Advanced Biofuel Feedstock: An assesment of sustainability

Framework for Transport-Related Technical and Engineering Advice and Research (PPRO 04/45/12)

Lot 2 (Road Related Technical Engineering And Advice)

Package Order Ref: 217(4/45/12)ARPS – PPRO 04/91/30

Project Sponsor: Neeraj Kaushal (DfT)

Advanced Biofuel Feedstocks –

An Assessment of Sustainability

Submitted by:

Arup URS Consortium

Lead Supplier:

E4tech (UK) Ltd

Notice

This document has been produced by the Arup URS Consortium for the Department for Transport for the above

captioned Work Package. It may not be used by any person for any other purpose other than that specified

without the express written permission of the Arup URS Consortium. Any liability arising out of use by a third

party of this document for purposes not wholly connected with the above shall be the responsibility of that

party who shall indemnify the Arup URS Consortium against all claims costs damages and losses arising.

Document History

Rev Description Originated Reviewed Date

V2.5 Final Deliverable Richard Taylor Ausilio Bauen 28/01/2014

Contents

Executive Summary ................................................................................................................................. 4

1 Introduction ..................................................................................................................................... 8

1.1 Objectives ................................................................................................................................ 9

2 Review of policy proposals ............................................................................................................ 10

3 Analysis of the multiple counting approach .................................................................................. 17

3.1 Impact of multiple counting to date ..................................................................................... 17

3.2 Future impact of proposed multiple counting ...................................................................... 23

3.3 Views on other mechanisms to incentivise advanced biofuels ............................................. 25

4 Feedstock information .................................................................................................................. 27

4.1 Feedstocks to consider in/out of scope ................................................................................ 27

4.2 Descriptive information ......................................................................................................... 29

4.3 Supply potentials ................................................................................................................... 31

4.4 Technologies .......................................................................................................................... 33

4.5 Economics .............................................................................................................................. 38

4.6 Sustainability ......................................................................................................................... 42

4.7 Direct GHG emissions ............................................................................................................ 53

4.8 Holistic view ........................................................................................................................... 60

5 Analytical framework for assessing feedstocks............................................................................. 62

5.1 Recommendations for the Annex IX lists .............................................................................. 66

Appendix A - References ....................................................................................................................... 69

Appendix B - Feedstock definitions ....................................................................................................... 76

Appendix C - Feedstock factsheets........................................................................................................ 81

List of Tables

Table 1: Comparison and amendments to Annex IX ............................................................................. 14

Table 2: Summary of RED proposals and stakeholder positions ........................................................... 16

Table 3: Summary of descriptive information ....................................................................................... 30

Table 4: Summary of feedstock supplies and biofuel production potentials........................................ 32

Table 5: Summary of feedstock prices .................................................................................................. 40

Table 6: Summary of biofuel production costs ..................................................................................... 41

Table 7: Identification of current competing uses ................................................................................ 43

Table 8: Likely replacement resources if feedstock diverted away from existing uses ........................ 47

Table 9: Summary of environmental and social factors ........................................................................ 49

Table 10: Summary of estimated price impacts .................................................................................... 52

Table 11: Summary of direct GHG emissions, assumptions and sensitivities ....................................... 57

Table 12: Summary of key criteria ......................................................................................................... 61

Table 13: Analytical framework results ................................................................................................. 68

List of Figures

Figure 1: Share of EU biodiesel consumption derived from animal fats and UCO ............................... 18

Figure 2: Share of UK biodiesel consumption derived from UCO and animal fats ............................... 19

Figure 3: UCO and Animal fat biodiesel reported under the RTFO ....................................................... 19

Figure 4: Potential conversion pathways from each Annex IX feedstock to biofuel ............................ 34

Figure 5: Current TRL status of the main conversion technologies ...................................................... 37

Figure 6: Flow diagram for the analytical framework ........................................................................... 65

Advanced Biofuel Feedstocks - An Assessment of Sustainability

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Executive Summary

Biofuel uptake within Europe has stalled in recent years due to the policy uncertainty surrounding

Indirect Land Use Change (ILUC). Proposed changes to the Renewable Energy Directive (RED) have

gone through rounds of Commission, Parliament and Council amendments since October 2012 – with

ILUC factors, caps on food-based biofuels, multiple counting and sub-targets for advanced biofuels all

under intense debate.

Due to the lack of a clear definition for “wastes and residues” in the current RED, double counting

has to date been implemented inconsistently across Europe. A move to an inclusive list-based

approach for supporting feedstocks is therefore intended to promote greater harmonisation

between Member States. The 28 or so feedstocks within the Annex IX lists are proposed to count

double (or quadruple) towards national renewable transport targets, and/or count towards a 2020

sub-target for biofuels from novel conversion technologies using these resources. This feedstock list

started with the RED and the Commission’s communication on practical implementation, taking on-

board criteria and classifications of wastes and resides drawn up by the Renewable Fuels Regulators

Club in 2010. In their 2012 proposals, the Commission added feedstocks they considered to be low

ILUC risk, but since then several other feedstocks have been added, removed or reinserted, but with

no transparent rationale or underlying analysis. The process and criteria by which future feedstocks

will be added to the list are also still unclear.

This study provides, to the best of our knowledge, a first holistic analysis of the whole list. It gathers

consistent information and defines a rationale for including feedstocks within Annex IX using a clear

set of criteria. This evidence base will help inform the UK’s ongoing negotiations with other EU

Member States, the Department for Transport’s longer-term biofuels’ strategy, as well as the

eligibility criteria for the 2014 UK advanced biofuels demonstration competition.

Sustainability of Annex IX feedstocks

In this study, we have collected information regarding the basic characteristics, supply potentials,

technology compatibility, economics and sustainability for each of the 28 feedstocks within the

Annex IX lists. The analysis is based on the best evidence publically available that could be gathered

within the short duration of the study, and we have highlighted where the available evidence is most

uncertain and the additional information needs. For a more detailed picture, or a regional focus,

market analyses for individual feedstocks will be required. Our synthesised findings are as follows:

• Availability: Feedstock supply data for today and 2020 was collected (in million tonnes/yr

and PJ/yr of biofuel equivalent) for the UK, EU and globally. MSW and C&I wastes, straw,

manures, forestry and renewable electricity typically have the largest supply potentials.

Other feedstocks have more modest potentials, whereas wine residues, tall oil pitch, crude

glycerine resources are the most limited. Energy crops, short rotation forestry and algae will

also be in short supply by 2020, but have longer-term potential.

• Technology: There are numerous conversion technologies capable of transforming the Annex

IX feedstocks into biofuel. Many routes are still at pilot scale, whilst those in demonstration,

and hence potentially able to contribute meaningful biofuel volumes by 2020 include

lignocellulosic ethanol and butanol, pyrolysis oil upgrading, gasification routes to alcohols,

bio-Synthetic Natural Gas, Fischer-Tropsch diesel & jet, plus renewable electrolysis. Some


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technologies are commercially available, but are only compatible with a few of the Annex IX

feedstocks, such as biomethane from anaerobic digestion (e.g. for MSW, C&I wastes), FAME

biodiesel and Hydrotreated Vegetable Oil (e.g. for UCO, animal fats and micro-algae).

• Economics: Wastes with a gate fee have a negative price, and those energy dense feedstocks

(like tall oil pitch, crude glycerine, UCO and animal fats) have the highest positive prices –

along with algae and renewable electricity. Delivered biofuel production costs have also been

calculated in the study for 30 selected supply chains.

• Competition: Competing uses vary widely, as do the likely substitute resources and price

impacts if the Annex IX feedstock was to be diverted to biofuels. Generally, feedstocks that

are disposed of (e.g. MSW, C&I wastes, UCO, waste carbon gases) or left uncollected (e.g.

straw, cobs, forest residues, small round-wood) can be collected sustainably up to certain

limits. Manure and sludge spread to land can be treated via anaerobic digestion first before

returning the digestate to land. Diverting a feedstock out of heat & power or industrial uses

will have an impact through the carbon intensity of the replacement resource (i.e. high risks

if replaced with fossil fuels vs. low risks if sustainable biomass used instead). Diverting straw

and wood from animal bedding will likely rely on additional sustainable supplies of straw and

wood to be found, whereas animal feed if diverted will need more roughage or carbohydrate

crops produced from land (a potential ILUC risk). Some industries have minimal feedstock

flexibility, such as the spirits industry (grape marcs and wine lees), paper & panel board

(forestry) and high-value chemicals (e.g. glycerine). For those feedstocks specifically grown

for biofuels, current competing uses are relatively unimportant, but the land they are grown

on is important – in particular, energy crops grown on agricultural land could cause ILUC, if

mitigation measures are not implemented. In general, those feedstocks with minimal

expansion potential and high competition levels are likely to suffer price increases if diverted

to biofuels.

• GHG savings: Most Annex IX biofuel routes are able to achieve GHG savings above 80%.

Routes using MSW, C&I waste, bagasse, wine lees, algae and waste carbon gases are more

likely to fall into the 60-80% bracket, due to cultivation emissions, chemical or energy inputs,

and transport distances. GHG emissions have been combined with the relative economics to

give an indicative cost of GHG saving (in £/tCO2e) versus a fossil comparator.

Rationale for considering feedstocks for additional policy support

Based on the gathered information, the study developed a framework to determine feedstocks for

which additional regulatory support could be justified (note that this does not specify the support

mechanism). The following hierarchy of questions are illustrated as a flow diagram that can be

followed to determine if a feedstock meets all the criteria to be eligible for support:

1. What is it classified as: a waste or processing residue (non-land using), or alternatively, an

agricultural/forestry residue, co-product or product (land using)?

2. If land using, what type of land does it come from? Has the use of high biodiversity, high

carbon stock or peat land been avoided? (meeting current RED is a minimum requirement)

3. What are the key competing uses, and potential substitute resources? Would diversion to

biofuels result in a high risk of unacceptable carbon, cost, environmental or social impacts –


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such as the knock-on use of more fossil fuels or land? (These risks can be volume and

location dependent). Alternatively, for new non-food crops, is there a risk of competition

with food via ILUC?

4. Are the lifecycle GHG emissions savings of producing biofuel from the feedstock high enough

(versus a suitable fossil comparator) to be supported? At least 60% will be required under

the RED, but a higher threshold could be chosen by policymakers.

5. Would use of the feedstock for biofuels be economically viable without support, and hence

likely to be deployed? Or would deployment only occur with support, due to the lack of

commercial readiness of the conversion technology, infrastructure investments required or

other reasons?

Applying these criteria across the whole of the Annex IX list leads to the following conclusions:

• Several feedstocks have a significant uncollected resource that could be diverted from

current disposal, produced without indirect impacts, or sustainably extracted with limited

competition. MSW, C&I wastes, manures, forest residues, small round-wood, algae and

renewable electrolysis are likely to need further support to be economically viable or help

commercialise conversion technologies. UCO may not require additional support, depending

on infrastructure investments to access domestic supplies.

• Some feedstocks face higher levels of competition, and hence only a smaller unused fraction

of the total supply is likely to be at low risk of causing indirect impacts. This includes straw,

cobs, sewage sludge, bagasse, empty palm fruit bunches and waste carbon gases.

• For other feedstocks, such as animal fats, nut shells, husks, sawdust & cutter shavings, tall oil

pitch, brown & black liquor, support should only be provided if the industries involved can

show replacement of the missing energy demands with low carbon, sustainable alternatives

– otherwise there is a risk of increased fossil fuel use offsetting any GHG savings.

• Energy crops and short rotation forestry have longer-term potential (post 2020), but will

require strict enforcement of ILUC mitigation measures to ensure the land grown on avoids

food competition as well as being low risk (e.g. protecting carbon stocks).

• A few feedstocks should probably not be supported for biofuel production, as they have

multiple competing uses with high risks of detrimental indirect impacts – these include crude

glycerine, grape marcs and wine lees. Until more information is available for Bacteria, the

risks of its inclusion likely outweigh the benefits, as it could cover a broad range of processes

(and feedstocks).

There is significant potential for biofuel production using low ILUC risk feedstocks, as many of the

feedstocks in the Annex IX lists meet the criteria listed above – or could do so where only uncollected

fractions are considered or when fossil fuel substitution can be avoided. However, most of the novel

technologies that convert these feedstocks to biofuels still need to be commercialised, and only a

few of the routes are currently economically competitive (compared to fossil transport fuels or

conventional food-based biofuels) – despite the attractive GHG savings on offer. Ongoing European

policy negotiations regarding advanced biofuels need to base the final Annex IX lists on robust

evidence, incorporating clear guidelines and definitions, if the resulting mechanism is to support truly

sustainable biofuels – hopefully, this study is a useful tool to help move the debate in this direction.


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Assessment of multiple counting and other potential support mechanisms

As well as gathering information on feedstocks and developing a rationale for their inclusion within

Annex IX, we also interviewed a range of industry stakeholders regarding their views on the recent

RED proposals and the effectiveness of double counting to date. Therefore, as well as determining

what should be supported, this study has gathered some industry views on how best these

feedstocks could be supported.

Double counting under the current RED has stimulated interest in exploiting new sources of wastes

that can be processed using largely conventional technologies, with a large rise seen in the collection

and conversion of Used Cooking Oil (UCO) and animal fats into biodiesel – particularly in the UK.

Market prices of UCO and animal fats have risen sharply in recent years, incentivising collection from

new sources (with initial fraud problems now resolved), but also adversely affecting existing users.

However, there is very little evidence of the current double counting regime triggering investment in

more novel conversion technologies – it necessarily increases advanced biofuel price volatility, and

by only applying to 2020 is not being factored into high capital cost investment decisions for plants

that will take several years to construct. Many industry stakeholders stated that whilst including

multiple counting in national biofuel supply obligations would continue to support UCO and animal

fat biodiesel, further multiple counting on its own is unlikely to be an effective mechanism to achieve

uptake of more novel conversion technologies.

Several interviewees viewed a sub-target as a better mechanism for securing the deployment of

novel conversion technologies, as it would provide a more certain market demand. Targets of 0.5 -

1.5% of European transport energy were cited as being achievable by 2020 (based on technology roll-

out projections), with 2.5% seen as too high (potentially leading to non-compliance fines).

Stakeholders have said that only novel conversion technologies ought to be supported under a sub-

target (i.e. UCO and animal fat biodiesel should not qualify as ‘advanced’ biofuels). There is

recognition that there may still have to be a role for some multiple counting, in order to meet

national targets based on achievable biofuel volumes – but there is also concern by some that

excessive multiple counting (e.g. quadruple counting most feedstocks) would significantly lower the

effective energy targets and realised GHG savings.

Policy uncertainty in the EU is a major concern for industry stakeholders, and will continue to stifle

investment in novel conversion technologies unless a clear and stable framework is set out –

particularly if other world regions have more attractive policies. A strongly and repeatedly advocated

message is that biofuel (or at least renewable transport or GHG emissions reductions in transport)

targets to at least 2030 are imperative if the industry is to develop: a sub-target for 2020 is not

enough. Precise definitions, intentions and quantified objectives will also need to be established in

advance in any agreed European policy documents. However, with the ongoing negotiations (and the

possibility of last-minute compromises), there is still uncertainty regarding what will be supported,

why and how, and if and when greater policy clarity will emerge (given also the forthcoming

European Parliament elections).


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1 Introduction

The Renewable Energy Directive (RED) and Fuel Quality Directive (FQD) are the two main policies

driving biofuel deployment in the EU out to 2020. However, recent years have seen a plateau in the

consumption of biofuels, primarily due to the policy uncertainty surrounding Indirect Land Use

Change (ILUC). Proposals to amend the RED and FQD in order to address ILUC were set out in

October 2012, and since then have gone through numerous iterations and intense debate – with

various EC parliamentary committees and Member States often holding strongly different views.

Negotiations are still ongoing, with Member States heavily involved in Council discussions at the

moment. One key part of these proposals is the Annex IX list of ‘advanced’ feedstocks that would

count double or quadruple towards national renewable transport targets, or form a 2020 sub-target

for biofuels from novel conversion technologies.

This study provides, to the best of our knowledge, a first comprehensive look across the whole list,

looking to gather consistent information, improve definitions and define the rationale for the

inclusion/exclusion of feedstocks using a clear set of criteria. The rationale behind why each

feedstock deserves to be incentivised is important – and to date, a working definition and clear

framework for defining what is a truly sustainable ‘advanced’ biofuel feedstock has been missing.

As the policy situation remains fluid, being able to provide a robust evidence base regarding the

Annex IX feedstocks will enhance the UK’s understanding and positioning in its engagement with

other EU member states and institutions during the ongoing RED revision negotiations. This study

will also help inform UK discussions on post-2020 climate and energy targets within Europe, as well

as DfT thinking towards long-term decarbonisation of the transport sector.

At the same time, DfT have also been looking at measures to accelerate the UK deployment of

sustainable biofuels in the period to 2020. In August 2013, £25m of capital funding was announced

for an advanced biofuel demonstration competition, designed to underpin significant private sector

investment in one or more UK plants. E4tech and Ricardo-AEA, via the URS Arup consortia, are

currently conducting a feasibility study to report on the detailed design of the competition. This

Annex IX feedstocks project will therefore help inform some of the competition eligibility criteria and

the potential for domestic advanced biofuel deployment.

Modelling exercises by DECC, CCC and ETI have shown that sustainable biofuels are likely to play an

important part in meeting long-term UK carbon reduction targets at least cost. These biofuels are

particularly important in the near- to medium-term, as vehicle fleets and infrastructure will take

decades to transition to full electrification or a hydrogen economy. There is a strong desire to avoid a

repeat of 1G biofuel sustainability issues derailing the policy support for, and development of,

advanced biofuels – policymakers and investors want to be able to make long-term decisions, based

on robust evidence, and having carefully thought about any indirect impacts.


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1.1 Objectives

In order to address DfT’s requirements stated above, this study will therefore set out to provide the

following:

• A summary of recent EU policy developments, in order to understand the rationale behind

the current Annex IX lists, and the major changes that have been proposed.

• An assessment of the efficiency of multiple counting as an incentive mechanism for non-

food/non-land biofuels, focusing on lessons learnt from double-counting in recent years, the

likely impact of the proposed Directive double/quadruple lists on the EU biofuel industry,

and the potential for unintended consequences.

• Detailed background information on the feasibility (supply potentials), sustainability (GHG

savings, competing uses) and economic viability (prices and costs) of each of the Annex IX

feedstocks listed – plus any other feedstocks identified as missing. This will also include

qualitative information on locations and supply chains, and the commercialisation status of

suitable conversion technologies. A holistic view across the whole list will also highlight key

differences and similarities.

• An analytical framework to facilitate the objective assessment of advanced biofuel

feedstocks – both current and future – in order to define which feedstocks justify multiple

counting. This will contain a proposal for a set of criteria against which to assess the

feedstocks, which is then applied to assess the current Annex IX feedstocks in the context of

this project.

We note that every one of the 28 feedstocks considered within this study is a very complex system

(with several inter-dependencies), which makes finding ‘typical’ data, simplifying to an appropriate

level, and subsequent decision-making more challenging. However, the intention of this study is to

equip the Department for Transport, and other stakeholders, with a better understanding of the risks

and opportunities associated with each feedstock. This study is a first holistic appraisal of the Annex

IX feedstocks, but as it is based on public domain information, it is likely that in order to fully

understand the questions addressed in this study with a greater degree of confidence for a particular

feedstock, further data gathering and market analysis will be required.


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2 Review of policy proposals

In this section, we summarise the recent history of the European biofuels policy framework, focusing

on the set of Commission, Parliament and Council proposals and amendments currently under

negotiation. These key policy documents are reviewed below, highlighting any significant changes or

differences in approach relevant to advanced biofuels and feedstocks. A summary of the policy

proposals can be found in Table 2.

Interviews were also held with representatives at DfT, REA, DG Energy, DG Clima and REFUREC,

focusing on rationale behind the choice of feedstocks in each Annex IX list, to gain a better

understanding of why certain feedstocks have been supported or removed, and any underlying

analysis. The findings from these interviews have been incorporated in the sub-sections below. The

Committee on the Sustainability of Biofuels and other Bioliquids was not interviewed, as their focus

is policy implementation, not development.

The EU Renewable Energy Directive (2009/28/EC)

The RED is a common European framework intended to stimulate the production of energy from

renewable sources. It sets mandatory national targets for the overall share of energy from renewable

sources in gross final energy consumption and a minimum 10% share of renewable energy in

transport by 2020. Importantly, it also establishes sustainability criteria for biofuels that have to be

met in order for the biofuels to contribute towards national targets:

• Minimum level of GHG savings (35% today rising to 50% from 1st Jan 2017, with 60% from 1

Jan 2018 for new plants that start after 1st Jan 2017). These are to be calculated using the

energy allocation method, assigning a share of GHG emissions to any co-products in the

biofuel production process

• Land criteria (excluding land with high biodiversity value, or change of use for high carbon

stock or peat lands), with an emissions bonus for the use of restored degraded land.

The RED states that biofuels produced from waste and residues (other than those from agricultural,

aquaculture, fisheries and forestry residues) need only fulfil the minimum level of GHG savings, and

are not required to meet the land criteria set out in the RED. These feedstocks are assumed to have

zero life-cycle GHG emissions up to the point of collection. In addition, Article 21(2) of the RED states

that “the contribution made by biofuels produced from wastes, residues, non-food cellulosic material,

and ligno-cellulosic material shall be considered to be twice that made by other biofuels” for

compliance purposes towards meeting national transport targets.

Communication from the Commission on the practical implementation of the EU biofuels and

bioliquids sustainability scheme and on counting rules for biofuels (2010/C 160/02)

This communication was issued with the intent to support regulators with the implementation of the

RED. Attention is given to the double-counting of biofuels for demonstrating compliance with the

10% target for the share of energy in transport in 2020. The communication states that double-

counted biofuels include those from wastes and residues, but also that the Directive does not

contain definitions of wastes and residues. However, “waste can be understood as any substance or


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object which the holder discards or intends or is required to discard” – a definition which originates in

Article 1a of Directive 75/442/EEC on waste from 1975. Residues can include those from agriculture,

aquaculture, fisheries and forestry, as well as from processing, with the communication stating that

“A processing residue is a substance that is not the end product(s) that a production process directly

seeks to produce. It is not a primary aim of the production process and the process has not been

deliberately modified to produce it.”

Output from REFUREC working group: first list of feedstocks, along with Criteria for classification as

co-product, residue or waste

After the circulation of Communication 2010/C160/02, a working group consisting of Austrian,

Danish, Dutch, French, Swedish and UK participants to REFUREC (Renewable Fuels Regulators Club)

prepared a working document with the aim of helping Member States to implement a harmonised

classification of wastes, residues and co-products. Better feedstock definitions and clear

classifications were felt to be an important step in clarifying which feedstocks ought to qualify for

multiple counting, and how their GHG emissions should be correctly calculated under RED.

