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Community Level

.EU funds (2007-2013)» European Regional Development Fund (9 bln €)» Cohesion Fund ( X? bln €)» European Agricultural Fund for Rural Development

( X? bln €).EU Programmes (2007-2013)» 7th Framework Programme (2.3 bln €)» Competitiveness and Innovation Programme (CIP)

( 730 mln €)

Funding Instruments

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. CIP - Intelligent Energy for Europe (SAVE, STEER, ALTENER) and Integrated Initiatives: e.g. bio-businesses, co-generation, energy services. Call for proposals (TREN call opened April 2008): http://ec.europa.eu/energy/intelligent/call_for_proposals/index_en.htm

. FP7 (TREN call opened April 2008): http://cordis.europa.eu/fp7/home_en.html

FP7: Dissemination of knowledge and innovation-

related activities

CIP: Innovation support networks and take-up of

proven technologies

€2.3 billion on energy theme2007-2013

€730m on IEE2007-2013

FP7 & Competitiveness and Innovation Programme (CIP)

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COOPERATION 2007 – 2013 (€32,4 Billion)

2.350

6.100

1.935

9.050

3.475

1.890

4.160

0.623

1.430

1.400

0 2 4 6 8 10

1. Health

2. Food, Agriculture, Fisheries,Biotechnology

3. Information & CommunicationTechnologies

4. Nano-sciences, Nano-technologies,Materials & New Production Technologies

5. Energy

6. Environment

7. Transport

8. Socio-economic Sciences & Humanities

9. Space

10. Security

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Is it DG RTD or DG TREN ?

Open in call : FP7-ENERGY-2008-TREN-1

Open in call: FP7-ENERGY-2008-1

DG TREN (call open)

DG RTD (call closed)

References in the 2008 call

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What is demonstration?

.Basic research and pilot phases are finished

.Industrial led projects with significant potential impact on new binding targets before 2020

.Research only if industrial partners determine the need for research during demonstration (typically less than 20%)

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Predominant demonstration: Typical budget repartition for eligible costs

Demonstration about 70%

Research and Development including monitoring / Dissemination /promotion activities

up to about 25%

Management up to about 7%

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Timing of TREN Call 2008

.Call launched 29 April 2008. Info Days in Brussels

CONCERTO 3 - 4 April 2008

General 20 June 2008 .Deadline for submission 8 Oct 2008!.Evaluation Nov 2008. Info to proposers before end 2008

2009 call to be launched in July 2008

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Areas opened in 2008 (DG TREN)

.RES-electricity generation 42 M€*.Renewable Fuel Production 35 M€*.CCS/Clean Coal 20 M€*.Smart energy networks 5 M€.Polygeneration 5 M€*.CONCERTO 40 M€*

Ideally 20 projects will be supported for about 147 M€

* Indicative amount; depending on the quality of the proposals

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ACTIVITY ENERGY 2: Renewable Electricity GenerationArea Energy 2.2: Biomass.Topic Energy 2008.2.2.1: Enhancing

strategic international cooperation with Russia in the field of power generation from biomass.Topic Energy 2008.2.2.1: High efficiency medium-to-large scale electricity generation from biomass and waste


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ACTIVITY ENERGY 3: Renewable Fuel Production

.Topic Energy 2008.3.1.1: Biomethane from high moisture biomass(Area 3.1: first generation).Topic Energy 2008.3.2.2:Bioethanol from lignocellulosics(Area 3.2: second generation)


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0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Mill

ions

of €

as in 1980 as in 1985 as in 1990 as in 1995 as in 2000 in 2005

Energy RTD investment in the EU in 2005, if we were investing at the same rate as in ...

In 1980 we were investing 4 times morethan today

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More information

.Homepage DG Energy and Transporthttp://

ec.europa.eu/dgs/energy_transport/index_en.html

.FP7 Cordis homepage: www.cordis.europa.eu

http://ec.europa.eu/dgs/energy_transport/index_en.html



http://www.cordis.europa.eu/

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Financing bioenergy at National Level.Support systems for RES-electricity.Tax credits, Tax exemptions.Investment grants, loans, interest free loans

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.Existing support systems for RES-electricity» Feed-in tariffs» Green certificates» Tendering procedure» Tax incentives

National LevelSupport for RES-e

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National LevelSupport for RES-e

Renewable energy promotion policies in Member States from 2006 and onwards Feed-in Tariffs Austria, Cyprus, Czech Republic, Denmark, Esthonia,

France, Germany, Greece, Hungary, Ireland, Italy (only for PV), Latvia, Lithuania, Luxembourg, Malta (only for PV), Netherlands, Portugal, Slovak republic, Slovenia, Spain

Quota/Tradable Green certificates

Belgium, Italy (wind, bioenergy), Latvia, Poland, Romania, Sweden, UK

Investment grants or other tax incentives

Finland

Sales tax, energy tax, or VAT reduction

Belgium, Czech republic, Denmark, Estonia, France, Germany, Hungary, Netherlands, Sweden, UK

Public Investment, loans or financing

Austria, Denmark, France, Ireland, Latvia, Poland

Sources: Renewables 2007 (Global Status Report), Commission Staff Working Document Annex to the Impact Assessment

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National LevelSupport RES Heating/Cooling

• Support measures at National level: • Tax credits• Investment grants, loans, interest free loans

• Regulatory measure:• Obligations

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National LevelSupport Biofuels

• Support and regulatory measures at National Level:

•Tax exemptions

•Biofuels obligation

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Other Instruments

.European Investment Bank (EIB)» Financial products at reduced interest

rates» Direct loans for larger projects (> 25 Mill €

total cost)» Indirect loans for smaller projects.Other Banks

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Contents






6. Conclusions

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The European Commission strongly supports Bioenergy & biofuels with legislative actions & various programmes for technological advances & market penetration

Conclusions

High oil prices = high profile for bioenergy

Bioenergy’s progress is solid but not fastenough to meet objectives

Plenty more work to be done at all levels

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Thank you for your attention!

Documents

Bioenergy: Policy and Status