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Selection of the best -to-Bioenergy route for its implementation in the European sector. An Integrated Efficiency, Economic and Environmental Analysis

Anna Sues, Hubert J. Veringa Chemical Engineering and Chemistry, Environmental Technology Group TU/e Eindhoven University of Technology Eindhoven, North Brabant 5600 MB, the Netherlands

ABSTRACT amount of that can be later produced in Europe. This “re-drawing” is especially sensitive for the processes that Biomass availability is rather limited in Europe and, hence, it is require a relatively large scale in order to operate at a more of crucial importance to determine the optimal biomass-to- competitive price (e.g., Fischer-Tropsch or methanol plants). energy conversion pathway. This selection is somehow complex SNG and hydrogen production are profitable at medium plant as there could be antagonistic motivations coming from sizes, thus giving a combined national and “bio-borders” industrial stake-holders, politicians, scientists or the society. scenario. Similarly, since logistics costs have a major impact in Consequently, the aim of this paper is to present different final price, borders follow also a combined scenario. biomass-to-biofuels alternatives that follows various economic, Once the “bio-border” for different biofuels and biopower environmental and/or social drivers. Results are also compared production is determined, the next step is to identify which with European Directives 2001/77/EC and 2009/28/EC. In alternative is the best for the European energy market. General, maximizing bio-electricity over other biofuels turns Answering this question is somehow complex as the society, the out to be the best economical and environmental option. scientific community, industry, or the politicians have their own Combined with solar and wind energy, about 31% of the motivations. In this paper, biofuels or bioelectricity electricity production by 2020 could be renewable, i.e., 10 implementation within European countries is discussed under points higher than the target of Directive 2001/77/EC. If the several scenarios presented in Table 1. When co-firing is biomass is conducted to SNG production, fossil prioritized (i.e., scenarios I-A, II, VI), is replaced up to imports could be reduced by 1.63 EJ/yr in 2020, although this 10% in weight basis. In other scenarios, less coal is replaced as alternative implies higher costs and less CO 2 savings than the biomass is primarily consumed for biofuels production. previous bio-electricity solution. In case of promoting Fischer- Tropsch , the share of biofuels in transport will be 9.5%, Table 1 : Biofuels and bioelectricity scenarios, which takes into account which is slightly below the 10% share target of Directive preferences from industry, politicians, scientists or the society. Code Preference Description 2009/28/EC. H 2 is disregarded as feasible option for transport due to several technological barriers, although it would lead to A fraction of biomass is used for co-firing I-A Max. bioelectricity and the rest is send in new BIGCC (d) substantial CO 2 savings at a moderate price. Conversely, production (a) I-B All biomass is used in new BIGCC methanol results in the worst environmental solution as CO 2 emissions are larger than those of conventional fossil fuels. Potential biofuels A fraction of biomass is used for co-firing. II introduction in the The rest is consumed in new FT plants, medium-term and remainings for SNG production. Keywords: , biomass, , efficiency, Life Max. biofuels (b) Biomass is primarily consumed in new FT III Cycle Analysis (LCA), techno-economic evaluation. share in transport plants. The rest is used for SNG plants. Max. FT-diesel Biomass is primarily consumed in new FT IV 1. INTRODUCTION (Oil companies) plants. The rest is used for cofiring. Max. SNG Biomass is primarily consumed in new V Among all renewable technologies, biomass is the only source production SNG plants. The rest is used for cofiring. that could be used to produce biofuels for the transport sector. Our initial hypothesis is that maximal CO 2 reduction is obtained when a fraction of However, unlike wind or , biomass availability is Hypothetical (c) VI biomass is used for co-firing and the rest limited and, hence, it is of crucial importance to select the most max CO 2 reduction convenient biomass-to-biofuel conversion route. Nowadays, 2 nd for SNG plants. However, later analyses will confront our initial hypothesis. generation biofuels, and gasification technology in particular, Max. Hydrogen Biomass is primarily consumed in new H VII 2 are gaining interest for its implementation in the medium-term production plants. The rest is used for cofiring. future due to its potentially higher efficiency and lower cost and Max. MeOH Biomass is primarily consumed in new VIII CO 2 emissions. In this paper we present the evaluation of five production MeOH plants. The rest is used for cofiring biofuels (i.e., Syntethic Natural Gas (SNG), methanol (MeOH), (a): According to the European Directive 2001/77/EC, about 21% of the Fischer-Trospch fuels (F-T), H 2 and electricity) for their electricity must be produced from renewable sources by 2010 in EU25. introduction in the European Energy sector by 2020. The most convenient biomass-to-bioenergy technology will be selected (b): According to the European Biofuels Directive (2003/30/EC), the share of biofuels in transport should achieve the target of 10% by 2020. following technological, economic and environmental drivers. (c): The EU countries have committed to reduce In Europe, forest and agricultural residues are stochastically emissions during the first Kyoto commitment period 2008-2012 by 5% compared to the 1990 reference year (COM 2006). distributed, leading to definite areas where the concentration of biomass differs substantially among them. In some cases, those (d): “New plants” refers to new BIGCC (Biomass Integrated Combined areas do not correspond with the established country borders Cycle) plants that will operate on 100% biomass (i.e., no co-firing). and, hence, new “bio-borders” are suggested to maximize the