The document gives a definition of wastes and residues in line with Communication 2010/C160/02,

but clarifies that residues from agriculture, aquaculture, fishery and forestry should be those

associated with cultivation, harvest, thinning, peeling or felling. These include residues such as straw,

corncobs, bark, tops and branches. In contrast, residues from processing are those associated with

an industrial activity after collection and transport of the feedstock, for example peelings that may

occur in a food processing plant, sawdust and shavings in a wood sawmill, or empty palm fruit

bunches in a palm oil mill.

The REFUREC working group also provided a list of feedstocks, covering a range of different products,

co-products, residues and wastes – each classified in line with the definitions and considerations

from the working document. This list is incomplete, but provides useful guidance on the classification

of several food/feed “1G” crops and “advanced” biofuel feedstocks. These classifications have been

used in Table 13, with the exception of bagasse and nut shells, which the RED currently list as

agricultural residues, despite them being residues of downstream processing plants.

One disagreement between REFUREC working group members was their treatment of a 15%

threshold when determining co-products from residues. Member States that use double counting

(such as the UK) prefer to compare the material’s price to the main product price in absolute terms

(£/t), with other Member States that use tax regimes preferring to compare the material’s revenues

to the main product revenues (£/yr, i.e. value times amount). This can lead to some feedstocks being

considered a residue by some Member States, but a co-product by others. This 15% limit is seen by

some as problematic (due to fluctuations over time, complex system boundary definitions and

different levels of vertical integration across different geographies), and it has not been taken

forwards in RED or ILUC proposal discussions.


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Proposal for amendment of Directive 98/70/EC (FQD) and Directive 2009/28/EC (RED) –

Communication 2012/0288, 19th October 2012

The Commission’s proposal for amending the RED and FQD was published in October 2012, with the

aim to limit the impact of ILUC emissions from biofuels, to improve the GHG performance of biofuel

production processes, to encourage greater market penetration of advanced (“low ILUC”) biofuels,

and including a requirement to account for estimated ILUC emissions.

The proposal limits the share of energy from biofuels produced from food crops (cereals, other

starch rich crops, sugars, oil crops) to maximum 5% of the final consumption of energy in transport in

2020. It also proposes an increase in the minimum GHG savings threshold to 60% for installations in

operation after 1st July 2014, and for older installations the fuels would have to provide GHG savings

of at least 35% until 31st December 2017 and at least 50% thereafter. Since all biofuels derived from

feedstocks grown on land would now also have to account for ILUC emissions (using the values

stated in Annex V), the communication also lays out that biofuels from feedstocks that are classified

as “wastes” would have zero ILUC emissions. “Wastes” are defined as in Article 3(1) of Directive

2008/98/EC – the Waste Framework Directive, which has an explicit hierarchy for uses of waste.

The proposal to amend the RED (but not the FQD proposal) also introduces “Annex IX”, a list of

feedstocks, whose biofuels should be counted double or quadruple their energy content towards

national (RED) transport targets of member states, and gives the Commission delegated powers to

change this list as indicated by scientific and technical progress. This list contains all the materials

that were classified by the REFUREC working group as “wastes”, but also other feedstocks that were

considered by the Commission to have low ILUC risk. We spoke to one of the main individuals at the

Commission involved responsible for the drafting of this RED amendment and the Annex IX list.

As the original RED did not provide a definition of wastes and residues, individual interpretations

have led to significant differences arising between Member States regarding those biofuels that are

currently eligible (or not) for double counting – plus some Member States currently do not allow

double counting. This irregular implementation and potential for continued misunderstanding was

the reason why the Commission decided to move from generic wording to an inclusive list approach.

Introducing the Annex IX list was therefore intended to harmonise those feedstocks that received

support once the proposed amendments were implemented by each Member State, and provide

greater market clarity and uniformity. It would also highlight the broad range of feedstocks being

supported, and not just UCO and animal fats – thereby encouraging diversification of the feedstock

base. List based approaches are seen as a useful policy tool, but do require transparent ownership,

regular updating with an efficient process for including additions and sub-categories, along with clear

definitions at the appropriate levels.

Many of the Annex IX feedstocks were proposed to receive additional support, with their use for

biofuels quadruple counting, since the biofuel conversion technologies required were still to be

commercialised, and the current biofuel production costs likely to be high – these feedstocks were

also seen as having the lowest ILUC risks. Non-food cellulosic material (e.g. Miscanthus) and

Lignocellulosic materials except saw logs and veneer logs (e.g. Short Rotation Coppice, Small round-

wood) were seen by Commission individuals as being higher risk due to their use of land, hence these

feedstocks were only proposed as double counting – despite them being expensive and relying on

more novel conversion technologies. UCO and Cat I & II animal fats were maintained as only double


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counting to reflect the low cost of biofuel production based on these feedstocks, and their already

rapid uptake for commercialised biodiesel routes.

There is no additional GHG emissions saving threshold for a biofuel to qualify as advanced (beyond

the proposed 50% or 60% limits), although the Commission did indicate that their expectation is that

most of the advanced biofuels would save more than 80%. There is no single piece of analysis on the

GHG emissions of each of the Annex IX feedstocks, with only a selection of typical and default values

given in the RED for wheat straw (to ethanol), waste wood and farmed wood (to ethanol, FT diesel,

DME and methanol), along with MSW and manure (to biomethane), and waste vegetable and animal

oils (to biodiesel).

We note that no single body of scientific work or assessment framework lies behind the

establishment of this Annex IX list, the level of multiple counting, or the rationale for

inclusion/exclusion of different feedstocks. However, there is a patchwork of smaller research

assessments (some not publically available), conducted by different Member States and

consultancies, for a limited number of the feedstocks.

2012/0288(COD) - 11/09/2013 Text adopted by Parliament, 1st reading

During its first reading in the European Parliament, several key revisions were voted on and adopted:

• A minimum 7.5% share of renewable energy in petrol by 2020 in each Member State.

• The share of energy from biofuels from cereal and other starch rich crops, sugars, oil and

other energy crops grown on land is capped at 6% of final consumption of energy in

transport by 2020. This figure reflects a compromise position reached between ENVI and ITRI

committees, and would also cap land-using energy crops such as Miscanthus and Short

Rotation Coppice.

• The Annex IX feedstock list was split into Parts A, B and C, with the multiple counting

incentives altered as shown in Table 1 below.

• A sub-target for biofuels produced from more novel conversion technologies, with the final

consumption of energy in transport to be met from advanced biofuels set at 0.5% in 2016

and 2.5% in 2020. Only feedstocks in Parts A and C count towards this sub-target.

However, the ENVI rapporteur, Lepage, failed to secure a mandate to move forward into trilogue

discussions with the Council and Commission. This means a second reading in Parliament is now

required, which can only occur after the Council has reached a position. Interviewees expressed

strong doubts as to whether this can be achieved before Christmas and the impending Parliament

elections in May 2014. The view that it could be 2015 before a resolution is seen on ILUC has been

reinforced by the failed vote in the ENVI committee on 17th October 2013 – which would have tried

to fast-track a second reading by negotiating with Member States. The latest Council negotiations on

12th December 2013 have also failed to reach an agreement.

From our discussions with individuals within the Commission, it was not possible to establish the

process by which Part C feedstocks were determined and added, with most interviewees suggesting

that the Part C amendments were a success story for industry lobbying. There have been doubts

raised as to whether “Bacteria” is actually a feedstock, not a process. Carbon Capture and Utilisation

was also questioned as to whether it should be part of the RED, given the non-biogenic carbon.


14

Table 1: Comparison and amendments to Annex IX. Parliament amendments are given in bold

Commission proposal (Oct 2012) Parliament amendments (Sep 2013)

Part A. Feedstocks whose contribution towards the

target referred to in Article 3(4) shall be considered to

be four times their energy content

Part A. Feedstocks from waste and residues whose contribution

towards the target referred to in Article 3(4) shall be considered

to be once their energy content and which contribute towards

the 2,5% target referred to in Article 3(d)(i)

(a) Algae

(b) Biomass fraction of mixed municipal waste, but not

separated household waste subject to recycling targets

under Article 11(2)(a) of Directive 2008/98/EC of the

European Parliament and of the Council of 19

November 2008 on waste and repealing certain

Directives.

(b) Biomass fraction of mixed municipal waste, but not

separated household waste subject to recycling targets or

separate collection under Article 11(1) and (2)(a) of Directive

2008/98/EC of the European Parliament and of the Council of 19

November 2008 on waste and repealing certain Directives;

derogations may be granted by Member States for separate

biowaste where processes allow the production of both

compost and biofuels.

(c) Biomass fraction of industrial waste. (c) Biodegradable fraction of industrial, retail and wholesale

waste, but not waste subject to separate collection under

Article 11(1) of Directive 2008/98/EC, and provided that the

waste hierarchy & the principle of cascading use are respected.

(d) Straw. (d) Straw.

(e) Animal manure and sewage sludge. (e) Animal manure and sewage sludge.

(f) Palm oil mill effluent and empty palm fruit

bunches.

(g) Tall oil pitch. (g) Tall oil pitch.

(h) Crude glycerine. (h) Crude glycerine.

(i) Bagasse. (i) Bagasse.

(j) Grape marcs and wine lees. (j) Grape marcs and wine lees.

(k) Nut shells. (k) Nut shells.

(l) Husks. (l) Husks.

(m) Cobs (m) Cobs

(n) Bark, branches, leaves, saw dust & cutter shavings. (n) Bark, branches, leaves, saw dust and cutter shavings.

(na) Ligno-cellulosic material except saw logs and veneer logs.

Part B. Feedstocks whose contribution towards the

target referred to in Article 3(4) shall be considered to

be twice their energy content

Part B. Feedstocks from waste and residues whose contribution

towards the target referred to in Article 3(4) shall be considered

to be twice their energy content

(a) Used cooking oil. (a) Used cooking oil.

(b) Animal fats classified as category I and II in

accordance with EC/1774/2002 laying down health

rules concerning animal by-products not intended for

human consumption.

(b) Animal fats classified as category I and II in accordance with

EC/1774/2002 laying down health rules concerning animal by-

products not intended for human consumption.

(c) Non-food cellulosic material.

(d) Ligno-cellulosic material except saw logs and

veneer logs.

Part C. Feedstocks whose contribution towards the target

referred to in Article 3(4) shall be considered to be four times

their energy content and which contribute towards the 2,5%

target referred to in Article 3(d)(i)

(a) Algae (autotrophic).

(b) Renewable liquids & gaseous fuels of non-biological origin.

(c) Carbon Capture and Utilisation for transport purposes.

(d) Bacteria.


15

General Secretariat of the Council – 02/10/2013

The Council published its reaction on the text adopted at the first reading at the Parliament. This

suggested a higher cap of 7% for energy from biofuels produced from cereal and other starch rich

crops, sugars and oil crops. It also lowered the sub-target for biofuels produced from Part A

feedstocks in Annex IX to only 1% of final transport demand – and proposed that all biofuels from

feedstocks in Annex IX should be double-counted for their energy content. This position reflects the

lack of support for quadruple counting over the past year, plus the realisation that a sub-target

(although popular in many quarters) will be extremely challenging to meet if set as high as 2.5%,

particularly if mainly using single counting feedstocks.

The structure of the list of Annex IX feedstocks is retained from the original 2012 Commission

proposal, but a few feedstocks in Part A (now only double counting, not quadruple counting) have

been modified, or moved into Part A from Part B:

• New feedstock (ba) added: Bio-waste as defined in Article 3(4) of Directive 2008/98/EC from

private households subject to separate collection as defined in Article 3(11) of that Directive.

• Feedstock (n) definition extended: Biomass fraction of wastes and residues from forestry and

forestry related industries, i.e. bark, branches, leaves, needles, tree tops, saw dust, cutter

shavings, black liquor, brown liquor, lignin and tall oil.

• Feedstock (o) moved from Part B: Non-food cellulosic material.

• Feedstock (p) moved from Part B: Ligno-cellulosic material except saw logs and veneer logs.

• New feedstock (q) added: Renewable liquid and gaseous fuels of non-biological origin.

• We note that there is no mention of Bacteria or Carbon Capture and Utilisation in these

Council positions, and that Algae remains unchanged as feedstock (a) in Part A.

Interestingly, although energy crops (e.g. Miscanthus, Short Rotation Coppice) were dropped from

Annex IX in the Parliament amendments and capped alongside food crops, they have been reinstated

to Annex IX in this Council reaction and are not proposed to be limited under the food cap. UCO and

animal fats have retained their usual position of continued double counting towards the 10%

transport target, but not contributing towards any sub-target or food cap.

The Presidency has been very active in trying to reach a compromise position, with several meetings

of the ILUC Working Group in recent weeks. The very latest Council position (3rd December 2013)

actually has no Europe-wide sub-target for advanced biofuels, since many Member States (including

the UK) are concerned that there is no guarantee that a specific target could be reached – instead,

the possibility of a voluntary target at the discretion of Member States has been suggested. This

latest position also has double counting of Part A feedstocks in Annex IX (i.e. not UCO and animal

fats) towards both 10% transport and overall renewable energy targets. There has also been support

for x5 counting for electric road vehicles and 2.5x for electric rail.

COREPER (Committee of Permanent Representatives) met on 14th November and is meeting again on

29th November, ahead of the Energy and Environment Councils on 12/13th December. It would still be

possible for the Council to reach a political agreement in December, but as highlighted above,

interviewees see it being very tight as to whether there would be sufficient time to then get through

the full procedures with the European Parliament, ahead of the Parliament elections in May 2014.


16

Table 2: Summary of RED proposals and stakeholder positions

Policy scenario 2020

Food cap

2020

Sub-target Single counting Double counting Quadruple counting

Existing RED No No Several advanced feedstocks not

recognised for double counting by MSs

“Wastes, residues, non-food cellulosic material, ligno-

cellulosic material” – different interpretations in MSs None

Commission

Proposal,

Oct 2012

5% No None of the Annex IX feedstocks

proposed to single count

UCO, Category I & II animal fats, non-food cellulosic

material, LC material except saw logs and veneer logs

Algae, bio-MSW, industrial bio-waste, straw,

animal manure & sewage sludge, POME &

EPFBs, tall oil pitch, crude glycerine, bagasse,

grape marcs & wine lees, nut shells, husks,

cobs, bark, branches, leaves, saw dust &

cutter shavings

Parliament

Amendments,

Sep 2013

6%

2.5%

(with 0.5% in

2016)

Bio-MSW, industrial bio-waste, straw,

animal manure & sewage sludge, tall oil

pitch, crude glycerine, bagasse, grape

marcs & wine lees, nut shells, husks,

cobs, bark, branches, leaves, saw dust &

cutter shavings, LC material except logs.

These contribute to the sub-target

UCO, Cat I & II animal fats. These do NOT contribute to the

sub-target, only 2x counting towards the 10% transport

target

Algae, Renewable liquids & gaseous fuels of

non-biological origin, Carbon Capture &

Utilisation for transport purposes, Bacteria.

As well as contributing to the sub-target,

assumed also to count 4x towards sub-target

Council Response,

Oct-Dec 2013 7%

Was initially 1%

Latest

compromise is

to be at MS

discretion

None of the Annex IX feedstocks

proposed to single count

Algae, bio-MSW, separately collected bio-MSW, industrial

bio-waste, straw, animal manure & sewage sludge, POME

& EPFBs, tall oil pitch, crude glycerine, bagasse, grape

marcs & wine lees, nut shells, husks, cobs, bark, branches,

leaves, needles, tree tops, saw dust, cutter shavings, black

& brown liquor, lignin & tall oil, non-food cellulosic

material, LC material, Renewable fuels of non-bio origin.

These contribute to the sub-target, and count 2x to the

sub-target, 10% transport AND overall renewables targets


sub-target, only 2x counting towards 10% transport target

None of the Annex IX feedstocks proposed to

quadruple count

UK REA position,

Feb 2013 No

2%

only using novel

conversion

technologies

Algae, bio-MSW, industrial bio-waste,

straw, animal manure & sewage sludge,

POME & EPFBs, tall oil pitch, crude

glycerine, bagasse, grape marcs & wine

lees, nut shells, husks, cobs, bark,

branches, leaves, saw dust & cutter

shavings. These contribute to the sub-

target - assumed non-food cellulosic &

LC material except logs would as well


sub-target, only 2x counting towards the 10% transport

target

None of the Annex IX feedstocks proposed to

quadruple count

Light blue text reflects commentary on whether feedstocks count towards any sub-target, whereas text in black are just the feedstocks assigned to each multiple counting category

MS = Member State. LC = Lignocellulosic. MSW = Municipal Solid Waste. POME = Palm oil mill effluent. EPFB = Empty palm fruit bunches. UCO = Used Cooking Oil. Cat I & II = category 1 and 2.


17

3 Analysis of the multiple counting approach

In this section, we review the efficacy of the multiple-counting mechanism as an incentive for the

uptake of advanced biofuels. The review comprised a series of interviews with biofuel industry

stakeholders, along with insights gained from relevant literature and market data. The goal of the

exercise is to establish the past and current impacts of multiple-counting (drawing on experiences to

date), and to understand the future potential of the proposed multiple-counting to 2020. We also

engaged interviewees on the topic of % sub-targets for biofuels produced from novel conversion

technologies and other support mechanisms. Interviews were based around the following topics:

• The impact of double-counting to date, including stimulation of investment, uptake of new

routes, and GHG savings.

• Lessons learnt and negative impacts, including emergence of unintended consequences (e.g.

fraud), or differences in policy implementation between Member States.

• Whether proposed double or quadruple counting in the RED will be effective in stimulating

investment in advanced biofuel technologies and increasing deployment, and whether any

foreseeable unwanted effects will arise.

• The effectiveness of a proposed 2.5% sub-target for biofuels from novel conversion

technologies, and whether the target is achievable.

• The role of other policy mechanisms, including the setting of targets and a policy framework

to 2030.

In total we spoke with representatives from six organisations (fuel companies, biofuel producers and

traders, trade associations) with interests in advanced biofuels, capturing a diverse range of views on

the role of multiple counting and the best policies for incentivising advanced biofuels in the EU.

3.1 Impact of multiple counting to date

Double counting incentives have been transposed into national renewable energy obligations by

several Member States (but not all), and with considerable variation regarding the eligibility of

particular wastes and residues. For example, UCO does not count double in Denmark, and animal fats

do not count double in Germany. Some countries lacking double counting regulations all together

(e.g. Poland), or cap the amount of double counting material (e.g. France). There is also no

harmonised implementation regarding control mechanisms, verification and documentation

requirements – Italy only accepts EU feedstocks, Dutch and German verification requirements are

particularly strict, and France requires every production site to be registered.

Individual Member States are responsible for implementation of the RED and FQD, but there exist

significant variances in compliance mechanisms – for example, the UK is volume based, most other

EU countries use an energy basis, whilst Germany is expected to switch to a GHG basis in 2015. Many

member states have annual targets, but others only have interim targets at specific years. Some

mandate ethanol and bio-diesel separately, whilst others only mandate the total level of biofuel use

(as in the UK). And some member states have not yet permitted the use of certain fuels counting

towards their quota obligations (e.g. butanol is only allowed in a handful of countries). The policy

picture in Europe is therefore highly fragmented – hence including or excluding certain ‘advanced’

feedstocks from a multiple counting list might not end up being adopted by a majority of Member


18

States in a timely or consistent manner, unless the rules are very clear, definitions leave minimal

room for interpretation, and the policy is rigorously enforced.

UCO and Animal fats

All of those interviewed upheld the view that the double-counting incentive has contributed to the

uptake of UCO and animal fats as biofuel feedstocks in the EU. Evidence of this can be seen in Figure

1, in particular for UCO, whose share of the EU biodiesel feedstock base has grown significantly since

2010 – the date at which double counting began to be transposed into legislation by Member States.

Focusing on the UK, there is also reason to believe double counting has been responsible for an

increased contribution from UCO and animal fats. While the animal fat share of the biodiesel

feedstock base has dropped since 2010, higher volumes of category 1 animal fats (eligible for double

counting) now feature (Ecofys, 2013). The drop in % share can be partly explained by the shifting

preference of fuel producers towards lower-cost UCO which has flooded the market since being

incentivised. The UCOME share of UK biodiesel has increased significantly, although this is in part due

to the duty differential introduced for UCO biodiesel between April 2010 and April 2012 (RTFO Years

3 and 4). However as shown in Figure 2, the UCOME share remains high now even though the duty

incentive has been removed.

It should be noted however that the volumes of UCOME have dropped significantly between Year 4

and 5 with the removal of the duty incentive (see Figure 3). Year 5 was also the first full period in

which double counting applied, hence it makes sense that actual volumes would drop significantly if

all of this UCOME now double counts towards the target – fuel blenders suddenly needed to buy half

of the previous year’s UCOME volumes in order to comply. However, comparing Year 2 (09/10) with

Year 5 (12/13) – both years without the duty differential – UCOME volumes have still risen from 43

million litres (4% of biodiesel feedstock base) to almost 400 million litres (~80%), indicating that

double counting has encouraged greater volumes of biofuels produced from wastes to be consumed

in the UK.

Figure 1: Share of EU biodiesel consumption derived from animal fats and UCO (USDA, 2013)


19

Figure 2: Share of UK biodiesel consumption derived from UCO and animal fats (DfT, 2013)

Figure 3: UCO and Animal fat biodiesel reported under the RTFO (DfT, as of 7th

Nov 2013)

Several of those interviewed believed that the double counting mechanism has to some degree

incentivised investment in processing facilities for UCO and animal fat feedstocks. One industry

player very much welcomed the original double counting mechanism from a commercial perspective

and asserted that countries which transposed double counting into national biofuel schemes were

seen as attractive for investments in plants processing UCO and animal fats.


20

Investment Uncertainty

All interviewees expressed the view that to date, there is very little evidence of double counting

triggering investment in more novel technologies to develop advanced biofuel feedstocks (other than

UCO and animal fats which use conventional biodiesel technology). Considerable doubt was

expressed that the double counting mechanism constituted a major trigger for investment for the

few cases in Europe where such investments have been made in novel demonstration plants (e.g.

Italy, Germany and Denmark).

The argument was made by several stakeholders that multiple counting cannot be reliably factored

in when making investment decisions on novel technologies because of the difficulty in estimating

the economic value (additional revenues) that multiple-counting creates. The value of a double-

counting biofuel depends on the price of the fossil fuel baseline and the price of other competing

biofuels, both of which can be highly variable. In principle the value of the double-counting fuel is

two times the price premium of a conventional biofuel over the fossil fuel. Any volatility in the prices

of fossil fuel or conventional biofuel will be amplified in the advanced biofuel price – e.g. if the fossil

fuel price rises $0.1/gal and conventional biofuel prices fall $0.1/gal, then the advanced biofuel price

could fall by $0.4/gal. According to most interviewees, the value of the double-counting biofuel is

therefore too uncertain to justify the investments necessary to bridge the ‘valley of death’ towards

commercialisation of novel technology routes.

The point was also made that double counting only applies until 2020 and would thus only provide a

maximum of 3 years of support to plants operational in 2017 (the earliest possible start date for a

first of a kind commercial BTL or lignocellulosic ethanol plant). These 3 years of support are unlikely

to make a significant difference to the rate of return for a plant with a lifetime of 20 years or more.

