UK Biomass Strategy

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It also builds on the aims, objectives and vision in the 2004 Defra/DTI strategy for non-food crops and uses. The Biomass Strategy acknowledges the importance of fuels sourced from biomass in tackling climate change. Biomass will have a central role to play in meeting the EU target of 20% renewable energy by 2020. The Climate Change Bill, published in draft in March 2007, sets out a proposed UK target of at least 60% cuts in carbon dioxide emissions by 2050 and a strong new system of carbon budgeting. We need to explore every avenue for achieving these cuts in emissions in sustainable ways over the decades ahead.

Executive Summary

This strategy, published with the Government’s Energy White Paper¹, meets the commitment made in the Energy Review (2006) and in the Government’s response to the 2005 Biomass Task Force Report and brings together current UK Government policies on biomass for energy, transport and industry. It also builds on the aims, objectives and vision in the 2004 Defra/DTI strategy for non-food crops and uses. The Biomass Strategy acknowledges the importance of fuels sourced from biomass in tackling climate change. Biomass will have a central role to play in meeting the EU target of 20% renewable energy by 2020. The Climate Change Bill, published in draft in March 2007, sets out a proposed UK target of at least 60% cuts in carbon dioxide emissions by 2050 and a strong new system of carbon budgeting. We need to explore every avenue for achieving these cuts in emissions in sustainable ways over the decades ahead.

This strategy reflects UK targets and policy objectives, and acknowledges that separate strategies have been or are being developed to address the specific conditions that apply in Scotland, Wales and Northern Ireland.

Biomass is renewable and generally has low carbon characteristics. Where biomass is produced and processed with due regard to sustainability and carbon savings, it can be carbon-neutral (the CO₂ released when it is used to create energy can be offset by the CO₂ it consumes when growing). Biomass is also very versatile and can be used as fuel across the energy spectrum for electricity, heat and transport as well as the production of industrial material. At current usage levels biomass can be considered as an untapped resource.

The Government’s strategy for biomass is intended to:

realise a major expansion in the supply and use of biomass in the UK
facilitate the development of a competitive and sustainable market and supply chain
promote innovation and low-carbon technology development so biomass can deliver relatively higher energy yields
contribute to overall environmental benefits and the health of ecosystems through the achievement of multiple benefits from land use
facilitate a shift towards a bio-economy through sustainable growth and development of biomass use for fuels and renewable materials
maximise the potential of biomass to contribute to the delivery of our climate change and energy policy goals: to reduce CO₂ emissions, and achieve a secure, competitive and affordable supply of fuel.

Biomass production

Delivery of this strategy will require a major expansion of biomass use and sustainable supply. It is acknowledged that increasing the supply of biomass will have implications for land use, biodiversity, landscape and a range of other environmental factors. We believe that a significant increase in sustainable UK biomass production, taking full account of the lessons we have learnt from more traditional forms of agriculture and our emerging understanding of how ecosystems work, is achievable. We will seek to deliver an expansion of biomass production in a way which is consistent with an enhanced, sustainable approach to land management. This will deliver multiple environmental benefits and enhance the health of ecosystems. We have looked carefully at the supply side. We believe there is significant potential to expand the UK supply of biomass without any detrimental effect on food supplies and in a sustainable manner by:

sourcing an additional 1 million dry tonnes of wood per annum from currently unmanaged woodland in England, and from increasing the recovery of wood for energy from managed woodland and other sources of wood waste products across the UK
increasing the amount of perennial energy crops produced in the UK to meet market demands – with the potential to use up to a further 350,000 hectares across the UK by 2020². This brings the total land availability for biofuel and energy crops to around 1 million hectares, equivalent to 17% of total UK arable land
increasing supply from organic waste materials such as manures and slurries, certain organic wastes, source separated waste biomass and waste derived Solid Recovered Fuels (SRF)

By expanding existing biomass supplies in this way we estimate the potential future biomass resource in the UK to be a total of approximately 96.2 TWh (8.3 Mtoe). If it is assumed UK biofuel crop production can supply half of the 5% (by volume) target for 2010³ this gives a total predicted theoretical biomass resource level in the UK of around 10.0 Mtoe⁴.This compares with a total UK energy need of currently 165 Mtoe⁵. These estimates could be considered conservative.

It is clear that imports will continue to play a significant role in meeting UK energy needs, particularly for transport fuels and co-firing (electricity produced from fossil fuels co-fired with biomass). It is estimated that current annual imports account for the equivalent of some 54TWh. This figure is expected to grow.

We are keenly aware of the environmental risks from unsustainable production and damaging changes of land use. We fully support the EU approach of linking potential increases in biofuel targets to sustainability criteria. It is acknowledged that increasing the supply of biomass will have implications for land use, biodiversity, the environment and the landscape. Imports will have an important role to play in meeting the demand for biomass this strategy will create and here we are taking steps to ensure sustainable practices are at the heart of our policies.