1

Figure 1 : Overview of the 5 biowaste-to-biofuels conversion routes (W and Q represent and heat flows, respectively) [1].

cleaning stages, the H 2:CO ratio is adjusted in a WGS (water- 2. BIOFUELS TECHNOLOGY SELECTION gas-shift) reactor by adding a specific amount of superheated steam. Outlet gases then undergo a series of catalytic reactions The five different biomass-to-biofuels routes have been in a specific reactor for each biofuel. Later stages of the process modeled in Aspen Plus. The corresponding diagram block of comprise upgrading and final compression in order to achieve each process is depicted in Figure 1. In all cases, pre-treatment the specifications imposed by the market. is required to adjust particles size and moisture content to 10%. Gasification is the core operation unit for the 5 biofuels chains For the electricity generation process, leaving the although the working conditions, the oxidizing agent (i.e., gasifier is cleaned and then send to a combine Brayton-Rankine steam, air or O 2) and its design are different among them. After cycle. A single expansion turbine is used for the Brayton cycle gasification, biomass is converted into the so-called syngas, a where exhaust gases are expanded from 1200 oC and 15 bar to 1 o mixture of mainly CO and H 2, although other gases such as bar and ~ 605 C. This remaining hot stream is used to provide CO 2, CH 4, C 2H6 or C 2H4 are also produced. In subsequent units, part of the heat required for the , in which three undesired by-products (mainly H 2S, NH 3, and HCl) are removed steam turbines are operated with inter-heating. In this cycle, in order to avoid deactivation of the catalysts used downstream, steam is expanded from 200 bar to ~ 0.07 bar. damage engines, boilers or turbines, as well as to minimize SO x and NOx formation when burning remaining unconverted gases. Moreover, for a better overall process efficiency, heat supply o In all the production chains, H 2S is removed at 55 C and 1bar in and demand are carefully matched so that more high quality a MDEA scrubber system, and the solution is regenerated in a heat is left to produced superheated steam that will be later used stripping column working at 110oC and 2 bar. MDEA is for electricity production (Rankine cycles), steam gasification, selected due to its low energy requirement for regeneration and biowastes drying, and H 2:CO adjustment in the WGS reactors. higher selectivity over H 2S compared to CO 2. In fact, at this In particular, a considerable amount of heat is recovered after stage of cleaning, CO 2 removal is not desired as this gas is a gasification as the syngas needs to be cooled down prior to reactant for some downstream catalytic reactors. NH3 is cleaning and compression stages. Another source of heat is removed in a subsequent unit using a H 2SO 4 solution. HCl and taken during cooling of methanation and Fischer-Trospch or other halogens can be removed by injecting sodium or calcium- methanol reactors. However, extra is still needed to cover based powdered absorbents into the gas streams and by the energy demand of the biofuels plant. In previous studies, we removing them in the de-dusting stage (e.g., cyclones). After the have evaluated to burn either an extra amount of biomass or