A lack of progress in demonstrating technologies at scale (e.g. BTL, lignocellulosic ethanol) has also

played a major role in holding up investments, as has the general economic environment and lack of

availability of finance for riskier projects. Thus it may not be fair to judge multiple counting as an

entirely ineffective mechanism per se – although it has failed to outweigh these other difficulties.

Further discussion of the impact of policy uncertainty on investor confidence, and the lack of recent

deployment, is given in Agra CEAS (2013).

Market Prices

An assessment of commodity prices indicates that double counting has had a marked impact on

market prices of certain biofuels and feedstocks. Prices for UCO and animal fats have increased in

recent years as different Member States introduced double counting, changed regulations, tightened

certification and also started importing feedstocks to meet demands (Greenea, 2011).

From Platts (July 2013), fossil diesel was trading in Europe at ~$2.9/gal ($21/GJ), vegetable oil FAME

at ~$3.7/gal ($29/GJ), and UCO FAME at ~$4.7/gal ($37/GJ). Vegetable oil FAME has therefore been

trading at a $0.8/gal ($8/GJ) premium to fossil diesel, and UCO FAME trading at a ~$1.6/gal ($16/GJ)

premium. The market for UCO FAME has therefore reached its maximum price premium over

vegetable oil FAME, trading at a fully double-counted price. This reflects the fact that UCO FAME is

twice as valuable as vegetable oil FAME to blenders in meeting their obligations (since they need only

half the volume to comply).


21

Given the low cost of biodiesel conversion, a similar premium can also be seen with feedstock prices

(UCO is currently trading around $980-1100/t, compared to vegetable oil at $830-1010/t). However,

as recently as 2009 before double counting was introduced, UCO was trading at $400-600/t, a 25-

50% discount on virgin vegetable oils (REFUREC working group, 2011) – but UCO now trades at a 5-

20% premium (STX Services, 2013; Platts, 2013). Double counting has therefore had a marked impact

on UCO and animal fat feedstock prices in Europe – and whilst the policy may be inefficiently

providing large rents for some supply chain actors (given the low risk and commercially available

technologies involved), UCO and animal fats do still provide very significant GHG savings. Whilst

there could have been UCO and animal fats converted to biodiesel had double counting not existed

(since the feedstocks were cheaper than virgin oils in the past), double counting has been effective in

overcoming the barriers of establishing collection infrastructure and adding purification pre-

processing (total FAME conversion costs using UCO are about twice those of a plant using virgin oils).

Greenea stated in Nov 2011 that “As the supply is more or less flat, markets with lower value such as

incineration and combustion are losing this feedstock. The competition between buyers is abundantly

clear from the increasing pressure put on governments to withdraw tallow from the definition of

wastes, which is largely left open for the member states’ interpretation by the article 21 of RED”.

They also mention that “The pressure on TME is particularly high because the oleo chemical industry

does not accept the sudden rise in prices tallow has experienced since France and the Netherlands

have implemented double-counting schemes.”

Negative Consequences

Undoubtedly there have been some negative consequences with the implementation of double

counting. The main issues that were highlighted by interviewees are outlined below:

• Fraud: stakeholders pointed towards evidence of fraud in reporting of volumes of UCO, and

the perverse incentive created for artificially increasing the volumes of UCO in the market

(faster use and recycling of cooking oil to make larger profits, thereby demanding more virgin

oils, and potentially causing ILUC). Most respondents felt that with stringent chain of custody

rules these problems would be addressable, and this has already started to happen in places

such as the UK. However, some respondents identified the additional cost of such

certification as an unfair penalty to impose solely on wastes and residues, and they

advocated applying the same chain of custody procedures to all biofuels (in order to also

reduce the risk of fraud and unsustainable practices in agricultural product supply chains).

Several stakeholders stressed the importance of agreeing on clear certification rules which

should apply to all Member States in advance of implementation, but acknowledged the

difficulty in securing agreement between all countries.

• Market distortions: the fact that only some Member States have implemented double

counting measures in their biofuels policy, with varying definitions of which feedstocks are

eligible and the required levels of certification, has produced a varied price structure for

advanced biofuels across the EU. Volatile prices have also been seen during double counting

implementation as demands shifted between Member States. A continued lack of

harmonisation makes the price of advanced biofuels more unpredictable (harder to invest

in), and can reduce overall GHG savings due to feedstocks or biofuels being transported

longer distances in order to reach more attractive markets found in particular countries

(rather than being used locally). DG ENER (2013) state that “fragmentation throughout the


22

EU is counterproductive. It is more efficient and effective to focus efforts of the stakeholders

towards a limited number of blending options.”

• Impacts on other industries: it was asserted by one stakeholder that other industries which

use the same wastes and residues have been disadvantaged as a result of double counting

incentives. The example of animal fats as used by the oleochemicals industry was given, with

evidence that growing demand from the biodiesel sector in Europe has pushed the price of

the material up (ICIS, 2012).

Objectives of Multiple Counting

An assessment of the effectiveness of any mechanism requires an understanding of what its

objective is. Opinions of the efficacy of multiple counting to date diverge in the industry partly

because there is no common understanding of the objective of multiple counting.

The European renewable ethanol industry representative, ePURE, in a study on the effectiveness of

the double counting measure (ePURE, 2013) stated that the objective of double counting is “to bring

advanced biofuels onto the market which will result in diversification of the raw materials used as

well as technological innovation.” The emphasis here on technological innovation mirrors the

definition of an ‘advanced biofuel’ set out by the UK Renewable Energy Association and several

agricultural industry bodies in a joint position paper (REA et al., 2013) where they define advanced

biofuels as using “advanced processing and conversion technologies.”

In contrast, the European Biodiesel Board in their 2013 position paper adopt the definition from the

European Sustainable Biofuels Forum, which does not place an emphasis on advancing innovative

technologies – hence they consider UCO and animal fat FAME to be ‘advanced’ biofuels.

Although the role of multiple-counting in bringing forward new technologies is not explicitly laid out

in the RED, the Directive implies that the mechanism is intended to be used to encourage research

and development in such technologies. Recital 89 states “Member States may encourage the use of

biofuels which give additional benefits of diversification (...), by taking due account of the different

costs of producing energy from traditional biofuels on the one hand, and of those biofuels that give

additional benefits on the other. Member States may encourage investment in research and

development in relation to those and other renewable energy technologies that need time to become

competitive.”

However, the implemented RED and the recent proposed amendment texts do not state what the

intended impact of multiple counting is on expected volumes of any new technologies – there is no

sensitivity analysis or forecast of volumes with and without various levels of multiple counting. This

use of qualitative objectives (diversification of feedstock base, use of wastes and residues, not yet

competitive) and lack of quantitative “success” targets therefore makes it difficult to give a definitive

assessment of effectiveness of multiple counting thus far. Attempting any assessments of policy

effectiveness in the future will also be challenging if there is no common understanding reached on

the objectives of the policy.

Based on our interviews with European policymakers detailed in Section 2, we believe that the main

objective of multiple counting, and purpose behind the Annex IX lists, was to stimulate the uptake of

more sustainable feedstocks. By conducting this study, we are helping to check that these feedstocks

have a significant potential, with a low risk of unintended consequences, with likely routes to biofuel

having high GHG savings but still requiring economic or deployment support.


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3.2 Future impact of proposed multiple counting

Biofuels from novel conversion technologies

Several interviewees acknowledged the general message of support for novel conversion

technologies (i.e. excluding UCO and animal fat biodiesel) which the proposed multiple counting

proposals send out. However, concerns were expressed by several stakeholders that multiple

counting is not the most effective mechanism with which to achieve uptake of more novel

conversion technologies and the feedstocks which they utilise. Many stakeholders remarked on the

lower effective biofuel policy target which multiple-counting introduces, since only half (or quarter)

of the volumes are required in the market, compromising on GHG savings and fuel security.

Most stakeholders agreed that in the absence of other measures, multiple counting would to some

extent help increase European consumption of biofuels from novel conversion technologies.

However, in the absence of any other mechanisms (such as a food cap, sub-target for novel routes,

2030 biofuels target, loan guarantees), none of the interviewees believed that a multiple counting

mechanism on its own would be sufficient to drive investment in European biofuel plants utilising

novel conversion technologies. In other words, whilst double counting is unlikely to support EU

production, it could incentivise imports from other regions and their consumption within the EU.

Several interviewees see the US as a more appealing market for deployment of innovative conversion

technologies (see Section 3.3 for further discussion), and stated that the biofuels produced could be

exported to the EU if attractive.

Several stakeholders advocated a need for simple policies, and multiple-counting was identified by

some as a complicated policy which may need to be revised and adapted in the future (damaging

investor confidence). One stakeholder suggested that multiple counting could be made more

attractive if attached to a price floor or “contracts-for-difference” mechanism, thereby ensuring

greater certainty for investors, but these more complex options have not been widely discussed or

advocated by industry or policymakers yet.

One stakeholder criticised the absence of a clear means to introduce new feedstocks to the Annex IX

lists and believed that if there remained no scope for this, the policy would not be effective at

bringing forward novel technologies. It was argued that if the multiple-counting lists remain, there

needs to be objective qualifying criteria for adding new feedstocks so as not to exclude promising

biofuel pathways in the future.

Another stakeholder commented that the lack of replication of double counting in the FQD and the

overall renewables target imposes additional requirements on fuel suppliers and the heat and power

sectors in order to meet the overall 2020 target. The stakeholder‘s view was that if multiple counting

continues there should be harmonisation between the various mandates to address this.


24

UCO and Animal fats

All respondents believed that multiple-counting would continue to benefit UCO and animal fats. One

respondent expressed that view that double counting should be discontinued for UCO and animal

fats as public funds should be used to promote new, more expensive, conversion technologies and

widen the feedstock base. Others expressed the view that removing support for UCO and animal fats

would devastate these industries and further undermine investor confidence in the biofuels industry,

and that support should remain since these feedstocks deliver material GHG savings (plus further

infrastructure investment is required if significant household supplies are to be accessed).

Quadruple counting

Nearly all stakeholders responded negatively to the concept of quadruple counting. The following

shortcomings of this incentive were identified:

• Given the uncertainty over the economic value of quadruple counting (and its duration) this

approach will not give investors the certainty they need to back novel conversion

technologies, especially those with high capital cost requirements – and therefore will not be

successful in kick-starting the industry.

• Quadruple counting is excessive and will compromise on carbon savings – biofuels derived

from these feedstocks which achieve an 80% reduction in GHG intensity over the fossil fuel

comparator are in reality only contributing a 20% reduction within the context of the overall

target. Respondents felt that overall this would lead to lower carbon savings in 2020, thus

undermining the whole initiative. One respondent suggested that multiple counting could

only be justified if it incentivised the highest carbon saving fuels in a proportional manner

(i.e. only very high carbon saving fuels would count quadruple). We note that, from 2015,

Germany will be adopting a similar GHG savings basis for measuring compliance with their

national mandate (switching from using an energy basis).

• By the same token, some respondents expressed concerns that quadruple counting could

actually reduce the volumes of biofuels deployed from novel conversion technologies,

compared to having no quadruple counting, since this potentially could result in a previously

achievable policy target being lowered.

• Based on the experience to date with double counting, it is likely that the quadruple counting

mechanism could introduce further market distortions and inefficiencies if not implemented

uniformly across all Member States, and have too high a risk of perverse incentives being

established (as well as a high risk of fraud).

Overall view on multiple counting

While responses to multiple counting were mixed overall, shortcomings of the approach were

highlighted by all respondents. The prevailing view was that multiple counting alone will not prove

effective in stimulating a material uptake of biofuels produced using novel conversion technologies.

The lack of economic dependability was identified by most of those interviewed as the biggest

concern with this approach, and all identified alternative or complementary measures which would

better address the lack of investment in novel conversion technologies.


25

3.3 Views on other mechanisms to incentivise advanced biofuels

Sub-target for novel conversion technologies

Several respondents viewed sub-targets as a better mechanism for securing the deployment of novel

conversion technologies than multiple counting. It was generally viewed as providing more investor

certainty than multiple counting, since it guarantees a market demand. Feedback on the food cap

was mixed. It was generally held that a food cap would provide a price premium to advanced biofuels

(since it implicitly requires greater advanced biofuel deployment), but several stakeholders voiced

concerns that it would undermine investor confidence in the biofuel industry as a whole.

We did not specifically set out to ask stakeholders for their views on which combinations of policy

mechanisms could potentially be most effective, although a few interviewees did highlight concerns

that introducing multiple counting within a sub-target for novel conversion technologies would

reduce the effectiveness of the sub-target, because of reduced biofuel volumes and GHG savings.

Responses regarding the size of the sub-target were mixed. All interviewees were uncertain about

what sub-target could realistically be achieved, but nearly all believed 2.5% to be too high, especially

if it does not encompass the contribution from UCO and animal fats or does not allow multiple

counting within the sub-target. Figures of 1.5%, 2% and 3% were cited as maximum achievable

penetrations if all waste feedstocks are included, while 0.5%, 1% and 1.5% were cited as achievable if

UCO and animal fats were not included. We note that the REA advocates a 2% target for novel

conversion technologies (i.e. without UCO and animal fats) with only single counting applying within

the sub-target, which appears challenging based on these interviewee estimates.

Two respondents welcomed the high targets, believing that it would increase the value of biofuels

from novel conversion technologies. Other respondents expressed concern that an excessively high

target would impose high fines on suppliers if they are unable to meet the 2020 mandate. The risk to

the UK was highlighted – a lack of local production would expose the UK to fines or high import costs,

which would almost certainly be passed on to consumers. One source believed that introducing

alternative ways to meet the target would ease this risk (e.g. greater contribution from high GHG

saving 1G biofuels, contributions from EVs etc.).


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General policy messages

Several policy messages emerged consistently throughout the interviewees:

• A policy framework to 2030 and beyond is imperative. Biofuel targets for 2030 were strongly

advocated, but at the very least a renewable transport target for 2030 is required, in order to

provide clarity to the investment community that the output of biofuel plants using novel

conversion technologies will be advantaged for a significant proportion of their lifetime

(often 20-30 years). Given construction timelines for commercial scale plants (typically 2-4

years), having targets for only 2020 is far too close to make a meaningful difference to plant

economics and hence investment decisions. However, the EU policy picture beyond 2020 still

remains uncertain, with GHG and/or energy targets yet to be agreed for 2030.

• Policy uncertainty in the EU is a major cause for concern, particularly for those with interests

in novel routes. There is evidence that the protracted ILUC debate has stifled investment

over the last few years, in both conventional and advanced biofuel sectors. Stable and

transparent policies which minimise the need for revision were advocated by almost

everyone. DG ENER (2013) state that “A stable market outlook – until 2020 and beyond – is a

crucial condition for stakeholders to invest in the developments needed for the various

marketing options. Stable, effective and longer-term biofuel strategies and policies, both on

EU and Member State level, are conditions for successful implementation”

• The US is currently a more attractive place than the EU to invest in the development of

novel conversion plants. Stakeholders believe that there is more policy certainty and clarity,

as well as financial support, in the US:

o Clear carve-outs for ligno-cellulosic ethanol and ‘advanced’ (sugarcane ethanol)

biofuels which deliver high GHG savings

o Generous grants offered by the Department of Energy

o Access to loan guarantees with attractive terms

o Supply-side incentives (e.g. Biomass Crop Assistance Program)

• Clear criteria should be set out for the definition of an ‘advanced’ biofuel which would

determine whether or not particular feedstocks are eligible to be multiple counted or

contribute to a sub-target. There was some disagreement over what the criteria should be.

While all agreed that the general sustainability and GHG savings delivered by the biofuel are

important, there was disagreement over whether the definition of ‘advanced’ should require

the fuel to be derived through ‘advanced’ processing technologies and thus incentivise novel

conversion technologies – or whether FAME biodiesel from UCO and animal fats should

continue being classified as ‘advanced’.


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4 Feedstock information

4.1 Feedstocks to consider in/out of scope

From an assessment of the REFUREC working group lists, RED policy proposals and stakeholder

interviews, we identified a small selection of feedstocks that deserve further discussion in the

context of this study’s scope. Some of these feedstocks could potentially be deemed as missing from

the proposed Annex IX lists, or worthy of forming a feedstock sub-category. Some of these

feedstocks appear not to have been considered in the drafting of Annex IX, whilst others were

excluded on purpose (and should not be included in Annex IX). We discuss these feedstocks in the

context of this study’s scope below:

• Crude tall oil. This is a refining feedstock for the production of fatty acids, rosins and sterols,

with Tall oil pitch a distillation by-product (already listed separately). The Commission

considered crude tall oil to be too valuable, and hence removed it from their lists to avoid

what were seen as obvious displacement risks. We note that the latest Council response lists

“tall oil”, which may therefore re-include this feedstock.

• Black & brown liquor. Similar to crude tall oil, the Commission suggested that because of the

value of soapy black liquor in relation to producing crude tall oil and recycling chemicals

within the mill, it had been excluded. Whilst this feedstock was missing from the Oct 2012

Commission lists, during the course of the study, the Council included black & brown liquors

within their Oct 2013 response. We have therefore assessed black & brown liquors in this

study, and note that it is possible to produce biofuels whilst recycling the required chemicals.

• Category III animal fats. Given these are the least contaminated of the animal fats, and

contain many sub-categories that are fit for human (and livestock) consumption, Category III

animal fats were removed from the Commission lists to avoid food competition.

• Small round-wood/pulp-wood: The Commission excluded high value wood (saw logs and

veneer logs) from Annex IX, as they did not wish to promote deforestation or their use in the

lower value energy sector. However, they had not thought beyond large logs to potentially

excluding small round-wood/pulp-wood, due to a lack of information at the time – hence

these smaller trees are still currently allowable under the proposed “Ligno-cellulosic material

except saw logs and veneer logs”.

• Sugarcane trash. A potentially large uncollected resource (especially with the move to ban

in-field burning in Brazil), but subject to sustainable extraction limits. However, within Annex

IX this trash resource would likely be covered under the broad description of “Straw” as a

feedstock, and hence will not require separate analysis.

• Bark, branches and leaves. Bark is currently placed together with forestry residues – but one

stakeholder has noted that this is relevant only if debarking is immediately after felling and

before forwarding the timber. Today, this practice is very rare - in normal forestry

operations, bark arises as a processing residue from debarking inside pulp-mills and saw

mills. Therefore, logically bark should be grouped together with saw dust & cutter shavings,

instead of with branches and leaves. However, since all the RED proposals list bark, branches

and leaves together, we also retain this structure for consistency.


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• Olive pits. Along with a range of other high energy content agricultural residues recently

used for biomass co-firing in power stations, this resource could likely be covered under a

wider definition of Husks.

• Bio-waste as defined in Article 3(4) of Directive 2008/98/EC from private households

subject to separate collection as defined in Article 3(11) of that Directive. We note that this

feedstock has not been separately considered in this study, as it was only proposed for

separate consideration by the Council in November after our study analysis was complete.

This resource is therefore simply included within the bio-fraction of MSW feedstock

alongside the other MSW streams, and not considered separately.

• Carbon Capture and Utilisation (CCU) for transport purposes. There are several different

methods of capturing carbon that could be interpreted to fall within this description.

Lanzatech is actively developing a syngas fermentation technology for producing ethanol

from steel mill basic oxygen furnace (BOF) gases, i.e. a mix of gases with up to about two

thirds carbon monoxide. We are therefore assuming in the context of this study (with its

2020 focus), that CCU is only likely to describe these steel mill “waste carbon gases”. Other

carbon gases, such as CO2 streams from power stations, could be captured in large volumes

by 2020 depending on the development of CCS demonstration projects. However, the

technologies to then convert these CO2 streams into a transport fuel are at a low level of

commercialisation, hence these CO2 streams will not be a relevant transport feedstock in the

2020 timeframe, and are ignored in our resource assessment. There has been debate

regarding whether CCU is permissible as a “biofuel” under the RED, given the fossil carbon

being used. There would need to be close attention paid to the fact that the producer of the

carbon-rich feedstock gas still needs to account for fossil GHG emissions to atmosphere –

since e.g. the steel mill and the biofuel producer cannot both claim they are zero carbon.

• Renewable liquid and gaseous fuels of non-biological origin. Similarly, there are numerous

materials that could fall under this description. However, producing hydrogen for transport

via renewable electrolysis of water is the only likely fuel pathway to be developed at scale by

2020 – i.e. renewable electricity is the “feedstock” considered in this study. We note that this

feedstock is for input into renewable electrolysis – it is not for use directly in battery electric

vehicles (out of scope of this study). Other options to keep a watching brief over, but at a

lower level of commercialisation, are methods of synthesising long-chain hydrocarbons

directly from a combination of atmospheric CO2 and renewable electrolysis hydrogen.

• Bacteria. It is very unclear as to what “Bacteria” is actually meant to encompass, and

whether it is actually a process, not a feedstock. Known metabolic pathways have to rely on a

source of carbon atoms (e.g. sugars) in order to produce a fuel – or if instead using

atmospheric CO2, they require an energy source (e.g. sunlight, electricity, iron, sulphur,

ammonia). There is no definition available or any further information regarding potential

project developers looking to produce biofuel from this route (and no obvious match in the

public domain, as is the case with Lanzatech and “Carbon Capture and Utilisation”). None of

our interviewees were able to provide further insight. We therefore judge that this category

is both unlikely to produce commercial quantities of fuel by 2020, and given the uncertainty

(and bacterial options that use sugars) its inclusion in the Annex IX list presents a higher risk


29

than excluding it for the time being. It could however potentially be included in the future

once more information becomes available.

In its October 2012 ILUC proposals, the Commission provided short definitions for some of the Annex

IX feedstocks (either in Annex IX or upfront in the Recitals), but many are missing, unclear or

potentially overlapping. Discussions are ongoing on firming up these definitions, however, there is

not yet a single definitions document being pulled together for this purpose. Apparently, this is only

likely to happen once (or if) the lists are agreed upon, along with confirmation of any sub-target for

novel conversion technologies, a food cap and the multiple counting levels. Terms are starting to be

included in the Council draftings, but it will ultimately be down to the Presidency as to what gets

added to the latest drafts. There is recognition that to have any real impact, these definitions will

need to be provided (and confirmed) before any Directive amendment gets passed into law – there

may therefore only be a limited window of opportunity between final consensus and voting.

In Appendix B, we provide our latest understanding of the feedstock definitions, highlighting any

particular points of contention or uncertainty. Over the course of the analysis we split several of the

“feedstock” groups into more useful sub-categories, given the different physical and economic

characteristics requiring disaggregation. For example, “animal manures & sewage sludge” naturally

splits into two sub-categories, “animal manures” and “sewage sludge”. A full list of sub-categories

analysed is given in Appendix C. For those feedstocks selected for analysis, we collected descriptive,

supply, technical, sustainability and economic information as summarised in the sections below.

