1 october 17-18, 2007wec roundtable ‘changing the future of our energy choices’ 1 biofuels: is...
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October 17-18, 2007 WEC Roundtable ‘Changing the Future of Our Energy Choices’
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Biofuels: is the cure worse thanthe disease?
World Environment Center Roundtable
“Changing the Future of Our Energy Choices”
OCTOBER 17-18, 2007
October 17-18, 2007 WEC Roundtable ‘Changing the Future of Our Energy Choices’
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Outline
Potential conventional and advanced biofuels– Technical
– Economic
Policy– Subsidies
– Trade policies
Consequences– Cost-effectiveness
– Certification
An alternative policy agenda
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Technical PotentialEnergy crops – ‘first-generation’
Available land with potential for rain-fed cultivation– deduct forest land– deduct land already in use (arable land)– deduct land needed to accommodate growing population– deduct needed pasture land
Estimate at lower end of range in alternative studies, however, still optimistic
– Overestimate land that could be used– Underestimate land already in use– Underestimate water shortage (f.e. Africa)– Competing demands
Yield – 190 Giga Joule per hectare a year Total: 14 Exa joule in 2050 (8% of demand transport)
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Technical PotentialResidues/waste – ‘second-generation’
Crop residues– Higher productivity, less residuals– Prevent soil erosion
Forest residues– Increased demand for material use– Prevent soil erosion– Inaccessibility very distant locations (< 200 km between harvesting and processing)
Animal and organic waste– Cost of collection / complexity of logistics
Marginal and degraded land– not taken into account (in the order of 5 – 7 Exa Joule)
Total: 24 EJ in 2050 (12% of demand in transport)
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Biofuels potential in 2050 Energy demand in 2050
Technical Global Biofuels Potential max. 20% of energy demand in transport sector
6%
101%
16%
55%
9%
18%
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Economic Potential
IEA: between 7% (2030) and 14% (2050) of energy demand in transport
Assumptions:– Declining feedstock prices – Technological breakthroughs– Acceptable cost of logistics
However:– Trend feedstock prices is up and correlated with oil price– Breakthroughs are inherently uncertain– Cost of logistics high
October 17-18, 2007 WEC Roundtable ‘Changing the Future of Our Energy Choices’
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October 17-18, 2007 WEC Roundtable ‘Changing the Future of Our Energy Choices’
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Climate Change mitigation potential
Well-to-wheel emission reductions
0 20 40 60 80 100
Second generation
Rapeseed, EU
Corn, US
Wheat, EU
Sugar cane, Brazil
Sugar beet, EU
% reduction, compared to petroleum gasolineSource: IEA
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Climate Change Mitigation Potential
Technical potential: 2 Gt CO2–equiv.
Ambitious IEA scenario (2006): 1.8 Gt CO2–equiv.
~ 3.5% of total energy-related CO2 emissions in 2050
Assuming:– Only sugar cane and second-generation technologies are used
– Life-cycle GHG reductions from well-to-wheels is 90%
– New land available without additional emissions
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Provisional total support estimates (TSE) 2006
OECDeconomy
Ethanol Biodiesel Total liquid biofuels
TSE(billions of
US$)
VariableShare(percent)
TSE(billions of
US$)
VariableShare(percent)
TSE(billions of
US$)
Variable Share(percent)
United States
5.4 – 6.6 60% – 65%
0.5 – 0.6 ~ 85% 5.9 – 7.2 ~ 65%
EU 1.6 98% 3.1 90% 4.2 93%
Canada 0.15 70% 0.013 55% 0.11 65%
Australia 0.035 ~ 70% 0.021 ~ 70% 0.05 ~ 70%
Switzerland >0.001 94% 0.009 99% 0.01 98%
Total 7.2 – 8.4 3.6 – 3.7 10.8 - 12.1
Source: Steenblik, R., Biofuels at what cost? Government support for Ethanol and biodiesel in selected OECD Countries, IISSD, Global Subsidies Initiative
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Mandates and Trade (Barriers)
Mandatory blending, volumetric or market-share targets guarantee market