2 natural gas to meet energy requirement of the plants. Our results show that the best configuration is to burn an extra amount of 3.2 Model application to Europe biomass and take electricity from the grid. The multidimensional model of previous section 3.1 is applied to Europe to select the best scenario of Table 1. For that purpose, several stages are needed (see Figure 2, right-hand 3. OWN MULTIDIMENSIONAL “3-E” MODEL: sequence). Firstly, forestry and residues availability INTEGRATION OF EFFICIENCY, ECONOMIC within 24 European countries is calculated from different values AND ENVIRONMENTAL PARAMETERS found in literature [2-7]. Subsequently, total biofuel and/or bioelectricity generation in Europe is determined by applying 3.1 Model definition efficiency values from our model. Produced biofuels can Sustainability of a process is rather difficult to evaluate and substitute part of the fossil fuels consumption by 2020, although quantify as many factors are involved and they are also given in their share will be different for each scenario in Table 1. In any different units. For instance, environmental impact is measured case, fossil energy is still needed in order to meet the energy in ppm (or gCO 2eq/kg biofuel for the case of global warming demand by 2020, whose values have been stipulated in the evaluation), whereas production costs are given in €/GJ biofuel , report of Mantzos et al [8]. In particular, we assume that and efficiency is calculated as the ratio of energy output divided biofuels and bioelectricity can be introduced in 3 sectors: by the energy input (i.e., MW output /MW input ). Hence, conversion factors are required if we intend to give one unique parameter in • Electricity production from coal (i.e., 3.77 EJ/year ). This order to be able to communicate with scientists, legislators and figure implies that about 8.34 EJ/yr of coal is consumed. economists at once. • Natural gas consumption for several uses (e.g., electricity, heating, or other industrial applications), which accounts for In our model, mass and energy balances from Aspen Plus 25.90 EJ/year simulations are used to calculate exergetic and energy efficiency • consumption in the road transport, which sums of the 5 biofuels conversion routes (i.e., SNG, MeOH, FT, H 2 and electricity), as shown in the left-hand sequence of Figure 2. 15.10 EJ/year . This figure includes public road transport, Aspen Plus simulations are coupled to Aspen Icarus in order to private cars, motorcycles, and trucks. calculate the biofuels production price “ex-works’. This price is determined by fixing and investor internal rate of return (IRR) Optimal biofuels plant scales are deducted from the iteration of of 12%, and with 50% of capital leverage (i.e., 50% of the TCI our model in section 3.1. This parameter, together with biomass is borrowed from banks). Final end-user price is obtained by availability across Europe, fixes the number of plants that could adding logistic and distribution costs. Those calculations are be built in each scenario in Table 1, which in turn, allows the iterated for different plants sizes (i.e., from 1 to 5000 MW fuel ) calculation of total capital investment (TCI). Following the and 24 European countries in order to determine the optimal profitability analysis of our model (i.e., IRR equal to 12%), final plant scale and location for each biofuel. In the last stage, end-user prices for each biofuels and country are obtained. environmental impact of each configuration is integrated into However, since biofuels prices are always higher than the economic evaluation by calculating an value (i.e., conventional fossil fuel prices, governmental subsidies would €/ton CO 2 that would equalize biofuels and conventional fossil be needed to equalize prices and do not charge the final fuel price). consumer. An alternative to public assistance is to calculate an ecotax (i.e., €/ton CO 2), which would notably penalize fossil fuels as their CO 2 emissions are notably higher.

4. RESULTS

Results are presented following the structure of previous section 3. Hence, the first section of this paper is dedicated to the individual values for each biofuel, whereas the second part includes results of the different scenarios in Table 1.

4.1 Specific biofuels efficiency, final price and ecotax Figure 3 depicts the final biofuel ‘end-user’ price for a specific country and at different plant sizes. However, it should be mentioned that the represented biofuels prices accounts only for Austria, which is in the “average” side together with Eastern countries. In effect, biofuels production turns out to be economically more competitive in Southern, Baltic countries and UK, biofuels, whereas it is notably more expensive in Northern and Scandinavian states. This Figure 3 is completed by representing the effect of scale on the efficiency of the processing plants (i.e., right y-axis). As observed, both parameters are intrinsically connected as higher efficiencies are translated into lower Total Production Costs (TPC). Moreover, according to the William’s equation, TCI does not follow a straight line when increasing the plant size. On the contrary, it is Figure 2: Schematic representation of our model. represented by an exponential relationship with a scaling factor

