The growing concerns about Net-Zero Economy have resulted in favorable policies and regulations for renewable energy, which has been the key factor driving the growth of the biomass market. But are EU policies up to date with technology, needs and reality?

Can Biomass be used in a Net-Zero Economy?

The term biomass includes all organic matter of plant or animal origin that can become sources of energy. This renewable power market size is expected to reach USD 203.61 billion by 2030, with a CAGR of 6.0% over the forecast period according to the GVR.

New political context

The Russia’s invasion of Ukraine is inextricably linked to the global energy crisis, and Europe is seeking at solutions to reduce the need for their Russian imports.

Russian energy supplies are particularly important for Europe, which receives around 70% of the country’s gas exports and half of its oil exports.

Following this crisis, some countries are calling to increase the national supply of fossil fuels and German government is aiming to accelerate the transition to a 100% renewable electricity system by 2035. In that sense, Ukrainian crisis could accelerate the race to the renewable energy supply that includes biomass components.

Can Biomass be used in a Net-Zero Economy?

Covid

Before this energy crisis, the COVID-19 pandemic hampered the growth of the global biomass market due to supply chain disruptions, which led to delays for some projects. Decreased electricity demand from non-essential commercial and industrial end users due to shutdown of operations during lockdown.

These factors have resulted in delays in the construction of new biomass power plants and reduced power supply from existing biomass power plants. Solid biofuel has emerged as the dominant feedstock segment in the market owing to its easy availability. Moreover, it is simpler to use than liquid biofuel and biogas in power generation applications.

The combustion technology segment accounted for the largest market share in 2021, in terms of revenue. The growth of this segment can be attributed to lower costs of combustion technology than anaerobic digestion and gasification technologies. Europe has emerged as the major regional market owing to the presence of supportive policies and plans, coupled with the announcement of the phasing-out of coal-based power plants by the leading European countries, such as the U.K., Germany, and France.

In terms of revenue, the solid biofuel segment accounted for the dominant revenue share in 2021 and is projected to grow rapidly in Europe, while Germany dominating the European market and accounting for the maximum revenue share in 2021.

Therefore, biomass leaders (environmental, waste and energy groups) will be seeking to increase the number of managed sites in the next coming years, in order to develop their activity and achieve economies of scale. Targeting a diversification of sources of supply such as catering bio-waste, sludge, wood by-products, etc., could represent sustainable input options.

Major energy leaders and operators are developing other forms of biomass recovery (compost, biomethane, solid recovered fuels, etc.)

Can Biomass be used in a Net-Zero Economy?

Big picture of biomass use across the EU economy

EU policymakers and business leaders alike need to revisit their plans for future biomass use to ensure they are sustainable and economically viable. 

Biomass is scarce and valuable. It cannot viably be used, at scale, in all the applications envisioned by europe. Continuing current trends (a 150% increase in bioenergy since 2000) will hit limitations, as current plans use 40–100% more biomass than what is likely to be available. Decision makers thus need to prioritize the uses with the highest economic and societal value. 

In doing so, they need to account for a rapidly evolving technology landscape, where opportunities for electrification, batteries, green hydrogen, and new chemistry rapidly expand the options available. And they need to step away from seeing biomass through a lens of bulk contributions to aggregate energy targets, focusing instead on areas where the unique properties of biomass make the greatest contribution to a net-zero economy. 

Material economics study

The study materiale conomicsEU Biomass use in a Net-Zero Economy – finds that materials uses of biomass – for timber, fibre, and chemicals – which are often overlooked, will increase in value in a transition to net-zero emissions.

Bioenergy, meanwhile, will be less a high-volume and drop-in replacement of fossil fuels.

Instead, bioenergy will need to gravitate towards specific high-value niches – such as hybrid solutions for high-temperature industrial heat; integrated value propositions in waste and carbon management services; and aviation fuels, until or unless hydrogen and carbon capture costs drop to levels where synthetic fuels become cheaper.

And even for these niches, there will be stiff competition from alternative solutions in the long term. Current EU policymaking and many company strategies for bio-mass use are based on expectations that, in many cases, rely on outdated knowledge from 10 to 15 years ago. Technology and markets have moved quickly, as has our view of the future of natural systems. An update therefore is needed.

Can Biomass be used in a Net-Zero Economy?

Article: Joana Foglia

Can Biomass be used in a Net-Zero Economy?