Future decisions on biomass production will require a long term view. Climate change is expected to have an impact on the biomass that will flourish in the UK over the next 50-60 years. Some existing biomass sources will cease to be viable in certain locations while other new species can be introduced. Other sources of biomass such as certain wastes are suitable for energy recovery, including through anaerobic digestion and have an increasingly important role to play. This will expand biomass energy production and reduce the carbon impact of waste management.

Innovation to improve efficiencies

Biomass supply can also be increased through technology innovation, which can improve the efficiency of the energy conversion and reduce the delivered amount and cost of the fuels used. The technology used for heat and power generation is primarily well-established combustion technology. This can provide heat and power reliably but at low efficiencies when compared with equivalent largerscale fossil fuel generation technologies. Further research is required into potentially more efficient energy generation technologies, such as gasification and pyrolysis.

Both Government and industry are already investing strongly in energy innovation. This includes fundamental research through to the deployment of technologies. This investment is set to rise. A new public/private sector joint venture, the Energy Technologies Institute, will be established. This will have a budget of up to £1bn over the next decade for R&D in low carbon energy technologies and demand management. A new Environmental Transformation Fund (ETF) is also being established to invest in low-carbon energy, including the demonstration and deployment of energy technologies such as bioenergy.

Supply chain development

We are committed to the ongoing development of biomass supply chains in conjunction with action to develop the bioenergy market. We are working closely with the Regional Development Agencies (RDAs) on the development of regional carbon targets. The RDAs also have a key role to play in building the partnerships needed to develop supply chains as an integral part of the regional strategies for renewable energy development. This will facilitate the development of supply chains best suited to local needs and resources.

Biomass for energy

This strategy also emphasises our wish to increase the use of biomass as an energy source, given its importance in the transport, heat and electricity sectors. We have looked across the different energy sectors in order to establish which represents the most effective use of biomass raw materials. Our analysis shows a clear hierarchy of use in terms of cost of carbon saving (£/tonneC):

biomass heating is the most effective form of bioenergy, particularly in industrial and commercial applications
biomass combined heat and power (CHP)
co-fired electricity in large fossil fuel plants
dedicated biomass power plant
transport biofuels

Incentives are already in place to support the use of biomass as a renewable fuel source for heat, electricity, and transport. The nature and level of incentives vary between the different sectors, and include the Renewables Obligation (for electricity supply), the Renewable Transport Fuel Obligation, and grants towards the capital costs of heat, and CHP.

One conclusion of this strategy could be that these incentives should be reordered to reflect this hierarchy of use of biomass. However, such an interpretation would be overly simplistic as it does not take into account the relative importance of biomass fuel sources in delivering climate change goals and targets. For example, despite their higher cost of carbon, transport biofuels are essential to carbon savings in the transport sector for which there are few other options in the short to medium term.

The RTFO, when introduced, will mean that by 2010, 5% of fuels sold on UK forecourts will come from renewable sources. We are committed to increasing the level of the planned RTFO beyond 5% after 2010/11, but only if the following conditions are met:

biofuels are produced in a sustainable way delivering maximum carbon savings with minimum adverse environmental impacts
biofuel blends higher than 5% will not lead to mechanical problems in vehicles
costs to consumers and the wider economy will be acceptable

The hierarchy can nevertheless be applied in part. It will inform consideration of renewable energy targets, and the revisions currently being proposed to the Renewables Obligation, in particular the new system of banding support levels to promote emerging energy technologies. It also points to the need for work on whether further measures can be developed to support renewable heat (and cooling), utilising biomass sources, which the Government undertakes to do.

Defra expenditure on non-food crops will be increased from 2008/2009. The exact details will be determined in the Comprehensive Spending Review (CSR). Funding for Defra’s 5-year Bioenergy Capital Grants Scheme and details of the joint DTI/Defra Environmental Transformation Fund (ETF) will also be determined through the CSR.

We intend to monitor delivery of this strategy in collaboration with all stakeholders including farming, industry and environmental interests, regional and local bodies and planners. This will build on the indicators established to monitor the strategy for non-food crops and uses.

Introduction

1.1 The work of the Biomass⁶ Task Force highlighted the need for a coherent Biomass Strategy. Publication of this strategy addresses that need and meets the commitment made in the Government’s response to the Task Force Report⁷ and in the UK Energy Review.⁸ It also takes account of the Government response to the two year review of the strategy for non-food crops with these activities being brought together under a single renewables programme.