3 in the range of 0.4 to 0.8. Conversely, logistics are directly When biomass availability is taken into account, it is observed dependent on the scale, whereas distribution costs are assumed that few countries have enough biomass to feed any biofuel to be constant (i.e., 3.61 €/GJ SNG , 3.44 €/GJ FT , 4.32 €/GJ FT , 10 plant at its optimal production scale. This assertion is especially €/GJ H2 , 0.01€/GJ elec ). Figure 3 also identifies the optimal plant sensitive for FT and MeOH production as both biofuels require scale for each biofuel. As observed, electricity and SNG large amount of biomass to run plant scales of 1000 MW fuel . In production is more profitable at lower sizes (i.e., 100 and 200 effect only Spain, France, Italy, Austria, Germany, Poland, MW fuel respectively), followed by H2 (i.e., 500 MW H2 ), whereas Sweden, Finland, UK, Hungary and Romania can feed either MeOH and FT-fuels generation require larger plants (i.e., 1000 wood or straw-based biofuels plants using own biomass sources MW fuel ). Comparison among biofuels reveals that SNG and (see Figure 5 and 6). Alternatively, biomass could be also electricity prices are on the lowest side (i.e., 19 and 23 €/GJ imported from nearby regions, as done in next section 4.2. respectively for Austria). Conversely, FT-fuel, MeOH and H 2 However, in some cases, CO 2 emissions could exceed the are more expensive and yield close values (i.e., 26, 27 and 28 threshold of fossil fuels. €/GJ). However, it should be mentioned that H2 price is much higher than SNG due to its intensive distribution costs. Similar conclusions can be drawn in terms of exergetic efficiency. In effect, SNG and electricity production is more efficient (i.e., up to 45.5% for both biofuels), followed by MeOH and FT (i.e., up to 43.9%). Hydrogen efficiency (i.e., 42.5%) is notably penalized by the compression requirements of the pipelines distribution system. Results for the rest of European countries follow similar trends, although, as aforementioned, quantitative values are different for each country. Same analysis is done for straw residues in Figure 4, where it is observed that prices are always higher due to lower efficiencies and larger pre-treatment and logistics costs.

Figure 5. The colors identify that Figure 6. The colors identify that Effect of plant size on final END-USER price and exergetic efficiency 140 €/GJ 48% at least 1 plant can be fed with at least 1 plant can be fed with ‘national’ forest residues. ‘national’ straw residues. 46% 120 €/GJ 44% For the case that biomass is not imported, relative ecotax (i.e., 100 €/GJ €/ton CO 2) are found in the range presented in Table 2. This 42% ecotax does not correspond to the Carbon taxes that are levied 80 €/GJ 40% from companies exceeding the limits of CO 2 emissions. In fact, is a ‘virtual’ value that we have calculated in order to charge 60 €/GJ 38% CO 2 emissions and equalize biofuels and fossil fuels prices.

36% efficiency Exergetic Hence, it should be added in top of production costs. Calculated 40 €/GJ 34% ecotax values are notably high as biofuels and fossil fuels price

Biofuel production price EX-WORKS price production Biofuel 20 €/GJ difference is rather substantial. Bio-electricity production turns 32% Plant size out to be an exception as, for some countries, bio-based price is 0 €/GJ 30% cheaper than coal-based power price (i.e., all countries except W W W Austria, Bulgary, Baltic states, Sweden, Finland and France). MW MW M MW MW M M 0 MW 0 0 0 0 0 0 0 0 1 200 MW 3 400 500 MW 6 700 MW 8 900 ,000 1 Concerning SNG production, Sweden is the only country where Price-SNG Price-H2 Price-FT Price-MeOH Price-Elec bio-based SNG is cheaper than fossil natural gas. Eff-SNG Eff-H2 Eff-FT Eff-MeOH Eff-Elec

Figure 3: Final prices and exergy efficiency for wood-based biofuels. Table 2: Ecotax ranges for wood and straw-based biofuels (€/ton CO 2). Effect of plant size on final END-USER price and exergetic efficiency 140 €/GJ 48% Biofuel / Feedstock  Forest wastes Straw Electricity 0 to 53 0 to 32 46% (*) (*) 120 €/GJ SNG 51 to 208 71 to 373 44% FT-fuels 152 to 420 114 to 640 100 €/GJ MeOH 198 to 675 215 to 900 42% H2 9 to 181 8 to 233

80 €/GJ 40% (*) Ecotax for Sweden is 0 as SNG is cheaper than fossil gas.