4.2 Descriptive information

We have collected information from numerous public sources regarding the following basic

qualitative information for each feedstock:

• Definition (summarised in Appendix B), and classification as given by the 6 participants in the

REFUREC working group

• Typical moisture content, energy density and volumetric density (at point of collection)

• Likely locations/regions of availability

• At what point on-farm or in industrial supply chains the waste or residue is generated – or if

the material is a product grown specifically for biofuels, how it is grown and what land is

typically used (this is covered in Section 4.5)

• Any particular transport issues

This information has been summarised in Table 3 below, with feedstock specific details provided in

the factsheets in Appendix C. Please note that the data presented are often sourced from in-depth

analysis conducted in other studies (e.g. on resource potentials), and hence are only indicative. Wide

ranges exist in many cases, depending on the region and different national practices, the season of

harvest and weather impacts year-to-year, and supply chain and any pre-processing steps followed.

In particular, MSW and Commercial & Industrial wastes are not homogeneous feedstocks, and have

very wide ranges, since these resources are comprised of multiple different waste streams.


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Table 3: Summary of descriptive information

Feedstock State Moisture content % LHV (GJ/t) Density

(g/cm3)

Transport issues Classification and land

use Key regions for production

Bio-fraction of MSW Solid general 60%

food 70% 6.3 0.50 Toxicity Waste Population centres

Bio-fraction of C&I waste Solid food 60%

paper, wood 10-20% 7.0 0.50 Toxicity Waste Population centres

Straw Solid 15% 15.0 0.14 Low density Agricultural residue Arable cropping

Corn Stover Solid 13% 14.0 0.20 Low density Agricultural residue Corn regions (US, China, Brazil)

Animal manure Liquid wet manure 90%

poultry litter 35% 1.3* 0.99

Odour, high water,

bio-toxicity Agricultural residue Intensive livestock farming (NW EU)

Sewage Sludge Liquid 96% 0.5* 1.00 Odour, high water,

bio-toxicity Waste Developed population centres

Palm oil mill effluent Liquid 96% 0.8* 1.00 High acidity, water Process residue Malaysia, Indonesia

Empty palm fruit bunches Solid 64% 4.5 0.18 Low density Process residue Malaysia, Indonesia

Tall oil pitch Liquid 0% 38.0 0.95 Toxicity Process residue Pulp/paper mills (US, N EU, E Asia, Brazil)

Crude glycerine Liquid 10% 14.2 1.20 Process residue FAME biodiesel plants (EU, US)

Bagasse Solid 48% 7.8 0.20 Low density Agricultural residue Sugarcane (Brazil, India)

Grape marcs & wine lees Solid 65% 6.2 0.90 High water Process residue Wine regions (Med.)

Nut shells Solid 10% 16.4 0.58 Agricultural residue Nut regions (US, Med., SE Asia)

Husks Solid 10% 13.0 0.035 Low density Process residue Rice regions (China, SE Asia)

Cobs Solid 20% 12.4 0.27 Agricultural residue Corn regions (US, China, Brazil)

Bark, branches, leaves Solid 30% after natural drying 12.4 0.15 Low density Forest residue Existing forest (N EU, N America, Russia)

Saw dust & cutter shavings Solid 20% after drying 15.2 0.35 Process residue Forest industry (N EU, N America, Russia)

Black and brown liquor Liquid 25% 12.0 1.40 Corrosion, toxic Process residue Pulp/paper mills (N EU, N Am, Brz, E Asia)

UCO Liquid 0% 36.0 0.91 Process residue Population centres

Animal fats Cat I & II Solid 0.3% 32.7 0.83 Toxicity Process residue Livestock rendering plants

Miscanthus Solid 16% 13.4 0.14 Low density Product: land using Agricultural land in temperate climates,

avoiding frosts (US, Western EU)

Short rotation coppice Solid 30% after natural drying 12.3 0.24 Product: land using Agric land with high moisture availability

SRF/small round-wood Solid 30% after natural drying 12.3 0.24 Product: land using Existing forest (N EU, N Am, Brz, Russia)

Micro-algae Liquid oil 0% 36.0 0.92 Product: minimal area Warm, sunny climates (MENA, US Gulf)

Macro-algae Solid seaweed 85% 2.0* 1.03 High water Product: sea area using Coastal waters (NW EU, E Asia, Chile)

Renewable electricity Electricity 0% NA NA Grid balancing Product: minimal area High renewable deployment (EU, US, China)

Waste carbon gases Gas 0% 6.2 0.0014 Auto-combustion Process residue Steel mills (China, US, central EU)

Energy densities marked with * are theoretical biogas yields, not the Lower Heating Value of combustion (which would be negative, given the high moisture contents). We note that the EC

classify bagasse and nut shells as agricultural residues, when in fact they are residues of a downstream processing step (sugarcane milling & juice extraction, or de-hulling).


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4.3 Supply potentials

This section assesses the current and 2020 supply potentials of each feedstock, along with the

current and 2020 advanced biofuel production potentials using the feedstock. The feedstock supply

data in Table 4 is presented in million tonnes per year – this is at the standard moisture contents

given in Table 3 (and not in oven dried tonnes). This supply data presents the technical potential of

each feedstock – i.e. the amount of bioenergy resource that can be sustainably collected or grown,

but without considering any competing uses.

• For agricultural residues (such as straw and cobs) and forest residues, these potentials are

lower than the total theoretical potentials, because a significant percentage has to be left to

maintain soil quality. These sustainable collection potentials are given before any other

competing uses are considered.

• For wastes – such as household UCO, the bio-fraction of MSW and industrial waste streams,

palm oil mill effluent and sewage sludge – we present the total waste arising and collected,

but before any recycling, energy recovery or disposal.

• For processing residues – such as commercial/industrial UCO, animal fats, empty palm fruit

bunches, crude glycerine, husks, nut shells, bagasse, grape marcs & wine lees, saw dust &

cutter shavings, black & brown liquor and waste carbon gases – all of these resources are

presented as arisings available for collection, but before any further uses or disposal.

• For “new growth” products grown specifically for bioenergy – such as energy crops, short

rotation forestry, small round-wood and algae – these are presented as the total resource

grown and harvested, but before any other competing uses are considered.

• Renewable electricity is presented in Mtoe/yr instead of Mt/yr, and displays the total size of

the renewable electricity market (not just input power for electrolysis), i.e. before other

competing uses for the electricity are considered. To avoid double-counting of biomass

electricity (e.g. from forestry), we are only considering non-bioenergy renewable power.

The main data sources used for the feedstock supply analysis are: E4tech (2011), NNFCC (2011),

Biomass Futures (2012), Ecofys (2013b; 2013c), plus data from IIASA (2012) and a variety of other

public sources for individual feedstocks. In some cases, reliable data for current feedstock supply was

not available, hence we estimated potentials either by summing available data from key producing

countries, scaling up (or down) data from global or EU estimates, or assuming split-outs where only

combined data was available for several feedstocks. These more uncertain data points are flagged in

Table 4, and may require further (perhaps primary) research to increase the reliability of the data.

Table 4 also provides an indication of any likely expansion after 2020, i.e. whether each feedstock

supply potential is expected to increase significantly to 2030 (↑), is close to a maximum/not

expected to expand further (↔), or is likely to decrease to 2030 (↓). Based on the technology

efficiencies from the selected pathways in Section 4.4, the final columns of Table 4 also provide the

feedstock potentials converted into finished biofuel, in Peta Joules per year. Importantly, these

biofuel production potentials do not consider the availability of sufficient novel conversion plant

capacity to use the feedstocks – these constraints are considered in the ongoing Feasibility study.

However, this is a key distinction between those feedstocks that are supply limited (e.g. UCO and

animal fats), and the majority of other feedstocks that are conversion plant limited.


32

Table 4: Summary of feedstock supplies (in wet “as received” tonnes) and biofuel production potentials (i.e. without conversion plant capacity constraints) – both

before any competing uses for the feedstock are considered

Feedstock

Current feedstock supply

(wet Mt/yr)

2020 feedstock supply

(wet Mt/yr) Expansion post 2020? Data

quality

Current biofuel production

potential (PJ/yr)

2020 biofuel production

potential (PJ/yr)

UK EU Global UK EU Global UK EU Global UK EU Global UK EU Global

Bio-fraction of MSW 22 189 861 22 147 1,039 ↓ ↓ ↑↑ Medium 68 591 2,694 68 460 3,253

Bio-fraction of C&I waste 25 133 560 25 104 690 ↔ ↔ ↑↑ Medium 85 460 1,941 87 359 2,390

Straw 7.4 - 11 72 885 7.4 - 11 155 934 ↔ ↓ ↑↑ High 52 405 4,963 52 870 5,240

Animal manure 68 1,521 16,202 68 1,340 18,866 ↔ ↑ ↑↑ Medium 43 969 10,320 43 853 12,016

Sewage sludge 35 632 1,069 37 648 1,183 ↑↑ ↑ ↑↑↑ High 9 161 272 9.5 165 301

Palm oil mill effluent 0 0 159 0 0 338 - - ↑↑↑ High 0 0 60 0 0 127

Empty palm fruit bunches 0 0 51 0 0 109 - - ↑↑↑ High 0 0 81 0 0 172

Tall oil pitch 0.001 0.16 0.4 0.001 0.19 0.5 - ↑↑ ↑↑ High 0.02 5.3 14 0.02 6.6 17

Crude glycerine 0.03 1.0 2.9 0.04 1.4 4.9 ↔ ↔ ↑↑ High 0.25 8.3 25 0.36 12 42

Bagasse 0 0 413 0 0 599 - - ↑↑↑ High 0 0 1,205 0 0 1,748

Grape marcs 0.02 4.1 7.7 0.02 4.1 8.5 ↔ ↔ ↑ High 0.05 9.5 18 0.05 9.5 20

Wine lees 0.004 0.8 1.5 0.004 0.8 1.6 ↔ ↔ ↑ High 0.01 2.6 4.9 0.01 2.6 5.4

Nut shells 0 0.8 10 0 0.8 11 - ↔ ↑↑ Medium 0 4.5 55 0 4.5 61

Husks 0 0.5 120 0 0.5 133 - ↔ ↑↑ Medium 0 2.3 583 0 2.3 645

Cobs 0.01 3.6 36 0.01 3.6 40 ↔ ↔ ↑↑ High 0.04 17 167 0.04 17 185

Bark, branches, leaves 3.4 127 317 3.4 122 316 ↔ ↔ ↑ Medium 15 554 1,377 15 532 1,376

Saw dust & cutter shavings 1.6 37 104 1.6 42 115 ↔ ↑↑ ↑↑ High 8.5 199 552 8.5 221 614

Black and brown liquor 0.28 66 200 0.28 72 246 - ↑ ↑ High 1.9 459 1,392 1.9 498 1,714

UCO 0.13 1.1 2.8 0.19 3.0 7.8 ↔ ↔ ↑↑ High 4.3 37 94 6.6 102 266

Animal fats Cat I & II 0.12 1.2 3.5 0.12 1.3 3.8 ↔ ↔ ↑↑ High 3.7 38 107 3.7 39 119

Miscanthus 0.12 0.9 1.2 0.36 4.1 4.7 ↑↑↑ ↑↑↑ ↑↑↑ Medium 0.6 4.6 6.2 1.8 21 24

Short rotation coppice 0.04 0.3 9 0.11 1.3 11 ↑↑↑ ↑↑↑ ↑↑↑ Medium 0.15 1.2 39 0.46 5.6 47

Short rotation forestry 0 0 0 0 0 0 ↑↑↑ ↑↑↑ ↑↑↑ High 0 0 0 0 0 0

Small round-wood 3.3 333 829 3.3 310 772 ↔ ↑ ↑ High 14 1,417 3,523 14 1,320 3,282

Micro-algae 0 0 0 0 0.0001 0.015 - ↑↑ ↑↑↑ High 0 0 0 0 0.002 0.51

Macro-algae 0 0 0.01 0.01 0.24 2.2 ↑↑↑ ↑↑↑ ↑↑↑ High 0 0 0 0.01 0.24 2.2

Renewable electricity (Mtoe) 2.2 51 403 7.8 82 575 ↑↑↑ ↑↑↑ ↑↑↑ High 67 1,536 12,142 235 2,455 17,316

Waste carbon gases 0.9 10 101 0.9 10 138 ↔ ↔ ↑↑ Medium 3.3 36 375 3.3 37 511


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4.4 Technologies

This technology feasibility section is presented separately from the feedstock feasibility section, since

many of the feedstocks share similarities in the types of conversion technology they can be used in –

it is therefore more useful to give information on the whole list together, rather than for each

feedstock individually.

4.4.1 Suitability

There are many conversion technologies capable of transforming the Annex IX feedstocks into

biofuel – most of which have several conversion steps via intermediate products. The main

technologies under development with relevance for the 2020 timeframe include thermochemical

routes such as gasification and pyrolysis, and biological routes such as anaerobic digestion and

enzymatic hydrolysis. Other technologies further from commercialisation (e.g. hydrothermal

liquefaction, supercritical water gasification) are not in scope, hence not shown here. From the

intermediate products of syngas, bio-oil, biogas, sugars and lipids that we are considering, a wide

variety of different molecules can be created, using technologies such as catalysis, refining,

fermentation and purification.

The full list of feedstocks, conversion technologies, intermediates, upgrading technologies and final

products is shown below in Figure 4. This pathways map shows which feedstocks can be used in

which technologies, and the main steps required to reach a finished biofuel.

For clarity and brevity, similar sub-technologies and processes have been grouped together (e.g.

different gasification reactors such as entrained flow, bubbling, circulating fluidised bed, or fixed bed

have all been included within “Gasification”). We are also not highlighting any individual technology

developer or organisation – a summary of the status of industrial activity in each of the technology

pathways, highlighting the key actors and developers, will be conducted in the Advanced Biofuel

Demonstration Competition Feasibility study.

Co-products and other process inputs are also not shown in Figure 4. The most important co-

products in terms of revenues (and GHG emissions benefits) include glycerine for FAME biodiesel,

digestate for anaerobic digestion, acetone if producing butanol and ethanol together, char from

pyrolysis, naphtha for HVO and FT catalysis, heavy or light ends from refining, heat & power (from

lignin, off-gas combustion or exothermal chemical reactions), and oxygen from electrolysis.

Each feedstock has also been assigned a principal conversion pathway (to represent its most likely

route to producing an advanced biofuel by 2020), in order that the GHG assessment below in Section

4.7, and the economic assessment below in Section 4.5, can be conducted based on this selection.

The feedstock is coloured to match this principal conversion pathway – e.g. UCO, animal fats and

micro-algae are all grey, to reflect their conversion into FAME biodiesel. These principal routes are

however not the only option open to each feedstock – as shown in Figure 4, each feedstock could be

processed in a number of conversion technologies. During the GHG and economic sections below, we

will discuss how the results for the selected pathways could vary had different pathway choices been

made instead.


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Figure 4: Potential conversion pathways from each Annex IX feedstock to biofuel. Most likely options (selected for analysis) shown by bold highlights


35

Technology flexibility varies – some conversion processes are able to use a variety of different

feedstocks, whereas others have much more strictly controlled requirements. We note that because

the feedstocks are often not homogeneous, some fractions of a particular feedstock may not be

suitable for use in a certain technology – e.g. MSW includes waste wood fractions which are not

suitable for anaerobic digestion. Figure 4 is therefore a high level picture of the suitability of each

feedstock based on its major components (e.g. food, green and paper wastes dominate within MSW).

• Oils and fats are most suitable for conventional biodiesel routes (trans-esterification to

FAME and hydro-treatment to HVO). FAME and HVO both require a purification step to

ensure the conversion is not affected by any catalyst poisons – purity requirements are

stricter for HVO. FAME cannot take any feedstocks other than lipids (oils and fats dissolve in

the methanol), and whilst lipids are also the preferred feedstock for HVO, the higher

processing temperatures and addition of hydrogen does also allow heavier oleochemical

refinery products (such as tall oil pitch) to be used.

• Anaerobic digestion is suitable for a wide range of feedstocks, including food waste,

agricultural waste, manures, sewage sludge, abattoir waste and specifically grown crops. AD

plants are increasingly commonly being designed to use a mixture of feedstocks, although for

optimal fermentation conditions, the composition of the feedstock should be fairly

consistent, as should the rate of feeding (NNFCC, 2011). AD systems are engineered to create

the right climatic conditions for anaerobic bacteria, and to efficiently isolate the useful

product streams (methane and digestate). There are many AD system configurations: wet

slurry systems (common in the UK) take high water content feedstock, whereas dry digestors

(common across Europe) are more suitable for silage crops, straws and energy grasses. The

main feedstock requirement is that there is a high % of volatile solids, and low amounts of

indigestible components such as lignin. Fatty feedstocks typically produce higher methane

yields than carbohydrate or protein rich materials. AD technology costs are highly dependent

on scale (with upgrading and grid injection equipment contributing significantly at small

scales), and the amount of additional infrastructure required (e.g. wastes processing).

• The fermentation of lignocellulosic feedstocks is significantly more complicated than “1G”

sugar fermentation, due to the complexity of the feedstock and the challenge in deriving

fermentable sugars. Lignocellulosic material contains both hexose (C6) and pentose (C5)

sugars in the complex polymer forms cellulose and hemicellulose, which are bound by lignin.

Feedstock pre-treatment is required to unlock these C6 and C5 complex polymers from the

lignin, followed by hydrolysis of the polymers to sugar monomers, and then fermentation of

sugars to the biofuel product. Ideal feedstocks therefore have low amounts of highly soluble

lignin, high reactivity of the cellulose and hemicellulose, low crystallinity of the cellulose and

high porosity of the material. C6 sugars are also more cheaply and efficiently fermented than

C5 sugars, hence the starting composition of the feedstock is important. It is also important

that the by-products from pre-treatment and hydrolysis are minimised, as these can inhibit

fermentation – feedstocks should minimise ash and acetyl contents. As shown in Figure 4, all

the woody biomass and agricultural residue feedstocks would be suitable for lignocellulosic

ethanol or butanol production (enough flexibility in pre-treatment options), although yields

will vary significantly.


36

• Pyrolysis conversion technologies cover a range of different temperatures and reactor

designs; however, fast catalytic pyrolysis is the usual choice for maximising liquid yields in the

shorter residence time, and minimising solid and gaseous by-products. Feedstocks most

suitable for fast pyrolysis are those low in moisture and ash, with a high volatile matter

content. Being able to be easily chipped or reduced to a small particle size is also important

to improve reaction dynamics. As shown in Figure 4, all the woody biomass and agricultural

residue feedstocks would be suitable for pyrolysis, as are the drier fractions of manure, MSW

and industrial wastes (although output oil quality could vary significantly).

• Gasification also covers a range of different temperatures and reactor designs; however,

making a syngas suitable for further upgrading into liquid or gaseous biofuel will usually limit

the choices to those gasifiers operating without nitrogen dilution (i.e. oxygen or steam-

blown), and at high temperatures (purer syngas with less tars). Feedstock requirements vary

considerably between gasifier designs, with plasma gasifiers being the most tolerant to

heterogeneous feedstocks (typically taking mixed wastes), down to entrained flow gasifiers

needing very stringent criteria to be met (small, uniform particles). Wetter feedstocks will

typically produce more hydrogen and methane in the syngas (and less CO and CO2) – the

methane is an advantage for bioSNG synthesis, but a disadvantage for longer-chain FT

catalysis. However, wetter feedstocks also reduce efficiency and gasification temperatures

making tars more likely. Ash content and its melting characteristics are important, since

molten ash can cause serious agglomeration of fluidised bed designs. Pressurised operation

is an advantage for downstream catalysis processes, but requires careful preparation and

sizing of the feedstock to avoid input clogging issues – some agricultural residues are

problematic in this aspect, with developers historically preferring cleaner woody materials

instead of straw or bagasse. In general, similar to pyrolysis, ideal feedstocks for gasification

have low moisture and ash, and a high volatile matter content. As shown in Figure 4, all the

woody biomass and agricultural residue feedstocks would be suitable for gasification

(depending on the gasifier design chosen), as are the drier fractions of manure, MSW and

industrial wastes (although output syngas could vary significantly).

4.4.2 Commercialisation status

Different technologies within the pathways shown in Figure 4 are at different levels of maturity. A

commonly used scale to illustrate relate levels of maturity is the TRL (Technology Readiness Level),

with TRL 1-4 being lab based, TRL 5 pilot stage, TRL 6-7 demonstration stages at larger scale, and TRL

8 a first commercial plant, leading to mass deployment at TRL 9.

The current TRL status of the main conversion technologies is given below in Figure 5. This highlights

that only a few routes are fully commercial and widely deployed – namely, “1G” ethanol (C6 sugar

fermentation) and “1G” biodiesel (FAME esterification). HVO and AD + biogas upgrading have been

more recently commercialised – however, there is then a noticable gap with the majority of

technologies currently at the TRL 4-6 stage, reflecting the difficulties faced by innovative

technologies in overcoming the commercialisation “valley of death”.


37

Figure 5: Current TRL status of the main conversion technologies

Progress in scaling up and demonstrating new conversion technologies has been mixed in recent

years. Technologies that have made significant progress to TRL 6-7 include: LC ethanol (several

different pre-treatment technologies being used in the US and EU) and Syngas fermentation (from

biowaste and steel mill gases), with demonstration plants built recently. Gasification + Methanol has

already reached TRL 8, but only using crude glycerine to date (which is much easier to process into

syngas than solid biomass). Gasification + bioSNG and Pyrolysis oil + upgrading are also making good

progress from the pilot stage with demonstration plants in construction and start-up, whereas

Gasification + DME and Aqueous phase reforming routes are still waiting on a significant scale

demonstration step to be taken – but developers remain active.

Notably, 1G butanol has seen relatively slow progress, with developers and oil majors now projecting

much lower capacity coming on-stream or being retrofitted by 2020, compared to the peak of the

hype surrounding butanol in 2010. We do however note that there are active Acetone-Butanol-

Ethanol (ABE) plants operating in China. LC butanol routes are unlikely to be followed until LC

ethanol and 1G butanol have been sufficiently developed.

In recent years, BTL (Gasification + FT catalysis) has suffered with leading developers becoming

insolvent or abandoning planned projects – although a few technology providers do still remain.

Similar set-backs have occurred for Gasification + Mixed alcohols. Whilst the technology

components for these routes are relatively well known, de-risking and accessing finance for such high

capital cost projects remains a major challenge.

Research CommercialPilot Demonstration

Gas if + Methanol

1G ethanolLC ethanol

AD + Biogas upgradingGasif + H2

TRL

Gas if + Mi xed alcohols

Pyrolys is oil + upgrading

Gas if + FT

Gas if + DME

Syngas fermentation

Gas if + bioSNG

Renewable electrolysis

1G butanol

Aqueous phase reforming

Aerobic fermentation

CO2 + H2 catalysis

1-3

LC butanol

4 5 6 7 8 9

FAME

HVO

(us ing glycerol)


38

Interestingly, Gasification + H2 was investigated by researchers as early as 2000, but has been on

hold since due to unattractive economics versus natural gas reforming. Micro-algae and aerobic

fermentation of sugars is at the pilot scale, but some developers are now focusing first on the

extraction of high-value chemicals instead of biofuels. A macro-algae sea trial was also recently

damaged beyond repair, but other sites and interest remain globally.