1.2 We agree with the Task Force’s conclusion that biomass was an under-utilised resource especially as a source of renewable heat. This strategy outlines our ambition to expand the supply of sustainably produced biomass and to increase the use of biomass to provide energy to generate heat and electricity and (subject to the outcome of current consultations) for transport. It sets out routes for achieving these objectives and addresses the risks especially in relation to changes in land use. The UK Sustainable Development Strategy⁹ sets out five guiding principles and these will be applied to the formulation of policy flowing from this strategy.

1.3 This strategy brings together current Government policies on biomass for industry, energy and transport and provides a framework for the development of biomass as a whole. It recognises that EU and wider international policies will have an important influence on the use of biomass. In particular the EU recently agreed:

a 20% share of renewable energies in overall EU energy consumption by 2020;
a 10% minimum target to be achieved by all Member States for the share of biofuels in overall EU transport petrol and diesel consumption by 2020, to be introduced in a cost-efficient way. This target is subject to biofuels production being sustainable, second-generation biofuels becoming commercially available and the Fuel Quality Directive being amended accordingly to allow for adequate levels of blending.

Specific renewables targets have still to be agreed for individual Member States. These will take account of different national starting points, including the existing level of renewable energies and the current energy mix. Every Member State will be expected to meet the minimum biofuels target, subject to the caveats above, but will be given discretion to decide on national targets for each specific sector of renewable energies (heating and cooling, electricity and biofuels). While the specific targets that will apply in the UK have yet to be determined, it is clear biomass will have an important role to play in meeting them.

1.4 In publishing this strategy now we are not in a position to set out in detail how we plan to meet the new EU targets. However the need is evident for a significant increase in sustainable biomass production and its use for energy.

1.5 Climate change is both a long-term and urgent challenge. Delivering our policy to tackle climate change is a priority. The policy is focussed on reducing carbon dioxide emissions – by 20% below 1990 levels by 2010 and by 60% by 2050. We are also committed, under the Kyoto Protocol, to reduce our greenhouse gas emissions by 12.5% below 1990 levels by 2008-12 and are on track to achieve this.

1.6 Biomass can play a significant part, not only in reducing net emissions of carbon dioxide but also in mitigating other greenhouse gas emissions especially through the development of anaerobic digestion treatment of manures and slurries and biowaste. Anaerobic digestion produces a biogas that can be used as a renewable energy source, both for heat and power, and as a transport fuel. The treated liquid (or digestate) can be used as a fertiliser. We need to draw on scientific advance and industrial innovation to utilise biomass to meet the increasing demands for sustainable products from renewable sources. This move towards a bioeconomy is a key part of our vision for one-planet living under which economies continue to grow sustainably while recognising the environmental limits which face us all.

1.7 We will continue to deliver our policies and aspirations through close working with public, private sector and community stakeholders. The Regional Development Agencies (RDAs) are using their Regional Economic Strategies to progress towards implementation of the Task Force recommendations. The RDAs will work in partnership with the Forestry Commission (for woody biomass), local authorities and a range of local delivery bodies to identify and support the most appropriate range of activities for facilitation to realise these objectives.

1.8 The Government’s response to the Biomass Task Force Report, included a clear commitment to produce a UK Biomass Strategy. However time has moved on rapidly since this commitment was made in July 2006, with the different nations of the UK pressing ahead with the development of action plans and policies to drive forward biomass use. This strategy is intended to complement the work already published in Scotland and Northern Ireland, and the developing policies in Wales, and does not seek to duplicate, pre-empt or replace them. We also acknowledge that the new devolved government administrations may wish to change existing policies or introduce new ones. However this strategy will help set the context where targets, and measures to meet them, have UK wide application and inform thinking within the devolved administrations.

1.9 Key actions taken in England as a result of the commitments made in our response to the Biomass Task Force Report include:

the launch of a five-year Defra grant scheme for biomass heat and CHP, building on previous support from DTI and the Big Lottery Fund
confirmation of the intention to support energy crop establishment in the new Rural Development Programmes
development of strategies for promoting second-generation biofuel technologies
action to promote biomass alongside other renewables in policies on planning and sustainable communities
publication of the England Woodfuel Strategy In addition the overall approach to energy supply set out in the Energy Review (and now taken further in the Energy White Paper) provides underpinning support to our specific objectives for biomass.

1.10 In Northern Ireland the key renewables target of 12% for the amount of electricity to be consumed from renewable sources by 2012 includes a sub-target that 15% of those renewables should be from non-wind sources. While there are no targets against specific sources such as biomass there is nonetheless a significant potential for biomass to contribute. In this context, the major CHP development (2.7MWe/10MWth) at the Balcas sawmill in Co. Fermanagh, part funded by a £2m grant from DTI, is already an exemplar in biomass development: the operation makes the sawmill selfsufficient in electricity while the CHP plant also powers one of the largest biomass pellet production facilities in the British Isles. The pellets are produced using sawdust residues from the main sawmill operation and the operation produces 50,000 tonnes of pellets annually, sufficient to meet the energy needs of 10,000 households.