38% 60 €/GJ On the other hand, the LCA analysis reveals that less CO 2 is emitted (in terms of kg-eq CO 2/GJ fuel ) during SNG production, 36% efficiency Exergetic 40 €/GJ followed by electricity and H2 generation. Notably higher CO 2 34% emissions are released for FT and MeOH mainly because a Biofuel production price EX-WORKS price production Biofuel 20 €/GJ 32% larger amount of biomass needs to be transported and biofuel Plant size distribution is done by means of trucks, which consume fossil 0 €/GJ 30% diesel. In countries where biomass availability density is (i.e., W W W W W M MW M M MW M M 2 0 MW 0 0 0 0 0 0 0 0 kton/km ) is scarce, CO 2 emissions exceed those of the 1 200 MW 3 400 500 MW 6 700 MW 8 900 ,000 1 Price-SNG Price-H2 Price-FT Price-MeOH Price-Elec corresponding fossil fuel. In effect, wood-based MeOH and/or Eff-SNG Eff-H2 Eff-FT Eff-MeOH Eff-Elec FT production in Sweden and Finland release more CO2 than Figure 4: Final prices and exergy efficiency for straw-based biofuels. fossil diesel as biomass collection distances are considerable.

4 Same observation applies for straw-based MeOH and FT The third scenario ‘II’ refers to maximizing the introduction of generation in Poland, Germany and Spain. This fact could be biomass into the energy market with minor changes in the actual minimized by importing biomass from nearby regions, as infrastructure. In this case, about 10 wt% of coal consumed in suggested in section 4.2. existing coal-fired power plants is replaced by the corresponding straw amount. The remaining biomass fraction is 4.2 Biofuels introduction into the European Energy market then used for new bio-based FT-plants which would operate at The model of Figure 2 is applied in this section to determine the optimal scale of 1000 MW fuel . In scenarios ‘III’ and ‘IV’ maximum bioenergy production when all available forest and FT-fuels production is prioritized and biomass leftovers are straw residues are consumed, and following the scenarios of used for either SNG or cofiring respectively. As expected, Table 1. However, values of each scenario correspond to the higher biofuel share is obtained in the III and IV (i.e., 9.5%) as maximum theoretical production that could be achieved if all more biomass is available for FT-production. The 9.5% biofuels available biomass could be purchased. In effect, unlike solar share is slightly behind the 10% European target established in and wind energy, biomass is normally owned by individuals or the Directive 2009/28/EC. Maximal SNG production, at the holdings, which ultimately decide its final application and price. optimal scale of 200 MW SNG , is obtained in scenario “VI” (i.e., SNG share of 6.3%). For this analysis, all available wood and For an optimal utilization of biomass sources in electricity straw residues are primarily converted into SNG plants, whereas generation, two ‘ short-terms’ scenarios are analyzed. In the first the leftovers are used in co-firing stations. In the scenario ‘V’ , case (i.e., scenario I-A), it is assumed that 10 wt% of the coal preferences are exchanged and, thus, less biomass is ready for consumed in power plants is substituted by the corresponding SNG production (i.e., SNG share of 5.5%). If H2 and MeOH amount of straw, and the remaining part together with forestry (i.e., scenario ‘VII’ and ‘VIII’ ) are produced for road transport, residues are used in potentially new BIGCC plants operating at the corresponding biofuels shares attain 10.3 and 5.6 % the optimal scale of about ~100 MW el . Electrical efficiency ( ηel ) respectively. The share of H2 is notably high due to the expected of co-firing plants is negatively affected by 4% when better efficiencies of cars (FCV). However, it should be introducing 10 wt% of straw. Efficiencies of new bio-based mentioned that the introduction of H 2 in the energy market is BIGCC stations attain lower values, i..e, 42% and 36% for predicted for a long-term future. Therefore, is highly probable wood and straw (see Figure 3 and 4). In the second case that biomass would be already consumed in other processes, (scenario ‘I-B’), biomass sources are fully consumed in thus, reducing the possibility of producing bio-H2. potential new BIGCC plants. Hence, in this case, no co-firing is envisaged and energy efficiencies of coal plants are not affected When comparing the share of in the total (i.e., 45.2% [8]). Table 3 presents the share of renewable energy (see last column in table 3), it is observed that MeOH, electricity generated in these 2 scenarios. In both tables, “ x” and followed by maximal electricity (i.e., ‘I-A’ and ‘I-B’) and FT- “y” represent the wood and straw fraction that is used in co- fuels production (i.e., ‘II’ to ‘IV’) lead to the lowest “total firing plants. By definition, in scenario ‘I-B’, “x” and “ y” renewable share”, whereas SNG attain the highest value. fractions are both 0%. In all cases, final electricity outcome However, when taking into account that a diesel-fuelled car has (renewable + fossil) should at least equal 3.77 EJ/yr, which an efficiency of about 22%, and natural gas-fuelled power accounts for the predicted coal-based electricity generation by plants work at less than 60% efficiency, the conclusion is then 2020 [8]. different, as more “useful” renewable energy is produced in the ‘I-A’ and ‘I-B’ cases. On the other hand, a LCA analysis Table 3: Share of renewable energy (i.e., bio-electricity or biofuel reveals that the maximal renewable share in scenario ‘ V’ does (a) production divided per total energy ) for the each scenarios of Table 1. not correspond to the maximal CO 2 savings. % renewable energy in Biomass in Scenarios natural road co-firing electricity total Comparison of CO 2 Emissions & Savings of each scenario gas fuel I-A x=0,y=26% 28.9 % 0.0% 0.0% 3.0% I-A 4710 38 391 I-B x=0,y=0 34.3 % 0.0% 0.0% 3.0% II x=0,y=26% 5.1% 0.4% 8.1% 3.4% I-B 4631 47 461 III x=0,y=0 0.0% 0.3% 9.5% 3.3% II 4952 100 87 IV x+y=5.7% 1.2 % 0.0% 9.5% 3.3% V x+y=1.9% 0.1 % 6.3% 0.0% 3.7% III 5001 108 29 VI x=0,y=26% 5.1 % 5.5% 0.0% 3.7% VII x+y=4.6% 0.3 % 0.0% 10.3% 3.5% IV 4994 108 37 VIII x+y=6.3% 1.1 % 0.0% 5.6% 2.0% (a) Total energy equals to 3.77 EJ/yr of coal-based electricity, 25.9EJ/yr V 4999 53 86 of natural gas and 15.1 of fossil road fuels by 2020 in Europe. VI 4941 53 145