Based on industry experience, and project construction timelines, new biofuel technologies can take

3-5 years to progress by one TRL. Although several developers used to have ambitious plans for

scaling up, and avoiding intermediate demonstration steps (e.g. going straight from TRL 5 to 8), many

of these companies have been unsuccessful, or not progressed – the current industry is noticeably

much more cautious in their announcements. There is still potential for developments in one chain to

promote another chain (“piggy-backing”) – e.g. wood gasification scale-up, micro-channel catalysis,

or retrofitting of 1G ethanol plants to use lignocellulosic feedstocks and/or produce butanol. We

note some technologies are likely to require development using lower cost 1G sugar feedstocks,

before making the switch to lignocellulosic sugars, but this discussion is outside of the project scope.

There are therefore only a handful of advanced biofuel pathways that could contribute meaningful

volumes of biofuels by 2020 (i.e. reach TRL 8), in addition to those already at this stage (1G ethanol,

FAME, HVO, AD + upgrading). These include technologies currently at TRL 6 or higher, such as LC

ethanol, 1G butanol (and potentially LC butanol), pyrolysis oil upgrading and gasification routes to

syngas fermentation, FT, methanol, mixed alcohols and bioSNG. All these routes have a chance

(depending on the investment environment, public support and relative economics) of overcoming

the “valley of death” and finally scaling up. Renewable electrolysis could also make a contribution

depending on the roll out of hydrogen infrastructure.

4.5 Economics

This economics section presents current market value data for each Annex IX feedstock, along with

the estimated biofuel production costs for each of the selected supply chains.

Price data for each individual feedstock (in £/t and £/GJ) is presented in Table 5. Some feedstocks are

very rarely traded (e.g. black liquor, bagasse, husks, grape marcs & wine lees), hence the data is

particularly thin. Other feedstocks are either assumed by various references to have a zero price (e.g.

animal manure, sewage sludge, POME), or command a negative price to reflect gate fees for

anaerobic digestion (e.g. MSW, industrial wastes). Micro-algae and macro-algae prices have been

estimated from their current production costs.

We note that these prices are indicative ranges only, as they are subject to market fluctuations over

time, often show significant geographic variation, and also depend on volumes, contract terms and

the feedstock quality (which again can vary massively). We have presented ranges where the data is

available, but giving priority to most recent data sources (e.g. we are not presenting UCO price data

from 2011 and 2012, as this has been superseded by 2013 prices).

Based on these feedstock prices, and the point in the supply chain at which they apply, we have then

been able to derive the costs associated with each full supply chain, from feedstock through

conversion to delivered fuel at a refilling station. The main data sources used in this analysis were:


39

• Feedstock and biofuel transport costs, natural drying and chipping costs: Based on supply

chain costs collected during E4tech (2010), updated during our work for the ETI’s Biomass

Value Chain Modelling project, and validated with 2013 industry confidential data

• Biofuel conversion plant costs and efficiencies: Based on data from SKM (2011), Humbird et

al. (2011), European Commission (2011), Neste Oil (2006; 2007; 2008), Swanson et al. (2010),

Hamelinck & Faaij (2006), IRENA (2013), Bowen et al. (2010), RENEW (2008), AMEC (2009),

Roads2HY (2009) and Holmgren (2013). Updated in ETI Biomass Value Chain Modelling

project, and validated with 2013 industry confidential data

Import tariffs come from WTO (2013), with Distribution and refuelling costs from APEC (2011), Caula

(2011) and Roads2HY (2009).Table 6 presents the outcomes of this analysis. The regions selected are

examples of where the feedstock is likely to be produced in large quantities, and then the rest of

the supply chain is based on the most likely biofuel conversion pathway and downstream distribution

to enable the consumption of the biofuel somewhere within Europe.

In some cases the feedstock is only produced in one region, hence the choice of example region is

straight-forward. In other cases, there are a large number of different production regions and

possible supply chains – but for the sake of conducting a meaningful and understandable analysis of

the biofuel economics and GHGs, we mainly only focused on one example route/region. Exceptions

where we have considered more than one chain are corn stover (the US version of EU straw), and

small round-wood (in both the US and in the EU), we judged that these regions could be equally likely

to produce a fuel that ends up in the UK. For the wastes, we mainly chose the UK as the region of

interest, because AD biomethane is unlikely to be shipped into the UK from elsewhere globally (a

similar reason to why POME is excluded from the economic and GHG analysis).

Key points to note are that the costs of each step are given in terms of £/GJ biofuel – hence the

upstream feedstock cultivation and handling steps have been divided by the biofuel conversion

efficiencies (GJ main output/GJ feedstock). Transport costs depend strongly on the distance and

feedstock volumetric density, hence the particularly high transport costs for empty palm fruit

bunches, husks and bark, branches & leaves. Distribution and filling station costs are fairly uniform

across all the chains (except for less mature hydrogen infrastructure), with shipping biofuel to the EU

and paying import tariffs also adding to costs.

The highest biofuel production costs are seen for macro-algae and micro-algae, reflecting the fact

that algae cultivation is yet to be commercialised. Renewable electrolysis is currently an expensive

way of producing transport fuel, due to the cost of the electricity. Bio-methanol is also expensive,

since crude glycerine costs have risen sharply in recent years, and biomethane costs from animal

manure are high due to small scales and costly upgrading & injection equipment.

The cheapest biofuel production costs are seen for biomethane from wastes (MSW and industrial),

due to the negative price of the feedstocks (gate fees) helping off-setting some of the high

conversion plant costs. However, the product being displaced (natural gas) is significantly lower cost

than liquid fossil fuels. Despite high feedstock prices, UCO, animal fats and tall oil pitch also produce

low cost biofuels due to high conversion efficiencies and low conversion costs. Many of the

agricultural residues and woody resources fall in the mid-range of biofuel production costs, due to

low feedstock costs, but high conversion costs.


40

Table 5: Summary of feedstock prices

Feedstock Current price (£/t) Current price (£/GJ) Point in supply chain Data quality Reference

Bio-fraction of MSW -41 (-46 to -24) -6.5* Gate fee High WRAP (2013) Gate Fees Report

Bio-fraction of C&I waste -41 (-46 to -10) -5.9* Gate fee High WRAP (2013) Gate Fees Report

Straw 63 (48 to 75) 4.2 Farm gate High Farming Online (2013)

Corn stover 39 2.8 Farm gate Theoretical Purdue University (2011)

Animal manure 0 (0 to 34) 0.0* Farm gate High Biomass Futures (2012) Atlas of EU biomass potentials

Sewage Sludge 0 (-41 to 0) 0.0* Water treatment works High Ofwat (2010), Wrap (2013)

Palm oil mill effluent 0 0.0* Mill Medium IFC (2009)

Empty palm fruit bunches 3 (2 to 4) 0.7 Mill Medium Eco-ideal consulting Malaysia (2013) pers. comm.

Tall oil pitch 420 11.1 Tall oil refinery High Industry confidential (2013) pers. comm.

Crude glycerine 253 17.9 FOB traded High Oleline (2013) Glycerine Market Report

Bagasse 8.5 (2.8 to 34) 1.1 Sugar mill High Industry confidential (2013) pers. comm., Pecege (2011)

Grape marcs 54 9.4 Dried and delivered Medium MixBioPells.eu (2012)

Wine lees 54 9.4 Dried and delivered Poor Assumed same as grape marcs, no other data available

Nut shells 67 (49 to 85) 4.1 Factory gate High de Pinares (2013)

Husks 97 (80 to 110) 7.5 CIF traded High Industry confidential (2013) pers. comm.

Cobs 57 (46 to 68) 4.6 Farm gate Theoretical Purdue University (2011)

Bark, branches, leaves 39 (34 to 44) 3.1 Delivered to buyer Medium Industry confidential (2010)

Saw dust & cutter shavings 67 4.4 Mill High European Pellet Council (2012)

Black & brown liquor 112 (0 to 175) 9.3 Pulp & paper plant Medium Based on energy value, Biomass Futures (2012)

UCO 724 20.1 FOB traded High Platts (2013)

Animal fats Cat I & II 480 12.6 FOB traded High Ecofys (2012)

Miscanthus 53 4.0 Farm gate High Terravesta (2013)

Short rotation coppice 50 4.0 Farm gate High E4tech and NNFCC (2013)

SRF/small round-wood (UK) 42 3.5 Roadside High Tubby (2012)

SRF/small round-wood (US) 32 2.6 Roadside High WRI (2011) North American Wood Fiber Review

Micro-algae 1,710 47.5 Plant gate Medium E4tech (2011) As used in CT TINA analysis

Macro-algae 48 23.8* Landed on shore Medium E4tech (2011) As used in CT TINA analysis

Renewable electricity £95/MWh 26.4 Renewable project High DECC (2013) Onshore wind strike price

Waste carbon gases 42 6.7 Steel mill Medium Holmgren (2013), DECC (2013)

Those prices marked with * are based on the biogas energy potential, not the combustion LHV – i.e. the calorific values given in Table 3


41

Table 6: Summary of biofuel production costs (£/GJ biofuel)

Feedstock Region Resource Drying,

chipping

Transport

to plant

Biofuel

conversion

Conversion

efficiency Technology

Transport

to EU

Import

tariffs

Transport,

filling station

Total delivered

biofuel

Bio-fraction of MSW UK -13.1 - 27.8 49% AD + upgrade - - 3.0 18

Bio-fraction of C&I waste UK -11.8 - 27.8 49% AD + upgrade - - 3.0 19

Straw UK 11.1 2.1 9.8 37% LC ethanol - - 3.5 26

Corn stover US 7.4 1.2 9.8 37% LC ethanol 4.5 4.0 4.8 31

Animal manure UK 0.0 2.2 33.3 49% AD + upgrade - - 3.0 39

Sewage Sludge UK 0.0 - 23.7 49% AD + upgrade - - 3.0 27

Palm oil mill effluent SE Asia 0.0 - AD biogas Not imported, hence not analysed further

Empty palm fruit bunches SE Asia 2.0 4.2 14.6 35% FT diesel 1.5 1.4 3.6 27

Tall oil pitch EU 12.4 0.8 3.6 89% HVO - - 2.9 20

Crude glycerine EU 29.8 - 4.9 60% Methanol - - 3.7 38

Bagasse Brazil 2.9 0.2 - 9.8 37% LC ethanol 3.2 4.0 4.8 24

Grape marcs EU 23.3 1.7 9.8 37% LC ethanol - - 3.5 38

Wine lees EU 15.9 1.5 9.1 54% 1G ethanol - - 3.5 30

Nut shells EU 11.7 0.7 14.6 35% FT diesel - - 2.9 30

Husks EU 10.4 9.6 9.8 37% LC ethanol - - 3.5 33

Cobs US 12.3 1.0 9.8 37% LC ethanol 4.5 4.0 4.8 36

Bark, branches, leaves EU 3.2 1.8 3.9 14.6 35% FT diesel - - 2.9 26

Saw dust & cutter shavings EU 12.7 1.1 14.6 35% FT diesel - - 2.9 31

Black and brown liquor EU 16.1 - 12.9 58% DME - - 3.0 32

UCO UK 21.3 0.1 0.5 94% FAME - - 3.5 25

Animal fats Cat I & II UK 15.6 0.2 0.5 94% FAME - - 3.5 20

Miscanthus UK 10.6 2.8 9.8 37% LC ethanol - - 3.5 27

Short rotation coppice UK 11.5 1.8 1.9 14.6 35% FT diesel - - 2.9 33

SRF/small round-wood UK 9.9 1.9 1.9 14.6 35% FT diesel - - 2.9 31

SRF/small round-wood US 7.0 1.7 1.4 9.8 37% LC ethanol 2.8 4.0 4.8 31

Micro-algae US 50.4 1.0 0.5 94% FAME 1.2 3.3 4.2 60

Macro-algae UK 48.2 1.2 11.5 49% AD + upgrade - - 3.0 64

Renewable electricity UK 36.7 - 7.8 72% Electrolysis - - 10.3 55

Waste carbon gases EU 11.1 - 7.9 60% Eth ferment - - 3.5 23


42

4.6 Sustainability

The sustainability of each feedstock has been assessed by conducting the following “risk screening”

exercise, in order to highlight if there are certain factors that could be problematic for a particular

feedstock:

1. Identifying the competing uses of the feedstock

2. Determine the most likely substitute resources for these competing uses if the feedstock was

to be diverted to biofuels conversion, or the land types used if new feedstock is grown

3. Indicate the risk of significant indirect GHG emissions associated with these substitutes

4. Assess other associated direct and indirect environmental and social impacts. Note that we

have not assessed any potential benefits, only the potential risks.

5. Indicate the risk of the diversion having a significant impact on feedstock prices

6. Estimate the direct GHG emissions associated with using the feedstock for biofuel production

Competing uses

Table 7 sets out the existing uses identified for each feedstock, based on the overall feedstock

availability and tonnages currently entering each market. This data is again presented for the region

in which the feedstock is most likely to be produced, when considering biofuel routes ending in

Europe. These are the same regions that we are using for the GHG and economics calculations. The

cells highlighted in purple indicate those existing uses which are most likely to be in competition with

biofuels production. This high-level analysis considers tonnages for the whole feedstock base, and

does not examine the quality of each stream and which would be most suitable for specific biofuel

conversion technologies. The resulting messages are that:

• Feedstocks currently disposed of to landfill or burnt without energy recovery could be

available for biofuels.

• Feedstocks left on the ground, spread to land or uncollected could also be resources for

biofuels, provided the feedstock is extracted sustainably (or digestate is returned).

• Heat and power sectors will commonly be in competition where sufficient volumes of the

material are flowing into this sector, since transport biofuels are a similarly low value, high

volume energy use of biomass feedstocks.

• Animal bedding and feed are only significant considerations for a few feedstocks, namely,

straw, crude glycerine, and some sawmill residues.

• Industrial uses vary, with many of the chemicals sectors being high-value, niche markets that

are either unlikely to be affected (due to small volumes), or their high willingness to pay.

However, other industries are at a much larger scale and more price sensitive, such as paper

& panel board using small round-wood and some types of sawmill co-products.

• For those feedstocks specifically grown for biofuels (cells highlighted in green), the current

competing uses identified are relatively unimportant, however, the land that will be grown

on is important to consider.


43

Table 7: Identification of current competing uses (highlighted cells show key competing uses)

Region Disposal Left, or spread to

land

Heat and/or

power Compost

Animal feed &

bedding Industrial Uses Other

Bio-fraction of

MSW UK

9.6 Mt/yr

(not all bio)

4.9 Mt/yr

(not all bio), 0.3

Mt/yr food to AD

5.5 Mt/yr green

waste, 0.3 Mt/yr

food compost

2.5 Mt/yr MBT

(not all bio)

Bio-fraction of

C&I waste UK

11.3 Mt/yr (not all

bio)

2.2 Mt/yr land

recovery (not all bio)

2.7 Mt/yr

(not all bio), 0.07

Mt/yr food to AD

0.07 Mt/yr of

green waste

8.5 Mt/yr recycled in

paper industry

2.3 Mt/yr MBT

(not all bio)

Straw UK

Incorporation 11.7

Mt/yr, 0.6 - 4.2 which

can be extracted sust.

0.52 Mt/yr 5.8 Mt/yr fodder and

animal bedding

0.47 Mt/yr for

mushrooms & frost

protection

Animal manure UK

64 Mt/yr spread to

land, could go via AD

0.7 Mt/yr chicken

litter for power,

0.3 Mt/yr to AD

<0.01 Mt/yr

Sewage sludge UK

5.7 Mt/yr spread to

land without

treatment

6.4 MT/yr

incineration, 23.4

Mt/yr to AD biogas

Palm oil mill

effluent SE Asia

Most discharged

via open ponds

Increasingly

treated by AD

Empty palm

fruit bunches SE Asia

40.8 Mt/yr burnt

without energy

recovery in past

Low but increasing

use in onsite heat

and power

5.1 Mt/yr mulch

or composted

5.1 Mt/yr to paper and

board production

Tall oil pitch EU 0.41 Mt/yr on-site

heat and power

Crude glycerine EU

~0.1 Mt/yr heat

and power use (via

biogas)

0.3 Mt/yr low value

sales into animal feed

& waste water treat

0.56 Mt/yr upgraded for

chemical, food, and

pharmaceutical markets

Up to 0.2Mt/yr

used to make

bio-methanol

Bagasse Brazil

165 Mt/yr burnt

without energy

recovery in past

207 Mt/yr on-site

heat and power,

some off-site

Animal feed uses

under investigation

41.3 Mt/yr paper and

board industry

Grape marcs &

wine lees EU

Mulch,

composting

Used for alcohol, food,

food additives & others

Nut shells EU 0.4 Mt/yr heat and

power

0.4 Mt/yr various

industrial uses

Husks

EU

Globally: 60 Mt/yr

of rice husks for

on-site steam

Unknown quantity of

maize husks to whole

crop silage for animal

feed and AD

Globally: 60 Mt/yr of

rice husks to silica-based

industries, materials,

fertilisers


44

Region Disposal Left, or spread to

land

Heat and/or

power Compost

Animal feed &

bedding Industrial Uses Other

Cobs US

120 Mt/yr left on

land or incorporated.

36 Mt/yr could be

extracted sustainably

Minor use in heat

and power

Unknown quantity to

whole crop silage for

animal feed & AD

Various industrial uses

Bark, branches,

leaves EU

Up to 56 Mt/yr may

be available in the EU

Heat and power

sector minor use

Mulch,

landscaping

Animal bedding,

minor market

Panel board

Saw dust &

cutter shavings EU

On-site heat and

power, pellet

production

Cutter shavings for

animal bedding

Paper and panel board

Black & brown

liquor EU

85 Mt/yr on-site

heat and power

UCO UK

2.0 Mt/yr disposal

in the EU that

may be collected

0.07 Mt/yr EU chemicals

demand

0.98 Mt/yr to

biodiesel in EU

Animal fats

Cat I and II UK

Cat I & II: 0.85

Mt/yr to heat &

power in EU

Cat III: used for animal

feed, oleochemicals,

soaps, pet food

0.40 Mt/yr to

biodiesel in EU

Miscanthus UK 0.12 Mt/yr to

power and heat

Estimated ~0.04

Mt/yr to bedding

New growth

for biofuels

Short Rotation

Coppice UK

0.036 Mt/yr to

power and heat

New growth

for biofuels

Short Rotation

Forestry UK

New growth

for biofuels

Small round-

wood

UK

US

Up to 2.3 Mt/yr

growing and

harvestable

~1 Mt/yr to paper &

panel board markets,

fencing & furniture

Micro-algae

Macro-algae

US

UK

High value markets inc.

food, feed, cosmetics

pharmaceuticals

New growth

for biofuels

Renewable

electricity UK

100% use in power New capacity

for renewable

transport fuels

Waste carbon

gases EU

~50% steel mills

flare without

energy recovery

~50% steel mills

combust CO for

heat and/or power

Pure CO2 streams may

be used in food & drink

manufacture


45

Substitute resources and risk of indirect GHG emissions

For each of the key competing uses, we next explored the alternative resource options identified if

the Annex IX feedstock was to be diverted to biofuels conversion. These substitutes are displayed in

Table 8. We have also highlighted in red (and in the text below) those substitute resources that are

likely to present the highest risk in terms of indirect GHG emissions (either due to being a fossil fuel,

or being land-using crops that could cause indirect land use change, ILUC). Feedstock specific details

are provided in the factsheets in Appendix C.

• Disposal to landfill or burning without energy recovery does not require replacement

resources if the material is diverted to biofuels production.

• Feedstocks left on the ground or uncollected also do not require replacement resources if

the material is extracted sustainably for biofuels production – this applies to straw, cobs,

sugarcane trash, forestry residues and small round-wood (all those highlighted in light blue

in Table 8). These resources also play a key role in potentially replacing other feedstocks that

would be diverted to biofuels production from other sectors (notice the mention of chips

and straw as the replacement options given in several rows in Table 8) – hence there is a

need to ensure that these feedstocks are extracted in a truly sustainable manner.

• For manure and sewage sludge, no replacement resources are required, provided that the

AD digestate is returned to the land to replace the manure or sludge fertiliser value.

• Decreased feedstock availability for heat and power sectors could have different impacts,

depending on the boiler flexibility and feedstock form. In the near-term, the indirect GHG

impact could be high, since users burning liquid feedstocks could replace the biofuel

feedstocks with heating fuel oil, those using solid feedstocks could use coal, and those using

biogas could use natural gas instead. All these options would have significant GHG

emissions, and hence significantly reduce the overall system GHG savings of producing

biofuel from that feedstock. However, as the move towards decarbonisation gathers pace in

the UK and EU, these users may no longer be willing (or can afford) to use fossil fuels, and

may instead choose to switch to using solid biomass feedstocks such as straw, wood chip

and pellets (with boiler modifications if required). Provided these additional resources are

sustainably extracted (e.g. from collectable straw, forestry residues or small round-wood),

this indirect GHG substitution impact in the heat & power sector would typically be

significantly lower than if using fossil fuels as the substitute resource. One stakeholder has

noted that this indirect substitution in the heat & power sectors is more of a risk in countries

with cheap (or subsidised) fossil fuels – with the price levels seen in the EU, there is less

incentive to substitute with fossil fuels, and a greater likelihood of substitution with

sustainable alternatives.

• Animal bedding is only a significant consideration for straw and some saw-mill residues –

both can substitute the other, but each will also rely on additional resource coming from

more collected straw or forestry wood chips. We note that straw used for animal bedding

(one of the major competing uses) is commonly return to land in the form of manure, thus

ensuring that nutrient or organic matter depletion does not occur. However, the use of

straw in animal bedding is still a competing use for the “clean” resource – once utilised as


46

animal bedding, the “dirty” resource is generally classified as dry manure, and hence the

considerations for ensuring sustainability of animal manures now apply.

• Animal feed is only a significant consideration for some straws and crude glycerine. These

feedstocks serve different and particular purposes – barley straw is mainly eaten for its

roughage, and could be replaced by hay or other silage grasses, but this would either require

new areas of arable or pasture land to be dedicated to this production (risking ILUC), or

greater efficiency and productivity from existing grasslands (and higher efficiency in storage

and use/feeding). Crude glycerine is mainly used as a feed binder, although promotes

carbohydrate uptake, hence would be replaced by corn, starch and sugar crops – again,

possibly requiring new arable land areas, or productivity and efficiency increases. Using

straw and crude glycerine for animal feed could therefore lead to indirect GHG emissions,

unless farming output is improved to provide the additional substitute resources without

additional land use (or fertiliser use and soil carbon changes). Industry stakeholders have

highlighted that the animal feed market is one of the most complex demand areas, and that

the exact substitutions that would occur in these markets are hard to quantify in isolation.

We therefore note that further validation and analysis of the animal feed market would be a

valuable addition to the scope of this study.

• Crude glycerine processing to refined glycerine has multiple uses in the chemicals, feed and

food markets. It is likely that any diversion would be replaced with fossil-derived glycerine or

propylene glycol – again, significant indirect GHG emissions impacts. IEEP (2013) also points

out that extra incentives to increase the use of crude glycerine as a biofuel feedstock may

improve the profitability of FAME biodiesel production, and hence have a knock-on impact

via greater virgin vegetable oil consumption (and hence ILUC risks).