1.11 The public sector too is leading by example and in this context the Northern Ireland Sustainable Development Strategy¹⁰ includes a target for the Government Estate to be carbon neutral by 2015. Further, the £59m Environment and Renewable Energy Fund¹¹ established by the Northern Ireland Secretary of State, Peter Hain, in 2006 includes provision for developing the use of biomass to produce heat and power as well as for the associated bioenergy research and infrastructure development.

1.12 In January 2007, the Northern Ireland Department of Agriculture and Rural Development published a Renewable Energy Action Plan.¹² This provides a coherent support framework that will enable the land based rural sector to realise the potential of renewable energy production at a regional level in a balanced and sustainable way. On 4 March 2007, the Government in the Republic of Ireland published a Bioenergy Action Plan¹³ which includes among its immediate actions working with Northern Ireland to develop an allisland approach to developing the bioenergy sector over the next three years. This is in line with the allisland approach to overall energy development on the island of Ireland and should help achieve economies in bioenergy development.

1.13 In Scotland a Scottish Biomass Action Plan was published on 19 March 2007.¹⁴ The Scottish Plan aims to:

provide a summary of a wide range of existing activities, actions and initiatives;
provide a focus for a strategic co-ordinated approach to developing biomass for energy production across heat, electricity and transport sectors;
identify roles and responsibilities for government, industry and public stakeholders to develop a vibrant bioenergy industry in Scotland;
and identify future actions and gaps.

1.14 The Welsh Assembly Government intends to produce, later this year, a Welsh Biomass Energy Strategy which will address issues of supply and demand. This will build on previous biomass schemes in Wales, such as the co-firing of coal and biomass at Aberthaw power station, and the use of biomass boilers to heat the National Assembly’s Snedd building. Other Welsh biomass projects have benefited from the support of Objective 1 funding from the European Union; these include the Wood Energy Business Scheme, the Western Log biomass power station and the Bluestone CHP plant that uses wood and energy-crop biomass.

1.15 The proposed Biomass Energy Strategy will also take account of initiatives, such as an Alternative Fuels Action Plan, to reduce carbon dioxide emissions from transport in Wales. At the same time, the Assembly Government is expected to develop policies which will have an impact on other aspects of biomass production and use, such as the review of land management schemes under the new Rural Development Plan for Wales which will consider the feasibility, cost and benefits of introducing planting grants for energy crops.

1.16 The Working Papers which are being published alongside this strategy give references for the reviews and reports which have informed the strategy.

1.17 Key representatives of the biomass sectors have played an important role in developing this first UK Biomass Strategy through correspondence, face-to-face meetings and the work of the Biomass Implementation Advisory Group (BIAG) and the Renewables Advisory Board. We are grateful to all those who have contributed to this process.

¹ www.dti.gov.uk/energy/whitepaper
² Renewables Innovation Review: www.dti.gov.uk/files/file22017.pdf
³ Based on the amount of biofuel feedstocks needed to supply 50% of the 5% (by volume) RTFO target, with a 55:45 split between biodiesel and bioethanol.
⁴ These assessments do not take into account the biofuel production that could be sourced from waste oils which currently are disposed of to landfill or additional straw produced with first generation biofuel feedstocks.
⁵ Excludes non-energy use of fuels (12.6 Mtoe), final consumption of oil for air, rail and national navigation (16.1 Mtoe) and other primary energy uses not included in the three categories, such as mechanical power, energy for cooking/catering, use by the energy industries and other transformation and distribution losses (17.8 Mtoe).
⁶ http://www.defra.gov.uk/farm/crops/industrial/energy/biomass-taskforce/pdf/btf-final-execsumm.pdf
⁷ http://www.defra.gov.uk/farms/crops/industrial/energy/biomass-taskforce/pdf/btfreport-govresponse.pdf
⁸ http://www.dti.gov.uk/files/file31890.pdf
⁹ http://www.sustainable-development.gov.uk/publications/uk-strategy/index.htm
¹⁰ http://www.ofmdfmni.gov.uk/sustain-develop.pdf
¹¹ http://www.detini.gov.uk/cgi-bin/downdoc?id=1985
¹² http://www.dardni.gov.uk/renewable-energy-action-plan-2.pdf
¹³ http://www.dcmnr.gov.ie/NR/rdonlyres/6D4AF07E-874D-4DB5-A2C563E10F9753EB/27345/BioenergyActionPlan.pdf
¹⁴ http://www.scotland.gov.uk/Publications/2007/03/12095912/0

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