According to results from Table 3, the share of renewable VII 4880 61 198 electricity produced from biomass (i.e., 34.3%) is the largest for the second scenario ‘I-B’ , in which no co-firing is planned. In VIII 5011 130 effect, notably less coal is needed to fulfill total power outcome of 3.77 EJ/yr. Conversely direct co-firing (i.e., ‘I-A’) has the REF-fossil 5,139 limitation of 10% coal substitution by biomass. Combined with 00 00 00 ,4 ,7 ,0 solar and wind energy, about 31% of the electricity production 4,300 4 4,500 4,600 4 4,800 4,900 5 5,100 5,200 by 2020 could be renewable, i.e., 10 points higher than the Mton CO 2 / year target of Directive 2001/77/EC. CO2 Emissions from fossil fuels CO2 Emissions from bioenergy CO2 Savings Figure 6: CO 2 emissions (from fossil & biofuels) and savings.

5 Average biofuel price as a function of the scenario 5. CONCLUSION & DISCUSSION 35 €/GJ

Individual biofuels evaluation reveals that SNG and electricity 30 €/GJ yield the highest exergetic efficiencies when using wood as feedstock (i.e., ~ 45.5%). This statement is translated into the 25 €/GJ lowest biofuel prices (i.e., 19-27 and 23-34 €/GJ for SNG and electricity respectively in Austria) and required ecotax. 20 €/GJ However, when the analysis is extended to consume all available forest and straw residues in Europe for energy 15 €/GJ purposes, bioelectricity production turns out to be the best alternative from an economic and environmental point of view. 10 €/GJ In effect, about 391 to 461 Mton CO 2 are saved each year when biomass is used in either co-firing or new BIGCC plants (i.e., 5 €/GJ I-A I-B II III IV V VI VII VIII ‘I-A’ scenario) or all biomass for new BIGCC plants (i.e., ‘ I- Road fuel Electricity Natural gas / SNG B’) respectively. The corresponding biofuels and fossil prices Average REF-fossil-electricity REF-fossil-N.gas differences are also the lowest for both scenario, i.e., 3-4 Billion REF-fossil-road fuel REF-fossil-average Figure 7 : Average fossil/biofuel prices for each scenario. €/year respectively, with ecotax lying in the range of 7-8 €/ton CO . It is also observed that co-firing is preferred over extra Comparison based on biofuels/fossil fuels price difference (left-axis) 2 & ecotax (right-axis) biofuels production when the aim is to increase CO 2 savings. 30 700 Extra payment (€/yr) ∞∞∞ Ecotax 25 On the other hand, if bioelectricity is summed to solar and wind 600 25 energy, about 31% of the electricity production by 2020 could 22 be renewable, i.e., 10% points higher than the target of 500 20 Directive 2001/77/EC. In case of prioritizing FT-fuels ) 2 production (i.e., scenarios ‘ III ’ or ‘ IV ’), the share of biofuels in 400 transport will be 9.5%, which is slightly below the 10% share 15 target of Directive 2009/28/EC. 300 10 CO (€/ton Ecotax 200