• For composting uses, such as some of the green household waste streams within MSW, any

diversion to biofuels needs to avoid substitution with fossil-derived fertiliser or peat –

ideally, digestate from AD could fulfill the same nutrient requirements (although potentially

lacking some of the soil structure benefits). Grape marcs and wine lees are occasionally used

for compost or mulch (hence could face the same substitution risks), but are increasingly

seen as high-value feedstocks for processing into spirits – we note that EU legislation (EC,

2008) states that all grape marcs and wine lees should be treated via ethanol fermentation.

• Paper & panel board industries have few options but to find new supplies of wood if their

feedstocks (small round-wood and sawmill co-products) are diverted to biofuels. These

industries are already recycling a high percentage of the waste wood streams (around 70%

recycling of wood fibres occurs in Europe), and require a certain percentage of virgin

material to maintain product quality. This would therefore require additional forestry

residue or small round-wood resource to be extracted sustainably – although we note that

the available surplus resource of small round-wood and forestry residues is large, and the

forestry industry is able to intensify production (up to certain sustainable yield limits). Some

limited substitution of wood with other agricultural residues (e.g. straws) might be possible

for some materials applications.


47

Table 8: Likely replacement resources if feedstock diverted away from existing uses (significant indirect GHG risks highlighted in red)

Region Disposal Left, or spread to land Heat and/or power Compost Animal feed

& bedding Industrial Uses Other

Bio-fraction of MSW UK None needed Natural gas, wood chip Peat, fertiliser,

AD digestate

Bio-fraction of C&I waste UK None needed Natural gas, wood chip More wood chip

Straw UK None if extract sust.

Hay/silage for

feed, sawdust

/chip for bed

Animal manure UK Digestate post-AD

Sewage sludge UK Digestate post-AD Natural gas

Palm oil mill effluent SE Asia None needed

EPFBs SE Asia None needed Natural gas, wood chip

Tall oil pitch EU Fuel oil, wood chip

Crude glycerine EU Fuel oil, wood chip Corn, sugars Fossil crude oil

Bagasse Brazil None needed Cane trash if extract

sust.

Grape marcs & wine lees EU Peat, fertiliser,

AD digestate More grapes?

Nut shells EU Coal, wood, straw

Husks EU Coal, wood, straw

Cobs US None if extract sust. Hay/silage for

feed

Bark, branches, leaves EU None if extract sust.

Saw dust & cutter shavings EU More wood chip/pellet More wood

chip, straw

More wood chip/

waste, straw

Black & brown liquor EU Fuel oil, wood chip

UCO UK None needed

Animal fats Cat I and II UK Fuel oil, wood chip

Miscanthus UK Likely agric. land

Short Rotation Coppice UK Likely agric. land

Short Rotation Forestry UK Land used

Small round-wood UK None if extract sust. More wood chip

Micro-algae US Likely barren, small

Macro-algae UK Coastline, out at sea

Renewable electricity UK Marginal electricity Minimal area or barren

Waste carbon gases EU None needed Natural gas


48

For the “new growth” feedstocks highlighted in green within Table 8, we have also considered the

likely amount and type of land used:

• Energy crops such as Miscanthus and Short Rotation Coppice will typically be grown on

agricultural land (either arable land as presently is the case, or potentially some pasture or

grass lands in the future). These both present an ILUC risk, through the displacement of

arable crops or livestock elsewhere globally, unless the land they are grown on has no other

uses, would otherwise be taken out of production, or can be sustainably intensified. As

energy crops do not generate co-products, avoiding these indirect impacts is only likely if

strict implementing mitigation measures are implemented – such as protecting high carbon

stock land, above baseline yield increases, supply chain efficiencies and farming system

integration (E4tech, 2011). Assuming an average yield of 14 t/ha/yr across a typical

plantation lifetime, then Miscanthus and Short Rotation Coppice would produce ~170 PJ/yr

for every 1 million hectares of land grown.

• Lower risk feedstocks include algae and new supplies of renewable electricity. Micro-algae

production facilities are likely to have a small footprint, and given the need for warmth,

sunshine and water, these plants could be situated on non-productive, barren land near the

coast in regions such as the Middle East, US Gulf or Australia. Macro-algae will be grown in

large areas offshore, but typically near the coast to minimise costs – the most productive

waters globally are expected to be Eastern Asia, NW Europe and Chile. For renewable

electricity, we are assuming that a new production site is constructed for the purposes of

generating renewable hydrogen. Very little land is taken up by establishing wind-farms

(farming can continue around the towers), and solar PV farms could be established on non-

productive land, or be building-integrated if at a smaller scale.

Environmental and social impacts of diversion

The use of biomass feedstocks for biofuel has impacts beyond the volumes supplied to other energy

and non-energy markets, in particular, the range of negative impacts that it can have on the

ecosystem services provided by the natural environment (e.g. forests, rivers, soil and air). We have

therefore assessed the extent to which the different feedstocks listed are likely to have these

impacts, and whether they might also have indirect impacts (through the substitutes for the

competing uses identified above). We note that some feedstocks may have environmental or social

benefits, but the project scope is to look at potential risks, and hence we have only focused on the

potential negative impacts.

The impact categories we are assessing cover environmental aspects such as species biodiversity,

landscape/visual, forest regeneration, soil and water, as well as social impacts covering food prices

and security, land and labour rights. For each feedstock, we have provided a summary classifying the

level of risk in each impact category as High, Medium or Low. This is summarised in Table 9 – factors

categorised as High risk are shown in Red, with Medium risk in Orange, and Low risk in Green. The

text provided refers only to the indirect impacts, i.e. whether substitute resources in competing use

sectors will cause environmental or social impacts.


49

Table 9: Summary of environmental and social factors (Red = High risk, Orange = Medium risk, Green = Low risk. Text represents indirect impacts)

Feedstock Region Environmental Impacts Social impacts

Assumptions Species bio-

diversity

Landscape/

visual

Forest

regen. Soil Water

Food

security

Land

rights

Labour

rights Other

Bio-fraction of

MSW UK Compost Diverted from landfill, compost or incineration

Bio-fraction of C&I

waste UK Diverted from landfill

Straw UK &

US Wood, hay Hay Wood

Wood,

hay

Wood,

hay Hay

Low risk across all factors if only taking additional

sustainable extraction. If displace animal feed/bedding,

assume forest residues and hay/silage available locally

Animal manure UK Transport AD may have env. benefits, but extra transport needed

Sewage sludge UK AD may have env. benefits

POME SE Asia AD may have env. benefits

Empty palm fruit

bunches SE Asia Diverted from incineration without energy recovery

Tall oil pitch EU Wood Wood Wood Wood Transport Diverted from heat & power, assume new forest

residues are available locally

Crude glycerine EU Feed, wood Feed Wood Feed,

wood

Feed,

wood Feed Transport

Medium risks where diverted from animal feed (needing

more sugars/corn to be grown). Heat & power diversion

requires more supply of sustainable fuels

Bagasse Brazil Cane trash Cane

trash

Cane

trash

Low risk across all factors if only diverted from burning.

If displace heat & power, assume other sustainable agric

residues available (e.g. cane trash)

Grape marcs EU Fertiliser Fertiliser Spirits

prod.

Impacts to existing wine industry. May have to go to

ethanol under EU legislation. Some diverted from mulch

and composting, impact reduced if good management

Wine lees EU Spirits

prod.

Impacts to existing wine industry. May have to go to

ethanol under EU legislation

Nut shells EU Transport Diverted from heat & power

Husks EU Transport Diverted from heat & power

Cobs US Hay Hay Hay Hay Hay

Low risk across all factors if only taking sustainable

extraction. If displace animal feed, assume hay/silage

available locally

Bark, branches

and leaves EU

Low risk provided sustainable extraction limits are not

exceeded. Also benefit of less nitrate formation and

more attractive landscape if removing logging residues


50

Feedstock Region Environmental Impacts Social impacts

Assumptions Species bio-

diversity

Landscape/

visual

Forest

regen. Soil Water

Food

security

Land

rights

Labour

rights Other

Saw-dust and

cutter shavings EU Wood Wood

Wood,

straw

Wood,

straw

Diverted from heat & power, panel & board, plus animal

bedding. Assume additional forest residues and straw

available locally

Black & brown

liquor EU Wood Wood Wood Wood

Mining

Transport

Diverted from heat & power, assume additional forest

residues available locally. Chemicals recycle back to the

mill has to be considered only if black liquor is

transported off-site for biofuels production

UCO UK Diverted from disposal of residual waste to landfill,

assumed collection of additional household resources

Animal fats (Cat I

and II) UK Wood Wood Wood Wood Diverted from heat & power

Miscanthus UK Variable Variable Variable Variable Transport New growth. Medium to high risks with ILUC impacts,

with scope for mitigation. Possible biodiversity benefits

Short rotation

coppice UK Variable Variable Variable Variable Transport

New growth. Medium to high risks with ILUC impacts,

with scope for mitigation. Possible biodiversity benefits

Short rotation

forestry UK Variable Variable Variable Variable Variable Transport

New growth. Medium to high risks with land impacts.

No resource before 2030

Small round-wood UK &

US Wood Wood Wood Wood

Low risk provided sustainable extraction limits are not

exceeded

Micro-algae US Variable Variable Transport New growth. Sensitive to climate, growing conditions

and water availability

Macro-algae UK Variable Transport New growth. Sensitive to climate, growing conditions

and water nutrients

Renewable

electricity UK Variable Transport New growth. Sensitive to location and technology

Waste carbon

gases EU Nat gas

Low risk from diversion from steel mill flaring. Diverted

from heat & power would increase natural gas use


51

Price impacts of diversion

Based on the feedstock availability (both collected and uncollected), and the size and location of

competing uses, we present in Table 10 the potential price impacts of diverting feedstocks to biofuel

use. This has been carried out in a qualitative manner, using the following approach:

• Where the feedstock availability is capped, minimal additional resource can be collected, and

multiple competing uses already exist for a highly fungible/traded feedstock, the price and

knock-on impact of diverting feedstock to biofuels is likely to be high (inelastic supply). These

feedstocks include tall oil pitch, crude glycerine, grape marcs & wine lees, nut shells, husks,

along with sawdust & cutter shavings, and animal fats. Straw can also fall into this category,

depending on location and available additional resource.

• Other feedstocks have more modest levels of competition or additional sustainable supplies

that can be accessed for biofuels, hence the price impacts are not likely to be as high. These

feedstocks include MSW, C&I waste, bagasse, cobs, small round-wood and UCO.

• Where there still is a large uncollected resource potential that can be sustainably extracted,

and few competing uses for the existing feedstock volumes (or significant productivity gains

that can be made), then we have estimated that the price and knock-on impact of diversion

to biofuels is likely to be low (elastic supply). These feedstocks include empty palm fruit

bunches and forestry residues, along with the “new growth” feedstocks highlighted in green

in Table 10 (energy crops, short rotation forestry, algae and renewable electricity).

• Some feedstocks are rarely transported or traded, and although the feedstocks have a value

to their captive users, they do not have a visible market price – these “Not Applicable” price

impacts are shaded in grey in Table 10. This applies to feedstocks such as black & brown

liquor, waste carbon gases, palm oil mill effluent, along with the majority of animal manures

and sewage sludges. In these cases, diverting material to biofuels production is not

necessarily detrimental, since a higher value on the feedstock means that the industries that

generate these resources are then more economically competitive, and are also incentivised

to more efficiently treat and utilise the residues. Stakeholders have communicated that

instead of talking about price impact “risks”, it is more relevant to fully endorse further

recovery efficiencies and upgrading of resources – provided that these productivity

improvements are achievable. For example, if biomethane can be produced economically,

recycling valuable commodities via digestate from sewage sludge, thereby lowering the costs

of sustainable water management, this is a benefit to society and should not be named as a

risk. Similarly, the high efficiency production of biofuel from black liquor instead of achieving

modest efficiencies via electricity generation in a Tomlinson recovery system should be

welcomed instead of being presented as a risk to the wood pulping industry – however, this

does then come down to a discussion of the “best use of bioenergy” (which is outside the

scope of this study).


52

Table 10: Summary of estimated price impacts. Note that price increases are not necessarily a risk or disadvantage, depending on what competing uses exist, and the

effect of promoting more efficient use of a resource. The competition levels are current estimates for the particular region considered.

Feedstock Region Growth in theoretical

potential? Additional sustainable collection?

Indicative current

competition in the

example region?

Of the competing

uses, what % are

energy uses?

Traded resource? Potential price

impact?

Bio-fraction of MSW UK Flat Large (landfill) 60% 40% Contract tie up Medium

Bio-fraction of C&I waste UK Flat Large (landfill) 40% 40% Contract tie up Medium

Straw UK Flat Perhaps limited (left on ground) 70-90% 5-10% Partially Medium-High

Animal manure UK Flat Large (spread) 15% 90% Minimal NA

Sewage sludge UK Small rise Limited (spread) 90% 100% Minimal NA

POME SE Asia Large rise Large (discharge) Low High No NA

Empty palm fruit bunches SE Asia Large rise Large (burning) Low Low Partially Low

Tall oil pitch EU Small rise Minimal 100% 100% Yes High

Crude glycerine EU Small rise Limited 90% 10% Yes High

Bagasse Brazil Large rise Large (burning) 60% 80% Partially Medium

Grape marcs EU Flat Minimal 100% 0% Partially High

Wine lees EU Flat Minimal 100% 0% Partially High

Nut shells EU Flat Minimal 100% 50% Yes High

Husks EU Flat Minimal 100% 50% Partially High

Cobs US Small rise Large (left on ground) 50% Low Partially Medium

Bark, branches, leaves EU Small fall Large (left on ground) 10% Low Partially Low

Sawdust & cutter shavings EU Small rise Minimal 100% Medium Yes High

Black & brown liquor EU Rise Limited 100% 100% No NA

UCO EU Large rise Medium (disposal) 10% 0% Yes Medium

Animal fats (Cat I and II) UK Small rise Minimal 70% 100% Yes High

Miscanthus UK New growth Large 0% NA Partially Low

Short rotation coppice UK New growth Large 0% NA Partially Low

Short rotation forestry UK New growth (>2030) Large 0% NA Yes Low

Small round-wood UK Flat Medium (left un-harvested) 30% 0% Yes Medium

Micro-algae US New growth Large 0% NA Yes in future Low

Macro-algae UK New growth Large 0% NA Minimal Low

Renewable electricity UK New growth Large 100% 100% Yes Low

Waste carbon gases EU Flat Medium (flare/venting mills) 50% 100% No NA


53

The impact ratings in Table 10 are only estimates, since the true impact on pricing will be location

and policy specific, depending on supply cost curves as to how the new biofuel demand is met within

that feedstock’s market. In particular we note that the competing use percentages are indicative

only, based on the current feedstock flows given in Table 7, and therefore only apply to the example

regions considered (e.g. UK, EU or other world region of production). We have also included an

additional column to highlight where the competing uses as given in Table 7 are predominately in the

energy sector (i.e. heat and power), or where the competing uses are mainly animal feed, bedding,

industrial and material uses.

Taking the example of straw to illustrate this locational variation; the UK straw market is reasonably

tight, given only 7.4-11 Mt/yr judged by industry experts to be sustainably extractable (Ecofys, 2013;

HGCA, 2013), and 6.8Mt/yr of current competing uses. The competition factor for UK straw was

therefore judged at around 70-90%. However, based on Ecofys (2013) data, some EU countries have

very large sustainable straw resources that are up to 50% underexploited (e.g. France, Germany),

whilst other countries have a straw deficit (e.g. Poland and Netherlands have demands than cannot

be sustainably generated each year). Across the whole of Europe, the competition factor for straw in

Table 10 could be estimated at nearer 75%, not 70-90% as in the UK. We therefore emphasise that

the sustainable collected potentials, less competing demands, will be different in each region

considered – but that these volumes once known are the potential feedstock resource that is

available for biofuel production without a risk of indirect effects.

As noted previously, this analysis for clean straw is separate for the analysis of animal manures (with

the recycling of a large proportion of used straw back to fields). Any diversion into biofuels of straw

currently used for animal bedding would require an additional material (sustainable extraction of

more straw or wood) to be found to house the livestock, or a change in agricultural practices.

Depending on the soil quality and nitrate vulnerable zones, replacement sources of nutrients and

organic matter may also be required to maintain the soil quality in local fields (hence use of fertiliser,

peat or digestate). It is therefore valid to identify the proportion of straw used for animal bedding as

being a competing use versus biofuels (or other energy) production, and not counting this animal

bedding proportion as being part of the sustainably extractable resource.

4.7 Direct GHG emissions

In this section, we have provided estimates of the direct GHG emissions associated with each biofuel

supply chain, using either current actual UK data (where this exists) or the RED calculation

methodology for future chains without current data. The purpose of providing these indicative values

is not to calculate the exact % saving (or to say what the RED should adopt as new typical values) –

especially since there may be wide ranges in values due to different regions, supply chains, feedstock

and conversion technology variations.

It is rather to understand, together with the feedstock potential, the relative importance of different

feedstocks in terms of emissions savings – and whether it is likely that the biofuels produced from

the available feedstock will have very low direct GHG emissions, or be closer to the RED thresholds.

These indicative GHG savings will also be combined with the production costs to calculate estimates

of the cost per tonne of CO2 saved (£/tCO2) for each of the biofuel routes.


54

4.7.1 Methodology

UCO biodiesel, animal fat biodiesel and bio-methanol from crude glycerine are currently consumed in

significant volumes within the UK. The RTFO unit collects annual carbon and sustainability data;

hence for these three Annex IX biofuel chains we have used the latest DfT (2013) average actual data.

The RED then provides a selection of typical and default values for wheat straw (to ethanol), waste

wood and farmed wood (to ethanol, FT diesel, DME and methanol), along with MSW and manure (to

compressed natural gas via biogas). These advanced biofuel routes match several of those selected in

this study – in these cases we have therefore used the RED typical values as the direct GHG emissions

associated with these routes. See Section 4.4.1 for the choice of biofuel route analysed for each

feedstock – and note that these are not the only biofuels allowed (as shown in Figure 4, many

feedstocks have multiple available routes). The typical values are used rather than the default

emission values, as the typical emissions do not include the conservative factor (i.e. the 40% uplift on

conversion steps), and therefore better represent what could be the most likely emissions from each

of the biofuel supply chains.

Where a biofuel route considered in this Annex IX study does not exactly match any of those listed in

the RTFO data or the RED, we have adopted the following approach:

• If the biofuel route is sufficiently similar to a route in the RED, then this RED chain is used as

a proxy to give indicative typical emissions. E.g. the bio-fraction of C&I waste to biomethane

chain is assumed to be the same as the bio-fraction of MSW to biomethane chain.

• If the biofuel route shares some similarities to a route listed in the RED, but with a different

geographical location for the biofuel production, we have adapted the typical emission value

given for the RED route by adding in the estimated impact of the missing transport distance.

For example, there is no corn stover ethanol value in the RED, but the existing wheat straw

ethanol value can be adapted by adding an extra biofuel shipping step from the US to the EU.

• Many of the feedstocks on the list are wastes or residues, and are therefore considered to

have zero GHG emissions associated with the production of the feedstock. In these cases, the

GHG calculations for these routes can be based on the existing RED typical values for other

chains that produce the same biofuel, but excluding the upstream feedstock production

steps. Each of the typical values has a breakdown of emissions associated with cultivation

and harvesting, transport, conversion and downstream distribution. We therefore exclude

the emissions from cultivation and harvesting steps, in order to derive the GHG emissions

associated only with conversion and distribution. Transport steps can also be excluded if the

feedstock is assumed to be available at the conversion plant (no transport needed). For

example, tall oil pitch to HVO is based on the rapeseed HVO typical value, but only

considering the emissions from conversion to HVO and downstream distribution – excluding

all the rapeseed cultivation, oil extraction and transport emissions.

• Some of the biofuel routes are significantly different to those listed in the RED, especially

those using feedstocks defined as products (i.e. upstream emissions have to be calculated).

In these cases, it was not possible to follow the same approach as above by adapting the

emissions associated with any of the RED fuel chains – hence external references and

internal E4tech data developed during other assignments have been used instead. Most of

the Part C feedstocks fall into this category.


55

The approach above has been followed to ensure methodological consistency has been applied as far

as possible across the different chains. Specific assumptions relating to the calculation of the

emissions for each biofuel chain are provided in Table 11, along with the key sensitivities.

Typical European values

Note that for the calculations of indicative GHG emissions and production economics, the Annex IX

biofuels in this study are not considered to all be transported to one particular place, e.g. the UK.

Instead, the same approach is taken as in the RED typical value calculations, which is to assume that

the finished biofuel will always be consumed within the EU (exact location unspecified). If the biofuel

is produced within the EU, then the typical values usually assume 150km of road transport from the

point of its production to the point of use. Given that the UK is part of the EU, we assume that if the

biofuel is produced within the UK, it will also be consumed within the UK (after 150km of road

transport). However, if the biofuel is produced outside the EU, it requires shipping into the EU, with

150km of road transport then assumed from where the biofuel is landed at an EU port.

The GHG emissions provided in Table 11 in are therefore consistent with the most likely locations of

advanced biofuel production and consumption across the EU – i.e. typical European values. Also

note that the feedstocks are usually converted to biofuel in the same country as their point of

production – there is no requirement that all the feedstocks be transported to one particular place

before conversion (e.g. the UK). In other words, the calculations for each chain do not assume that

the advanced biofuel plant has to be located in the UK – the advanced biofuel plant is only located in

the UK if the feedstocks are also assumed to be produced in the UK.

If locating an advanced biofuel plant in the UK is a requirement, in order to calculate the emissions

associated with this biofuel production, it would be necessary to consider whether additional

transport steps would be required to import any feedstocks, and calculate the GHG emissions of the

specific chains being considered. These added steps could add considerably to the emissions and

costs of routes where the feedstock has low volumetric or energy density, i.e. high transport costs.

Many of the Annex IX feedstocks are highly unlikely to be imported into the UK for this reason – e.g.

MSW, industrial waste, manure, sewage sludge, POME, wine lees, black & brown liquor, macro-algae

and waste carbon gases. Some feedstocks are only likely to be imported if in a dry pelleted form,

such as straw, corn stover, cobs, EPFBs, bagasse, grape marcs, husks, bark, branches & leaves.

Woody feedstocks could be imported in pellet or chip form, such as saw dust & cutter shavings,

Miscanthus, SRC, SRF and small round-wood. The remaining feedstocks are more likely to be readily

traded, due to their high energy and volumetric density, such as tall oil pitch, crude glycerine, nut

shells, UCO, animal fats and micro-algae oils.

Fossil fuel comparator

As laid down in the RED, ‘biofuels’ means liquid or gaseous fuel for transport produced from biomass.

