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Are you open to following seven steps to secure a bioeconomy, which will have an impact on reducing greenhouse gas emissions? The Biofuture Platform (BfP) – a government-led, multi-stakeholder initiative launched during COP22 in Morocco – published a study to map out the current status of the bioeconomy and challenges ahead.

This article first appeared in ESI Africa Issue 1-2020.
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Determined to honour its pledge, the BfP compiled a study titled Creating the Biofuture: A Report on the State of the Low Carbon Bioeconomy – to support its commitment to increase the use of sustainable biomass as feedstock for the production of energy, chemicals and materials. The report offers some recommendations aimed at shaping the future of a bioeconomy and presents an assessment of the state of two key bioeconomy sectors, namely biofuels and non-energetic bioproducts.

The bioeconomy plays a vital role in the low carbon development scenarios in tandem with a range of complementary mitigation efforts across the identified sectors. Reviews by the IEA and IRENA demonstrate that sustainable bioenergy is an indispensable component to meet the world’s growing heat, fuel and electricity demands in line with long-term climate goals (IEA, 2017a) & (IRENA, 2016a). In particular, bio-based alternatives can offset fossil fuels to meet heating needs in industrial, residential, and commercial sectors; to meet fuel demands in the freight, maritime, and air transport sectors; and power generation in circumstances where sustainable feedstocks are available as alternatives to fossil fuels.

While several estimates indicate significant growth perspectives for first and second-generation biofuel markets, a daunting challenge lies ahead. Therefore substantial support will be required to push the global output of second-generation biofuels to the level needed to achieve the 2°C Scenario (2DS) emission mitigation targets.

Production and consumption

The BfP report found that patterns of biofuel production and consumption vary widely, depending on countries’ economic and social structures, environmental policies, climate, land availability, food and wood supply chains and regulatory incentives. The US and Brazil are responsible for 65.5% of the world’s biofuel output, followed by the EU (16.7%), China accounts for 2.5%, and the remainder is scattered elsewhere. Consumption trends do not always follow production geographies; prominent net importers of biofuels include China, Canada and France. Key feedstocks for global ethanol production are sugarcane, sugarbeet, corn and wheat. While key feedstocks for global biodiesel production are rapeseed, sunflower, soybean, palm, animal fats and waste greases.

Different feedstocks can result in widely different environmental, GHG-mitigation and energy-balance performance for ethanol and biodiesel. However, there are no simple rules of thumb, performance being also strongly dependent on the local context, agricultural policies and practices, supply chain processes and conversion technology used. Advanced, second-generation biofuels production is increasing within and beyond the BfP, although still concentrated mainly in the US and the EU.

Limiting factors for bioeconomy growth

The BfP report identified a range of barriers that are limiting the development and deployment of biofuel and bioproduct markets. Here follow four central barriers examined in the report.

Risk perception and availability of financial resources

Advanced biofuels and bioproduct projects have substantial costs and risks rendering investment decisions inherently tricky. Public funding is typically limited in its capacity to reach multiple projects and catalyse private investments; however, the report noted that the availability and costs of financial resources are only a secondary barrier. The chief financial barrier is related to high capital costs associated with investments in biofuel plants/biorefineries, as well as to the perceived risks associated with investments in the sector, which can be considered as consequences of the other identified barriers. Also, perceived risks and high investment costs may hinder additional funding in R&D necessary to tackle remaining technical challenges and scale up production and use of advanced biofuels at full commercial scale.

Lack of competitiveness against fossil fuel-based alternatives without appropriate incentives

Biofuels and non-energetic bioproducts competitiveness against fossil fuels-based products is highly dependent on subsidies, incentives, or mandates. Biofuel blends are mandated in several countries, yet the balance remains in favour of fossil fuel alternatives. Fossil alternatives benefit from several decades of industrial maturing, lower production costs, and several subsidies worldwide.

Unfavourable policy frameworks

The complex web of interconnected mandates, subsidies, tax incentives, grants or other instruments often work directly or indirectly against the bioeconomy, or in favour of new competing technologies. Due to the necessarily crosscutting nature of biofuels and non-energetic bioproducts policies – which concerns energy, environment and agriculture agendas – the lack of or inadequate coordination among different government agencies and ministries may also hinder the adoption of favourable policy frameworks.

Limitations surrounding sustainable feedstock supplies

Feedstock supplies are often reported to be insufficient, expensive, or unreliable. There is a great deal of questioning the ability to sustainably scale up feedstock (biomass), including concerns over indirect land-use change. However, there is a growing consensus on what constitutes sustainable best practices for biomass feedstock production and use. In other cases, the concern is not feedstock availability but rather relates to inadequate supply chain networks at required scales. Moreover, feedstock supply may be inconveniently located with respect to processing facilities, all of which affect the business case for advanced biofuel developments.

Seven recommendations

An advanced bioeconomy will require an unprecedented effort in support instruments and suitable policies to fulfil its role in low carbon development scenarios. Technology innovation and diversification will also be needed to set forth a worldwide bioeconomy. Beyond the bioeconomy, consider the long-term decarbonisation objectives. These will require a range of complementary mitigation efforts to be deployed in parallel across all economic sectors, such as vehicle electrification and other renewable energy technologies.

Acknowledging the global and regional status of the advanced bioeconomy as well as barriers reported by countries – drawing from the real experience of policy support to the bioeconomy and low carbon innovation more broadly – a set of seven recommendations is put forward to policymakers:

1. To establish clear goals and identify technologies with the potential to achieve such goals.

2. To map the local market for biofuels and bioproducts production technologies, the potential to develop this market, and technologies needed to fulfil national goals.

3. To understand the support needs for priority technologies and available policies to meet these needs.

4. To compare the costs and benefits of alternative policy support package options, by running scenarios of alternative policies to address barriers identified.

5. To decide on a pathway forward involving the appropriate stakeholders and assigning ownership of activities.

6. To deploy a package of interventions in each country, supported by adequate public budgets, to address identified barriers holding back the advanced bioeconomy.

7. To collaborate with existing international initiatives, such as BfP, SBIC/MI and other initiatives, to identify common interests, advance agendas, share knowledge, engage stakeholders, and disseminate results, while enhancing communication and avoiding duplication of efforts.

Innovation and development of integrated biorefineries yielding bioproducts, sustainable biofuels and other goods can be part of the solution to enhance the business profitability and improve the case for investments – requiring governments to take a holistic approach when supporting the bioeconomy.

What is the 2°C Scenario (2DS)?
The 2°C Scenario (2DS) lays out an energy system pathway and a CO2 emissions trajectory consistent with at least a 50% chance of limiting the average global temperature increase to 2°C by 2100. Annual energy-related CO2 emissions are reduced by 70% from today’s levels by 2060, with cumulative emissions of around 1,170 gigatonnes of CO2 (GtCO2) between 2015 and 2100 (including industrial process emissions).

References

• Creating the Biofuture: A Report on the State of the Low Carbon Bioeconomy. Biofuture Platform, 2018

• Energy Technology Perspectives. IEA, 2017