Extra payment (Billion €/year) (Billion payment Extra REFERENCES 6 3 5 4 3 4 3 3 100 1. Sues, A., M. Jurascik, and K.J. Ptasinski, Exergetic 111 124 296 154 8 7 40 Evaluation of 5 Biowastes-to-Biofuels Routes via 0 29 0 I-A I-B II III IV V VI VII VIII Gasification Energy, 2009. Submitted for revision . 2. Asikainen, A., et al., Forest Energy Potential in Europe Figure 8 : Annual extra payment (grey bars) due to biofuels and fossil (EU27) , in Working Papers of the Finnish Forest Research price differences. Calculated ecotax (€/ton CO ) is given by black bars. 2 Institute . 2008, Finnish Forest Research Institute, Joensuu In effect, as shown in Figure 6, bio-electricity production is a Research Unit: Helsinki (Finland). better alternative from an environmental point of view as ~ 361 3. EEA, How much bioenergy can Europe produce without harming the environment? 2006, European Environment to 491 Mton CO 2 are avoided annually. The ’ V’ scenario is now the third best candidate with CO savings of 145 Mton/yr. Agency (EEA): Copenhagen (Denmark). 2 Bio-Energy's role in the EU Energy Average scenarios biofuels/fossil fuel prices are also compared 4. Siemons, R., et al., in Figure 7, where biofuel prices are assumed to be free from Market. A view of developments until 2020 . 2004, BTG taxation. Annual extra payment, which is due to difference in biomass technology group BV: Enschede (the biofuels and fossil prices, is given by grey bars in Figure 8. As Netherlands). Biomass observed, average electricity price difference is notably higher 5. Nikolaou, A., M. Remrova, and I. Jeliazkov, in the “I-B” than in the ‘ I-A’ scenario. This extra costs account availability in Europe , in Lot 5: Bioenergy’s role in the EU Energy Market for 3-4 Billion € annually for the 24 European countries. In . 2003, Centre for Renewable Energy effect, bio-based electricity generation, especially when Sources (CRES). BTG Czech Republic s.r.o. ESD Bulgaria produced in new BIGCC plants, is more expensive than Ltd: Pikermi Attiki (Greece). conventional coal power production. Black bars of Figure 8 6. Wakker, A., et al., Biofuel and bioenergy implementation scenarios: VIEWLS WP5, modelling studies represent the ecotax that would equalize fossil and biofuels 2005, Energy prices (in €/ton CO ). In this case, the “ I-B” scenario implies Research Centre of the Netherlands (ECN). Chalmers 2 University of Technology: Petten (the Netherlands). the lowest ecotax (i.e., 7 €/ton CO 2), closely followed by the “ I- A” case (i.e., 8 €/ton CO ). H would be the subsequent second 7. de Wit, M. and A.P.C. Faaij, Biomass Ressources Potential 2 2 and Related Costs , in REFUEL Work Package 3 . 2008, best alternative although, as aforementioned, H 2-fuelled FCV will not be commercialized in the coming 10-20 years. Copernicus Institute. Utrecht University: Utrecht (the Moreover, prioritizing co-firing over extra biofuels production Netherlands). is a better solution (i.e., “ II ” versus ‘ III ’ and ’ IV ’ scenarios for 8. Mantzos, L., et al., European Energy and transport Trends to 2030 (Appendix2) Summary Energy Balances and FT, and “ VI ’ versus ‘ V” for SNG). Methanol (i.e., ‘VIII’) is , in Indicators completely disregarded as not only its price is high, but also it . 2003, European Comission. Directorate General pollutes more than fossil diesel due to the low efficiency of for Energy and Transport: Luxembourg (Luxembourg). MeOH-fuelled FCV.

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