Trade barriers favour domestic consumption
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Consequences (1)
Increased GHG as a result of deforestation and land use changes
Land degradation / water pollution
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0 100 200 300 400 500 600 700 800 900 1000
100% Rape ME CH
100% Rape ME RER
100% P almoil ME MY
100% Soy ME US
100% Soy ME BR
100% Recycled plant oil ME CH
100% Recycled plant oil ME FR
Methanol fixed bed CH
Methanol fluidized bed CH
Ethanol grass CH
Ethanol potatoes CH
Ethanol sugar beets CH
Ethanol whey CH
Ethanol wood CH
Ethanol sweet sorghum CN
Ethanol rye RER
Ethanol corn US
Ethanol sugar cane BR
Methane grass biorefinery
Methane manure
Methane manure+cosubstrate
Methane manure, optimized
Methane manure+cosubstrate, optimized
Methane biowaste
Methane sewage sludge
Methane wood
Diesel, low sulphur EURO3
P etrol, low sulphur EURO3
Natural gas, EURO3
UBP Indicator for Environmental Impact
Infrastructure
Cultivation
Production
Transport
Operation
Bio
dies
elE
than
olM
etha
neF
ossi
l
Sou
rce:
Zah
(20
07)
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Consequences (2)
Higher food prices– Winners and losers in the agricultural sector
No benefits for least-developed countries
Oil dependence unchanged
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Cost-effectiveness
Energy security: – support per litre of fossil fuels displaced– US: between $ 0.66 and 1.40 per litre fossil fuels displaced– EU: between $ 0.77 and 4.98 per litre fossil fuels displaced
Climate Change– support per tonne of CO2 avoided
– US: > $ 500 per tonne of CO2
– EU: $ 340 – 4520 per tonne of CO2
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Policy Response: Standards and certification schemes
International vs national Mandatory vs voluntary Including vs excluding displacement effects No differentiating between life-cycle GHG
balance– Exception: Low Carbon Fuel Standard
Long timeframe– implementation on global scale will take years
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Alternative policy agenda (1)
1. Cease creating new mandates, support schemes1. phase out existing ones
2. Support R&D 2nd generation technologies
3. Introduce more technology neutral policies 1. carbon tax, low carbon fuel standard
4. Environmental cost and benefits
5. Increase energy efficiency
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Alternative agenda (2)
6. Harmonize certification efforts
7. Lowering trade barriers
8. Optimal use biomass in developing countries
– Energy access or producing for export markets?
October 17-18, 2007 WEC Roundtable ‘Changing the Future of Our Energy Choices’
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ConclusionCurrent policies risks to:
• Increase GHG emissions• Damage the environment (biodiversity, soil quality, water
supplies)• Increase food insecurity
• Without benefiting energy security • And while ‘loosing’ a lot of taxpayers’ money in the process
Policies should: Stop distorting, start supporting the market
• Differentiate fuels by pricing (1st best) or regulating (2nd best) carbon content
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Literature
Doornbosch, R., R. Steenblik (2007), Biofuels: is the cure worse than the disease, background paper prepared for the 20th meeting of the Round Table on Sustainable Development, OECD, Paris
Fischer, G. and Schrattenholzer, L. (2001): Global bioenergy potentials through 2050, Biomass and Bioenergy, 20 (3):151-159. Reprinted as RR-01-009. International Institute for Applied Systems Analysis, Laxenburg
IEA (2006), World Energy Outlook, OECD, Paris IEA (2006), Energy Technologies Perspectives, OECD, Paris Steenblik, R. (2007), Biofuels at what costs? Government support for ethanol
and biodiesel in selected OECD countries, Global Subsidies Initiative of the IISD, Geneva
Zah, Rainer, Heinz Böni, Marcel Gauch, Roland Hischier, Martin Lehmann and Patrick Wäger (2007a), Life Cycle Assessment of Energy Products: Environmental Assessment of Biofuels — Executive Summary, EMPA – Materials Science & Technology, Federal Office for Energy (BFE), Bern, p.161
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