Communication 2010/C 160/02 states that “The fossil fuel comparator to be used at present for

biofuels is 83.8 g CO2-eq/MJ. This value will be superseded by ‘the latest actual average emissions

from the fossil part of petrol and diesel in the Community’ when that information becomes available

from the reports submitted under the Fuel Quality Directive”

These definitions and guidance therefore mean that gaseous fuels such as biomethane and

renewable hydrogen from Annex IX feedstocks are to be compared against the same fossil petrol and


56

diesel baseline as all other liquid biofuel routes. We note that this is also the approach taken by the

RTFO, in correctly implementing the RED in the UK.

In reality, biomethane would most likely be displacing natural gas (at ~68.0 gCO2e/MJ), and

renewable hydrogen would most likely be displacing hydrogen from steam methane reforming (at

~87.9 gCO2e/MJ). However, the above RED rules mean that the AD routes and renewable electrolysis

routes in Annex IX should still be compared against a fossil petrol and diesel baseline of 83.8

gCO2e/MJ. This baseline value may be increased to 90.3 gCO2e/MJ by 2020, as proposed in the

Impact Assessment accompanying the Oct 2012 RED and FQD proposals (European Commission,

2012). As well as not reflecting the differences in carbon intensity of the displaced fossil fuels, this

approach of calculating GHG savings at a common fuel level also has a further shortcoming in that it

does not consider the tank-to-wheel efficiency of the vehicle, which can be considerably different for

liquid internal combustion engines, hydrogen fuel cells and compressed natural gas drive trains.

Calculating GHG savings per kilometre driven (the actual service demanded) would potentially be a

more robust methodology, however, this is beyond of the current study. Similarly, a discussion of

infrastructure and engine compatibility with regards to fuel blends, and the impact this may have on

the volumes of each fuel demanded, is also out of scope – see E4tech (2013b).

Finally, the cost of GHG emissions savings (given in £/tCO2e saved) are based on the biofuel

production costs presented in Table 6, taking the difference between fossil prices and biofuel costs

(£/GJ), and dividing by the difference in GHG emissions (gCO2e/MJ). The results shown in the final

column of Table 11 are an indication of which biofuel routes are the most cost efficient method of

reducing GHG emissions.

We note that the fossil prices are based on Natural gas = £9.8/GJ, fossil hydrogen (from steam

methane reforming) = £26.8/GJ, with fossil petrol and diesel = £18.9/GJ, so whilst the GHG

comparator might be the same, the price comparator is allowed to differ. For information, the fossil

fuel energy densities used are Natural gas = 46GJ/t, Fossil hydrogen = 120GJ/t, Liquid fossil petrol

and diesel = 44GJ/t.


57

Table 11: Summary of direct GHG emissions, assumptions and sensitivities

Feedstock Fuel Region GHG emissions

(gCO2e/MJ) Assumptions Key sensitivities

% GHG

saving

Cost of GHG

saving (£/tCO2e)

Bio-fraction of

MSW Bio-methane UK 17

RED typical value for MSW biomethane. We note that

UK actual data is thin, but reports at 31gCO2e/MJ C intensity of electricity (major input) 80% 120

Bio-fraction of

C&I waste Bio-methane UK 17 Proxy of RED typical value for MSW biomethane C intensity of electricity (major input) 80% 138

Straw LC ethanol UK 11 RED typical value for wheat straw ethanol Ammonia & lime inputs to conversion

step. Assumed enzymes made onsite 87% 104

Corn Stover LC ethanol US 16 Assume same as RED typical value for wheat straw

ethanol, but with extra shipping step from US to EU

Ammonia & lime inputs to conversion

step and transport distances 81% 178

Animal manure Bio-methane UK 13 RED typical value for manure biomethane C intensity of electricity (major input) 84% 406

Sewage Sludge Bio-methane UK 13 Proxy of RED typical value for manure biomethane C intensity of electricity (major input) 84% 240

Palm oil mill

effluent Bio-methane SE Asia Not considered as biogas from POME used in local markets and not exported to EU

Empty palm

fruit bunches FT diesel SE Asia 10

Assume same as RED typical value for waste wood FT

diesel with extra shipping step from Indonesia to EU

Transport distances and modes.

Conversion step emissions (0 in RED) 88% 109

Tall oil pitch HVO EU 9

Assume same as RED typical value for rapeseed HVO,

but without feedstock production emissions, plus

extra shipping from Scandinavia to Rotterdam

Hydrogen requirements and means of

hydrogen production 90% 12

Crude glycerine Methanol EU 25 UK RTFO average data Conversion step natural gas use 70% 331

Bagasse LC ethanol Brazil 23

Assume same as RED typical value for farmed wood

ethanol, plus extra trucking in Brazil and shipping to

EU, but without emissions from cultivation &

transport


step. Transport distances and modes 73% 86

Grape marcs LC ethanol EU 11

Assume same as RED typical value for wheat straw

ethanol (no emissions associated with production of

feedstock)


step 87% 266

Wine lees 1G ethanol EU 20

Assume same as RED typical value for sugarbeet

ethanol, but without emissions from cultivation and

transport

Natural gas use for drying in conversion

step 76% 173

Nut shells FT diesel EU 4 Proxy of RED typical value for waste wood FT diesel Conversion step emissions (0 in RED) 95% 138

Husks LC ethanol EU 11 Emissions as per wheat straw ethanol (no emissions

associated with production of feedstock)


step 87% 196

Cobs LC ethanol US 16 Assume same as RED typical value for wheat straw

ethanol, but with extra shipping step from US to EU


step and transport distances 81% 246

Bark, branches,

leaves FT diesel EU 4 RED typical value for waste wood FT diesel Conversion step emissions (0 in RED) 95% 94


58

Feedstock Fuel Region GHG emissions

(gCO2e/MJ) Assumptions Key sensitivities

% GHG

saving

Cost of GHG

saving (£/tCO2e)

Saw dust &

cutter shavings FT diesel EU 4 RED typical value for waste wood FT diesel Conversion step emissions (0 in RED) 95% 155

Black & brown

liquor Bio-DME EU 1

Assume same as RED typical value for farmed wood

DME, but without cultivation, chipping and transport

steps

Conversion step emissions (0 in RED) 99% 159

UCO FAME UK 15 UK RTFO average data for UCO biodiesel Methanol input to conversion step 82% 96

Animal fats Cat

I & II FAME UK 15 UK RTFO average data for waste tallow biodiesel Methanol input to conversion step 82% 12

Miscanthus LC ethanol UK 11

Assume same as RED typical value for wheat straw

ethanol, replacing cultivation & transport emissions by

those of Miscanthus bales from UK solid biomass

carbon calculator

Cultivation inputs (diesel for plant &

harvest, fertilisers). Achievable yields

uncertain. Ammonia & lime inputs to

conversion.

87% 107

Short rotation

coppice FT diesel UK 6 RED typical value for farmed wood FT diesel

Achievable yields uncertain. Conversion

step emissions (0 in RED) 93% 178

SRF/small

round-wood FT diesel UK 6 RED typical value for farmed wood FT diesel Conversion step emissions (0 in RED) 93% 157

SRF/small

round-wood LC ethanol US 20 RED typical value for farmed wood ethanol

Ethanol yields, ammonia & lime inputs

to conversion step, transport distances 76% 187

Micro-algae FAME US 31-36

Based on analysis done for the Carbon Trust in 2011.

These emissions represent a best available current

technology scenario in US Gulf coast

Energy input intensity, algal oil yield

and biomass productivity. Unclear if low

GHG algae can be commercially mass

produced

58-63% 786 – 859

Macro-algae Bio-methane UK 17-34 DfT Modes 2 (2050 figure). Based on cultivation

emissions and biogas yield from Ecofys (2008)

Biomass yield of macro-algae and

harvesting energy. As not commercially

produced yet, GHG savings uncertain

60-80% 809 – 1,085

Renewable

electricity Hydrogen UK 9

Based on JEC WTT analysis, appendix 2. Wind power

with central electrolyser supply chain

Hydrogen compression and transport

mode 89% 376

Waste carbon

gases Ethanol EU 25

Based on lower bound of emissions estimated for

Lanzatech’s steel mill gas to ethanol (Jain, 2013)

Power and steam inputs to conversion

process 70% 62


59

Table 11 shows that biofuel emissions for Annex IX feedstocks can vary from as little as 1 gCO2e/MJ

up to ~36 gCO2e/MJ. However, the actual emissions value achieved for a particular route is

dependent on a couple of key factors:

• The emissions associated with cultivation. Micro- and macro-algae in particular have fairly

significant cultivation emissions, due to the energy expended in growing, harvesting and

extraction. All waste and residue feedstocks are assigned zero emissions by the RED, but IEEP

(2013) and ICCT (2013) both note that this ignores the possible impacts on soil carbon stocks

as the extraction of agricultural or forestry residues increases, plus emissions from additional

fertiliser use to replace lost nutrients, and hence advocate an extension of methodology

system boundaries to calculate these impacts. However, there is unlikely to be sufficient

long-term data on the initial and annual soil carbon changes to allow this impact to be

accurately quantified – leading research in the UK is still ongoing in this area with the ETI’s

Ecosystem Land Use Modelling & Soil C GHG Flux Trial (ELUM) project.

• The level of chemical inputs into the conversion plant. FT plants are assumed to have no

chemical inputs (hence no emissions), whilst the LC ethanol plants have large inputs of

ammonia, lime, sulphuric acid, and ammonia sulphate for pre-treatment and fermentation.

This is the main difference between the value of 4 gCO2e/MJ for waste wood FT diesel (e.g.

bark, branches, leaves), and the value of 11 gCO2e/MJ for waste wood ethanol (e.g. husks).

However, one stakeholder noted that currently there is no methodological allocation for co-

products in the RED selection of typical and default values for lignocellulosic ethanol routes,

despite the significant potential for exploiting the residual material left after extraction of

carbohydrates and sugars from the cellulose component.

• The level of energy inputs into the biofuel conversion plant. FT diesel and LC ethanol plants

are assumed to be self-sufficient for energy, whereas biomethane plants require input

electricity for gas compression (with GHG impacts then set by the grid carbon intensity).

Crude glycerine also requires significant natural gas input for cracking into syngas.

• Minimising transport distances. Road trucking in Brazil and shipping ethanol to the EU adds

~9 gCO2e/MJ to the bagasse route selected, whereas shipping FT diesel from SE Asia is

assumed to add ~6 gCO2e/MJ to EPFBs.

The GHG emissions seen for each route are therefore partially set by the feedstock and location of

production, and partially set by the choice of biofuel conversion technology and configuration. It is

not possible to produce a normalised GHG emissions factor for a common biofuel across all the

feedstocks, since there is no single technology capable of utilising every feedstock – i.e. inherent

within each feedstock is a choice of technologies (as in Section 4.4), and hence GHG emissions.

All routes are able to save at least 70% (many routes are around 90%), with the exceptions of micro-

algae and macro-algae, which are around the 60% threshold (using the current comparator).

Technical innovation in these algae routes aiming at improving production costs, by improving yields

and reducing energy inputs, will also lead to lower GHG emissions being realised. Ethanol from waste

carbon gases is only at ~70% GHG savings – and whilst renewable hydrogen is likely to be very low

emissions, it is important to note that most of the Parliament’s Part C feedstocks proposed for

quadruple counting actually have higher GHG emissions than most of the single count Part A or


60

double count Part B feedstocks. Were the multiple counting lists only to be based on GHG savings,

then algae and carbon capture and utilisation should be receiving the least support, not the most.

None of the selected routes analysed in this study are cheaper than their fossil fuel comparator.

However, the most cost efficient routes (those with <£100/tCO2e saved) are animal fats, tall oil pitch,

bagasse, waste carbon gases, forestry residues and UCO. Many other routes lie in the bracket £100-

300/tCO2e saved, with more expensive routes being crude glycerine and renewable electrolysis (both

mainly due to feedstock costs), and animal manures (due to small scale AD and upgrading costs). As

expected, algae are the least cost efficient routes (approaching 900/tCO2e saved), due to their high

current production costs and modest GHG savings.

4.8 Holistic view

In this section we pull together an overview of the whole list, based on analysis conducted in the

basic information, supply, technology, economics and sustainability sections above. We have

collected and compared the following key criteria in Table 12:

• Global 2020 feedstock supply – based on Table 4. These feedstock potentials are based on

the 2020 supply potentials, converted into PJ/yr of biofuel – but do not consider biofuel plant

capacity constraints, or competing uses. Green is for >1,000 PJ/yr (wastes, straw, manures,

wood and renewables), Orange for 100-1,000 PJ/yr (UCO, animal fats, other agric. residues)

and Red for <100 PJ/yr (energy crops, algae).

• Feedstock price - based on Table 5. The (*) AD routes show their £/t price converted in terms

of theoretical biomethane yields. Waste resources with a gate fee have a negative price, and

those energy dense feedstocks (like tall oil pitch, crude glycerine, UCO and animal fats) have

the highest prices – along with algae and renewable power.

• Biofuel production costs – based on Table 6. For the selected delivered biofuel routes, with

Green for <£25/GJ, Orange for £26-40/GJ, and Red for >£40/GJ.

• Key competing uses – based on Table 7. A summary of the main existing sectors, with red

highlighting those substitute resources that have a high carbon or ILUC risk. Energy crops and

short rotation forestry have their land use highlighted

• Potential price impacts - based on Table 10. Those feedstocks with minimal expansion

potential and high competition levels are likely to experience price increases if diverted to

biofuels. Those feedstocks with a more elastic supply, and lower likely price impacts include

feedstocks being grown specifically for biofuels, or wastes with fewer competing uses.

• % GHG savings – based on Table 11. Most routes are able to achieve above 80% (Green).

Routes using MSW, C&I waste, bagasse, crude glycerine, wine lees, algae and waste carbon

gases are more likely to fall into the 60-80% bracket (Orange), due to cultivation emissions,

chemical or energy inputs, and transport distances.

• Cost of GHG saving – based on Table 11. Combination of low costs and high GHG savings

leads to the lowest cost options for saving GHG emissions.


61

Table 12: Summary of key criteria (Red = Least attractive, Orange = Medium, Green = Most attractive)

Feedstock LHV

(GJ/t)

Global 2020

feedstock pot.

(PJbiofuel/yr)

Feedstock

price (£/GJ)

Biofuel

production

cost (£/GJ)

Key competing uses and substitute resources

Potential

price

impact?

% GHG

savings

Cost of

GHG saving

(£/tCO2e)

Bio-fraction of MSW 6.3 3,253 -6.5* 18 Landfill (none), H&P (nat gas, chip), compost (fert, peat, digest.) Medium 80% 120

Bio-fraction of C&I waste 7.0 2,390 -5.9* 19 Landfill (none), H&P (nat gas, chip) Medium 80% 138

Straw 15.0 5,240 2.8-4.2 26-31 Soil (extract sust), animal feed (hay), bedding (wood) Med-High 81-87% 104-178

Animal manure 1.3* 12,016 0.0* 39 Spreading to land (digestate) NA 84% 406

Sewage sludge 0.5* 301 0.0* 27 AD & incinerate (nat gas), spread (digestate) NA 84% 240

Palm oil mill effluent 0.8* 127 0.0* No import Open pond discharge (none) NA

Empty palm fruit bunches 4.5 172 0.7 27 Burning (none), H&P (nat gas, chip), compost (fert, peat) Low 88% 109

Tall oil pitch 38.0 17 11.1 20 H&P (HFO, chip) High 90% 1

Crude glycerine 14.2 42 17.9 38 Refining (fossil), H&P (HFO, chip), animal feed (sugar, corn) High 70% 331

Bagasse 7.8 1,748 1.1 24 Burning (none), H&P (extract sust trash) Medium 73% 86

Grape marcs 7.8 20 9.4 38 Wine (more grape), compost (fert, peat, digest.) High 87% 266

Wine lees 6.2 5 9.4 30 Wine (more grape), compost (fert, peat, digest.) High 76% 173

Nut shells 16.4 61 4.1 30 H&P (coal, wood, straw) High 95% 138

Husks 13.0 645 7.5 33 H&P (coal, wood, straw) High 87% 196

Cobs 12.4 185 4.6 36 Soil (extract sust), animal feed (hay) Medium 81% 246

Bark, branches, leaves 12.4 1,376 3.1 26 Soil (extract sust) Low 95% 94

Sawdust & cutter shavings 15.2 614 4.4 31 H&P, bedding, paper, panel (all more wood, straw) High 95% 155

Black & brown liquor 12.0 1,714 9.3 32 H&P (HFO, chip) NA 99% 159

UCO 36.0 266 20.1 25 Household disposal (none) Medium 82% 96

Animal fats (Cat I and II) 32.7 119 15.6 20 H&P (HFO, chip) High 82% 12

Miscanthus 13.4 24 4.0 27 New growth assumed (agric. land) Low 87% 107

Short rotation coppice 12.3 47 4.0 33 New growth assumed (agric. land) Low 93% 178

Short rotation forestry 12.3 0 3.5 31 New growth assumed (land) Low 93% 157

Small round-wood 12.3 3,282 2.6 31 Soil (extract sust), paper & panel (more wood) Medium 76-93% 187

Micro-algae 36.0 1 47.5 60 New growth assumed (barren land) Low 58-63% 809 - 859

Macro-algae 2.0* 2 23.8* 64 New growth assumed (coastal seas) Low 60-80% 786 – 1,085

Renewable electricity NA 17,316 26.4 55 New growth assumed (wind-farm, solar PV) Low 89% 376

Waste carbon gases 6.2 511 6.7 23 Flare (none), H&P (nat gas) NA 70% 62

Energy densities marked with * are based on theoretical biogas yields, not the Lower Heating Value of combustion (which would be negative, given the high moisture contents)

Nat gas = natural gas, chip = wood chip, sust = sustainably, HFO = Heavy fuel oil, fert = fertiliser, H&P = heat & power, agric. = agricultural, digest. = digestate


62

5 Analytical framework for assessing feedstocks

During this study, we have developed a structured framework to assess different feedstocks (Annex

IX or otherwise) that are proposed to benefit from additional regulatory support. Based on the set of

key criteria developed in the sections above, we have developed a hierarchy of questions, which can

be used to determine whether or not a particular feedstock meets the criteria required to be eligible

for additional support. We note that meeting the current RED is a minimum entry requirement.

These questions cannot be used to assess whether a certain batch of material available for purchase

will lead to a multiple counting biofuel. Rather, these questions are intended to be used to assess

whether a certain feedstock should be eligible for additional support, alongside performing a more

detailed market analysis on the material type under consideration, including where all the different

sources of the material arise from, and all its alternative uses.

This analytical framework is illustrated as a flow diagram in Figure 6. The main steps are as follows:

1. Is the material classified as a waste, processing residue, agricultural or forestry residue, co-

product or product? If a waste or processing residue, skip to Step 3, otherwise continue to

Step 2.

2. Does it come from land with high biodiversity, or has the status of the high carbon stock land

or peat land utilised changed since 2008? If Yes, then the material should not be eligible

under the RED, let alone multiple counting (STOP). If No, continue to Step 3.

3. What are the key competing uses – i.e. what would otherwise happen to the material if not

used for biofuels production? This requires thinking about the overall feedstock resource as a

whole, and which uses are the most important (and whether these competing uses are able

to utilise all the available material or only a specific smaller proportion). If several uses are

important, then different proportions of the material should follow the different decision

tree branches and be judged separately. Ultimately the question for this step is: if the

feedstock already has an existing use, are there likely and desirable alternative options for

that existing use, were the feedstock to be diverted to biofuel production?

a. Fractions that are landfilled, discharged or open burning (i.e. without energy

recovery), then use of this material for biofuels production is a better use under the

Waste Hierarchy – continue to Step 4

b. The feedstock would not be grown. If this is the case, then is there significant risk of

ILUC associated with growing the feedstock on the land types chosen (e.g. via food

competition), which cannot be mitigated? If so, the feedstock should likely not be

incentivised, as it does not provide a low risk solution to GHG savings (STOP).

Proceed to Step 3c only if ILUC can be avoided or mitigated to an acceptable level –

e.g. via a combination of: use of land not in competition with food, promoting

beneficial use of co-products, protecting high carbon stock land, above baseline yield

increases, supply chain efficiencies and farming system integration (E4tech, 2011).

c. The material would not be collected. In which case, can the collection be carried out

sustainably, i.e. extraction limits obeyed? If so, then continue to Step 4. If not, STOP.


63

d. Fractions of the material are a direct input to food or animal feed. In which case,

ILUC risks for this fraction of the resource are likely to be too high, and hence

diverting this fraction of the material should not be supported (STOP). Importantly,

this STOP decision does not necessarily apply to the whole feedstock resource – it

only applies to the proportion used in food or animal feed. We note that the animal

feed market is highly complex, and further in-depth analysis is likely to be required to

determine exactly which feedstock fractions are being used in these markets (or

which feedstock fractions cannot be used, due to e.g. contamination, prohibitively

expensive testing).

e. Fractions of the material are used for energy, industrial or material applications. In

these cases, does the substitution analysis conducted in Section 4.6 show that there

is a significant risk from diverting material to biofuels? If significant productivity gains

are not possible to offset this diversion, do the substitute resources required in these

competing uses have detrimental carbon, cost, land, environmental or social

impacts? If so, then STOP, otherwise continue to Step 4

f. Fractions of the material would be re-used, recycled or composted. In these cases,

the material should only be taken to biofuels production if the same services as

previously can be provided whilst doing so – if not, STOP. This mainly applies to AD

feedstocks which could return PASS110 certificate digestate to fields in order to still

classify as recycling. We note that the Waste Hierarchy usually categorises biofuels

production as an energy recovery, below these re-use, recycling or composting uses

– hence this could be a barrier. However, the Waste Hierarchy allows for deviation if

demonstrable economic or environmental benefits can be shown – e.g. AD has

better GHG savings than composting. Provided this is the case, proceed to Step 4

4. Are the lifecycle GHG emissions savings of producing biofuel from the material high enough

(versus a suitable fossil comparator) to be supported? If likely less than 60%, then the biofuel

would not be eligible under the RED limits, hence STOP. If above a certain threshold, e.g. 70%

or 80% GHG savings, proceed to Step 5. If between 60% and the threshold, then need to

assess likelihood that the GHG emissions could improve in the future, and whether the

current levels of GHG savings are likely to be acceptable in only the short-term, or are

acceptable longer-term (depends on energy system modelling and decarbonisation

requirements between energy sectors). If acceptable, proceed to Step 5.

5. Would use of the material for biofuels production be economically viable without support,

and hence likely to be deployed? Or would deployment only occur with additional support,

due to, for example, the lack of commercial readiness of the conversion technology – and

hence support (of some appropriate form) is required to bring the technology up a few TRL

levels? Alternatively, is investment required in infrastructure to increase collection volumes

and supply chain efficiencies? Finally, does the route provide cost effective GHG savings –

e.g. a particular route from a material may be more expensive, but offers very high GHG

savings and low ILUC risks, hence is worth supporting. These questions are not necessarily

leading to STOP commands, but rather determining the type and level of support that might

be appropriate, given that the rest of the decision tree has determined there are low risks

and large benefits of using the material for biofuels.


64

This list of criteria and questions characterise feedstocks that should be eligible for support. This list

has been through several iterations and changes in the course of the project, with the information

collected in the course of the study being used to help refine the framework and test its robustness.

It is important to note how sustainability risks are affected by the different potential levels of

volumes mobilised, the potential for additional resource beyond existing competing uses, the

potential for releasing additional resource via efficiency gains, and the level (and potentially order) at

which various competing uses will be impacted. Some wastes and residues (e.g. straw, forest

residues) may be considered sustainable as long as their mobilisation is contained within certain

limits and volumes, but risks may multiply if mobilisation goes beyond such limits. Local or regional

effects may also be important, since biofuel plants will typically be built where there is surplus

resource, even if there is demand in other countries or regions.

The flow diagram in Figure 6 is not intended to be read as a binary decision making mechanism – the

heterogeneity of each feedstock needs to be carefully considered, and any support could only be

provided up to a certain level of resource use (excluding certain higher risk portions). However,

maintaining this subtlety will require carefully implementation into any policy mechanism, to avoid

over-simplifying and setting up blanket bans on whole feedstocks. This study has helped identify for

which feedstocks sustainability risks are a concern for the majority of the feedstock resource base,

and those feedstocks where the sustainability risks are low.

The analysis in this study is time specific, and some of the alternative uses, replacement resources

and risks etc. may change in the future – several of the markets considered are dynamic and will

react to whether or not there are excesses/shortages in other markets. However, the decision tree

has been designed to still be relevant in the future; feedstocks only require re-evaluation against the

criteria when newer or better data becomes available.

Although understanding supply potentials helps prioritise which feedstocks require the highest

quality data or deserve further research – the supply potential of a feedstock does not necessarily

have to be used as an exclusion criteria in this framework. Niche volume feedstocks could still

provide benefits provided they meet the criteria, and could also be used as mixed feed input to

biofuels plants with other larger streams. There is minimal opportunity cost associated with keeping

these feedstocks on the list, and it may also help promote innovation in different routes. We

therefore recommend that smaller resources are not prevented from being assessed, i.e. a minimum

supply threshold is not set as a criteria.


65

Figure 6: Flow diagram for the analytical framework, showing the choices and risks to be considered

Yes

No

YesNo

NO

SUPPORT

FOR THESE

ROUTES

NoNoYes

% not

collected

No = processing residue

Competing uses

What are the current material flows into each competing use? What would otherwise happen to the material - if not used as a feedstock for

biofuels production?

% re-use, recycling or

composting

% landfill,

discharge,

open burn

GHG emission savings

Are the GHG emission savings associated with biofuel production (using most l ikely supply chain) above a desired threshold? e.g. >60% vs. fossil baseline?

NB: All wastes and residues have zero GHG emissions up to the point of collection. Products & co-products allocate these upstream GHG emissions based on energy

content

Is there a significant risk from diverting

the material out of these sectors? I.e.

productivity gains cannot offset the

diversion, and replacement options are

high carbon, high cost, land using or

have determental biodiversity, other

environmental or social impacts?

% used for energy ,

industrial & material

applications

Yes = waste

Viability

Additionality: Would the biofuel route only be economically viable with support? (i .e. the feedstock &

technology would not be deployed without incentives; AND

Does the route provide cost-effective GHG savings that merit further support over other options?

SUPPORT NOT

NEEDED

Yes

SUPPORT

JUSTIFIED

Is there a significant risk that

growing the feedstock on the

land type chosen wil l cause

indirect land use change (ILUC),

i .e. food pressures, and/or

conversion of high-carbon land

to occur elsewhere globally?

No

Yes

No = product/co-product

Is it a waste?

A material which the holder discards,

intends to discard, or is required to

discard? AND has not been

purposefully mixed with other

materials in order to become a waste

No

Yes = residue

Is it an agricultural, aquaculture, fisheries or forestry

residue? i.e. those residues generated in connection

with cultivation, harvest, thinning, peeling or fell ing

Yes

START

Is it a residue?

Production of the material i s NOT the primary aim of the process; AND

The material is NOT a considerable/essential outcome of the process in the case that the material has uses

other than for energy; AND

The process has NOT been deliberately modified to produce a larger quantity or another quality of the

material (at the expense of the main product)

No

Can biofuel be made whilst providing

the same services? e.g. dewatered AD

digestate certified to PAS110 can meet

(or exceed) the same demands as the

raw feedstock, with better GHG

savings than composting - and both

would count as recycled material

% used for

food or

animal feed

NO

SUPPORT

FOR THIS

FRACTION

No

Is growing/

collecting this

material l ikely to

result in

unacceptable

environmental or

social impacts?

Yes

Land criteria

Is it l ikely to come from land with high

biodiversity value, high carbon stock or

peat land (as defined in the RED)?

% not

grown

Yes

NO

SUPPORT

FOR THIS

FRACTION

NO

SUPPORT

FOR THIS

FRACTION

NO

SUPPORT

FOR THIS

FRACTION

NO

SUPPORT

FOR THIS

FRACTION

NO

SUPPORT

FOR THIS

FRACTION


66

5.1 Recommendations for the Annex IX lists

This final section provides a preliminary assessment of each of the current Annex IX feedstocks

against the developed analytical framework to determine which justify additional policy support. This

analysis has been carried out based on the data collected and displayed above in Section 4, with the

results of this analysis displayed in Table 13.

The material classifications are as given in Table 3, with the exception of bagasse and nut shells,

which although the RED currently lists as agricultural residues, are more correctly processing residues

of downstream industrial plants. In the indirect risks column, we give the most likely substitute

resources that have sustainability issues, and hence require avoiding. We are not providing a

complete list of unacceptable substitutions, i.e. substitute resources that are not listed in Table 3 are

not necessarily acceptable. For example, if only heavy fuel oil in heat & power is listed as an indirect

risk for a feedstock, using coal or natural gas instead would have similar risks of increasing fossil fuel

emissions – but as these different fuels have been judged less likely to be substituted, for brevity we

have not included them.

Table 13 presents some of the key findings of this Annex IX study:

• Several feedstocks have a significant uncollected resource that could be diverted from

current disposal, produced without indirect impacts, or sustainably extracted with limited

competition. MSW, C&I wastes, manures, forest residues, small round-wood, algae and

renewable electrolysis are likely to need further support to be economically viable or help

commercialise conversion technologies. UCO may not require additional support, depending

on infrastructure investments to access domestic supplies.

• Some feedstocks face higher levels of competition, and hence only a smaller unused fraction

of the total supply is likely to be at low risk of causing indirect impacts. This includes straw,

cobs, sewage sludge, bagasse, empty palm fruit bunches and waste carbon gases.

• For other feedstocks, such as animal fats, nut shells, husks, sawdust & cutter shavings, tall oil

pitch, brown & black liquor, support should only be provided if the industries involved can

show replacement of the missing energy demands with low carbon, sustainable alternatives

– otherwise there is a risk of increased fossil fuel use offsetting any GHG savings. Straw

currently used for animal bedding could also fall into this category.

• Energy crops and short rotation forestry have longer-term potential (post 2020), but will

require strict enforcement of ILUC mitigation measures to ensure the land grown on avoids

food competition as well as being low risk (e.g. protecting carbon stocks).

• A few feedstocks should probably not receive additional support for biofuel production, as

they have multiple competing uses with high risks of detrimental indirect impacts – these

include crude glycerine, grape marcs and wine lees.

• Regardless of the level of competing uses and substitute resources, additional sustainable

feedstock supplies can be found for biofuels production if processes currently used in

competing use sectors improve their efficiency, thereby releasing biomass material whilst

still meeting the same system demands. This effect can apply to almost every feedstock, but

will be particularly important for captive feedstocks such as black & brown liquor, waste

carbon gases, palm oil mill effluent, animal manures and sewage sludge, along with all those


67

feedstocks with major uses in the heat & power sectors. However, defining the extent to

which different users can improve their efficiency, and are willing to pay the upfront costs of

doing so, is a difficult question to answer. Therefore, the amount of additional low risk

resource that can be generated without indirect sustainability impacts via this approach is

currently unclear, and would require further analysis.

In summary, there is significant potential for biofuel production using low ILUC risk feedstocks. Those

feedstocks that (partially) fail to meet the criteria either do so because agricultural land is being used

(directly or indirectly), or the competing uses are likely to substitute the diverted feedstock with

fossil fuels. However, many of the feedstocks in Annex IX meet the framework criteria – or could do

so where only uncollected fractions are considered, significant productivity improvements are

realised to release material, or when fossil fuel substitution can be avoided.

In terms of a working definition for those Annex IX feedstocks that are lowest risk – many of the

indirect risks can be avoided if under-utilised resources are sustainably sourced, land is not

converted, and competing use sectors are decarbonised. “Under-utilised” encompasses additional

collectable supplies, few competing uses, and/or inefficient consumption that can be improved upon

to release material. Additional policy support is then justified for these low risk feedstocks if RED

minimum requirements regarding land types are met, and biofuel lifecycle GHG emissions are above

a chosen threshold (in light of economy-wide CO2 reduction activities). Different types or levels of

support may also be required to commercialise the biofuel conversion technology and bring down

production costs.

Most of the novel technologies that convert these eligible low risk feedstocks to biofuels still need to

be commercialised, and only a few of the routes are currently economically competitive (compared

to fossil transport fuels or conventional food-based biofuels) – despite the attractive GHG savings on

offer. Ongoing European policy negotiations regarding advanced biofuels need to base the final

Annex IX lists on robust evidence, incorporating clear guidelines and definitions, if the resulting

mechanism is to support truly sustainable biofuels – hopefully, this study is a useful tool to help

move the debate in this direction.


68

Table 13: Analytical framework results

Feedstock Classification

Risk of food

competition

via ILUC?

Biodiverse, C

stock, peat land?

Competing

uses? Indirect risks? GHG savings

Economic

viability Additional support justified?

Bio-fraction of MSW Waste - - Medium Nat gas (H&P), fertiliser

(compost) Good More costly

Yes, depends on conversion tech

and landfill tax

Bio-fraction of C&I waste Waste - - Medium Nat gas (H&P) Good More costly Yes, depends on conversion tech

and landfill tax

Straw Agric residue - Unlikely a concern Medium-

High Hay (feed) Excellent More costly

Yes, for sust additional potential

or sust bedding alternatives

Animal manure Agric residue - Unlikely a concern Low Low Good Expensive Yes

Sewage sludge Waste - - High Nat gas (H&P) Good More costly Yes for under-utilised fraction

Palm oil mill effluent Waste - - Low Low Biogas unlikely to reach EU

Empty palm fruit bunches Process residue - - Low Low Excellent More costly Yes for under-utilised fraction

Tall oil pitch Process residue - - High Fuel oil (H&P) Excellent Competitive Only if replaced with sust fuel

Crude glycerine Process residue - - High Many (H&P, feed, ind) Good Expensive Likely too many risks

Bagasse Process residue - - Medium Low Good Competitive Yes for under-utilised fraction

Grape marcs Process residue - - High More grape needed Excellent Expensive Industry impact likely too high

Wine lees Process residue - - High More grape needed Good More costly Industry impact likely too high

Nut shells Process residue - - High Coal (H&P) Excellent More costly Only if replaced with sust fuel

Husks Process residue - - High Coal (H&P) Excellent More costly Only if replaced with sust fuel

Cobs Agric residue - Unlikely a concern Medium Hay (feed) Good More costly Yes, where sustainable

additional potential

Bark, branches, leaves Forest residue - Avoid conversion Low Low Excellent More costly Yes, where sustainable


Sawdust & cutter shavings Process residue - - High Low if extra sust. wood Excellent More costly Only if replaced with sust fuel

Black & brown liquor Process residue - - High Fuel oil (H&P) Excellent More costly Only if replaced with sust fuel

UCO Process residue - - Medium-

Low Low Excellent Competitive

Yes, where sustainable


Animal fats (Cat I and II) Process residue - High Fuel oil (H&P) Excellent Competitive Only if replaced with sust fuel

Miscanthus Product Yes Avoid conversion - - Excellent More costly Only if ILUC mitigation enforced

Short rotation coppice Product Yes Avoid conversion - - Excellent More costly Only if ILUC mitigation enforced

Short rotation forestry Product Yes Avoid conversion - - Excellent More costly Only if ILUC mitigation enforced

Small round-wood Product - Avoid conversion Medium Low if extra sust. wood Good More costly Yes, where sustainable


Micro-algae Product Negligible Unlikely a concern - - Threshold Expensive Yes

Macro-algae Product Negligible Not a concern - - Threshold Expensive Yes

Renewable electricity Product Minimal Unlikely a concern - - Excellent Expensive Yes for new sites only

Waste carbon gases Process residue - - Low Nat gas (H&P) Good Competitive Yes for under-utilised fraction

69

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30/10/13]

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[Accessed 30/10/13]

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Yi Zheng et al. (2012) Ensilage and Bioconversion of Grape Pomace into Fuel Ethanol. J. Agric. Food Chem.,

2012, 60 (44), pp 11128–11134

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Appendix B - Feedstock definitions

This Appendix contains working definitions for each of the feedstocks considered in the study (or

mentioned in Section 4.1), and highlights the main areas of uncertainty or disagreement. This is

based on IEEP (2013) information, updated and supplemented with insights from the industry and

policymaker interviews we conducted.

European Commission RED & FQD Annex IX feedstocks – multiple counting proposals as of 17

October 2012

Part A. Feedstocks whose contribution towards the target referred to in Article 3(4) shall be

considered to be four times their energy content

(a) Algae.

Micro-algae are generally single-celled whereas macro-algae (seaweeds) are multicellular plant-like organisms.

Algae are found in both marine and fresh-water environments around the world and may be harvested from

wild stocks or cultivated. Given a lack of further definition, the ILUC proposal is assumed to cover algae from

all sources, but not micro-crops such as Lemna spp

(b) Biomass fraction of mixed municipal waste, but not separated household waste subject to recycling

targets under Article 11(2)(a) of Directive 2008/98/EC of the European Parliament and of the Council of 19

November 2008 on waste and repealing certain Directives.

The relevant article of the Waste Framework Directive refers to "paper, metal, plastic and glass’, which leaves

food waste and green waste (i.e. garden waste) as eligible municipal waste streams. It could be construed that

biodegradable plastics and non-separated card and paper are also part of the definition.

(c) Biomass fraction of industrial waste.

This category may encompass a range of waste streams, without further definition provided in the ILUC

proposal. An indicative, non-exhaustive list includes: waste paper, cardboard and wood (e.g. used in packaging

and transport); food waste occurring at the production stage (though some of this, such as animal fats falls

under another biomass category) and also retail stages (supermarkets).

(d) Straw.

Straw refers to the dry stalks of crops that remain following the removal of the grain and chaff during the

harvesting process and can encompass cereal straw (e.g. from wheat, barley, rye, oats), maize stover (but not

cobs), oilseed rape straw, rice straw. This would likely also include sugarcane trash/leaves.

(e) Animal manure and sewage sludge.

Animal manure includes liquid manure and slurry as well as solid manure and dung, produced from cows,

horses, pigs, chickens, sheep and other animals, birds and pets. Solid manures and dungs often contain a high

proportion of straw, given its use in animal bedding.

Sewage sludge is the watery residual and semi-solid material left from industrial wastewater or sewage

treatment processes.

(f) Palm oil mill effluent and empty palm fruit bunches.

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Palm oil mill effluent and empty palm fruit bunches are by-products of the palm oil processing industry.

Typically, for every tonne of fresh palm bunches processed, 0.65 tonnes of palm oil mill effluent will be

produced and around 0.2-0.22 tonnes of empty fruit bunches, the residues remaining after threshing the fresh

fruit bunches.

(g) Tall oil pitch.

Tall oil pitch is a highly viscous residue from the distillation of crude tall oil. Crude tall oil stems from crude

sulphate soap, which is (along with black liquor) a by-product of the conifer based paper pulp making process.

(h) Crude glycerine.

Crude glycerine (also crude glycerol) is a by-product of biodiesel production and the processing of animal and

vegetable fats and oils. It can also be synthesised. Biodiesel production yields around 10 per cent crude

glycerine output. Crude glycerine can be upgraded or refined to yield glycerine, removing methanol and other

impurities, a process that is relatively expensive, at least at a small scale, and there is a lack of refining capacity

in the EU currently.

(i) Bagasse.

Bagasse is the fibrous residue from the sugarcane crushing process, typically around 13% of the wet

unprocessed sugarcane (with the sugar content being around 14%)

(j) Grape marcs and wine lees.

Grape marc, also known as ‘pomace’, is the residue that remains after the pressing of fresh grapes. ‘Wine lees’

refers to the sediment remaining in the vessels used in wine production, consisting of dead yeasts and other

solid particles precipitated during the fermentation process.

(k) Nut shells.

Nut shells are the outer hard casing of nuts. This category is understood to include almonds, though the

proposal does not specify this. The largest source of nutshells in the EU is from almond, walnut and hazelnut

production.

(l) Husks.

Husks (also known as hulls) are the protective outer coating of seeds, nuts, grains or fruit. In the case of wheat,

the husk is separated from the kernel during the threshing procedure. Once removed the husk becomes a

constituent of the ‘chaff’ and is regarded as an agricultural residue. This is thought to primarily refer to the

leafy outer layer surrounding the ear of the maize (corn) plant. A wider definition of husks could include other

plant residues remaining after processing, including olive cores and pulp (which can also be referred to as non-

grape marc and lees).

(m) Cobs

A cob is the central, fibrous core of a maize ear to which kernels or grains are attached. Isolated cobs are a by-

product from the harvesting of grain maize kernels for food, chemicals or biofuels use

(n) Bark, branches, leaves, saw dust and cutter shavings.

This category covers both primary woody residues, such as bark, and branch leaves, as well as processing

residues, such as saw dust and cutter shavings. Primary residues can include forest biomass as well as woody

biomass on non-forest land, such as prunings and cuttings from permanent crops (e.g. olives, vines) and

orchards.

(missing) Black & brown liquors

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Black liquor is the spent cooking liquor from the kraft process when digesting pulpwood into paper pulp

removing lignin, hemicelluloses and other extractives from the wood to free the cellulose fibres. The

equivalent spent cooking liquor in the sulfite process is usually called brown liquor, but the terms red liquor,

thick liquor and sulfite liquor are also used.

Part B. Feedstocks whose contribution towards the target referred to in Article 3(4) shall be

considered to be twice their energy content

(a) Used cooking oil.

Also known as recovered vegetable oil or waste vegetable oil, used cooking oil is typically collected from

catering establishments and industrial food processors as a waste from food production. It may also be

collected from domestic households where a collection infrastructure exists.

(b) Animal fats classified as category I and II in accordance with EC/1774/2002 laying down health rules

concerning animal by-products not intended for human consumption.

Rendered animal fats are obtained by the rendering (crushing and heating) of animal by-products. There are

three distinct categories of tallow products, as defined by the Animal By Products Regulations (ABPR).

Category 3 materials are derived from materials which could otherwise enter the food chain. Category 2

materials are derived from low risk material such as animals that have died on-farm and their manure.

Category 1 material carries a risk which cannot be treated with heat/pressure sterilisation and transformed

into a safe product usable in the feed chain or as fertiliser. It is for example derived from material deemed to

carry a BSE/TSE risk such as spinal and brain material.

(c) Non-food cellulosic material.

Non-food crops grown for the purposes of bioenergy production. These include crops such as Miscanthus,

other energy grasses, certain varieties of sorghum and industrial hemp, but exclude crops with high lignin

content, such as wood products.

(d) Ligno-cellulosic material except saw logs and veneer logs.

This is understood to include dedicated woody energy crops such as Short Rotation Coppice (SRC), e.g. willow

and poplar, Short Rotation Forestry (SRF), as well as small round-wood and pulpwood. There has been no

mention to date by policymakers regarding exclusion of small round-wood or pulp wood from this category,

given their use in the forestry products sector (similar to saw logs and veneer logs).

European Commission RED & FQD Annex IX feedstocks – multiple counting proposals as of 11

September 2013

Part A. Feedstocks from waste and residues whose contribution towards the target referred to in

Article 3(4) shall be considered to be once their energy content and which contribute towards the

2,5% target referred to in Article 3(d)(i)

(b) Biomass fraction of mixed municipal waste, but not separated household waste subject to recycling

targets or separate collection under Article 11(1) and (2)(a) of Directive 2008/98/EC of the European

Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives; derogations

may be granted by Member States for separate biowaste where processes allow the production of both

compost and biofuels.

As defined above, but with additional information on compost.

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(c) Biodegradable fraction of industrial, retail and wholesale waste, but not waste subject to separate

collection under Article 11(1) of Directive 2008/98/EC, and provided that the waste hierarchy and the

principle of cascading use are respected.

As defined above, but with additional exclusions for better waste hierarchy uses.

(d) Straw.

(e) Animal manure and sewage sludge.

(g) Tall oil pitch.

(h) Crude glycerine.

(i) Bagasse.

(j) Grape marcs and wine lees.

(k) Nut shells.

(l) Husks.

(m) Cobs.

(n) Bark, branches, leaves, saw dust and cutter shavings.

(d)-(n) All as defined above. Note the removal of (f) palm oil mill effluent and empty palm fruit bunches.

(na) Ligno-cellulosic material except saw logs and veneer logs.

This has the same title as Part B (d) the October 2012 proposal – but this is unlikely to have the same definition

as previously (e.g. SRC, SRF), due to the uncertainty surrounding energy crops. It is still unclear whether energy

crops will fall under the 6% food cap, if defined as ‘other energy crops grown on land’ – a RTFG briefing note

mentions that a verbal amendment was made at the last minute to not cap energy crops. It is also unclear

how this feedstock category overlaps with (n) above – as most bark, branches, saw-dust and cutter shavings

are indeed ligno-cellulosic material. We also note that the September 2013 Parliament amendments have the

following definition upfront in the text glossary section: ‘Non-food ligno-cellulosic material’ means land-based

woody energy crops such as short-rotation coppice and short-rotation forestry crops‘ – but that this definition

does not appear to make it into the Annex.

Part B. Feedstocks from waste and residues whose contribution towards the target referred to in

Article 3(4) shall be considered to be twice their energy content

(a) Used cooking oil.

As defined above.

(b) Animal fats classified as category I and II in accordance with EC/1774/2002 laying down health rules

concerning animal by-products not intended for human consumption.

As defined above.

Note the removal of (c) Non-food cellulosic material, e.g. Miscanthus, sorghum, hemp etc. The September

2013 Parliament amendments have the exact same full definition as the Commission, but this definition is

upfront in the text glossary section, not in the Annex. It is also still unclear whether these will fall under the 6%

food cap, if defined as ‘other energy crops grown on land’ – a RTFG briefing note mentions that a verbal

amendment was made at the last minute to not cap energy crops.

Part C. Feedstocks whose contribution towards the target referred to in Article 3(4) shall be

considered to be four times their energy content and which contribute towards the 2,5% target

referred to in Article 3(d)(i)

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(a) Algae (autotrophic).

As above for Algae. We presume that the word “autotrophic” has been added to exclude dark or aerobic

fermentation methods using algal organisms (e.g. certain sugar to diesel routes). Both micro-algae and macro-

algae as defined previously are autotrophic.

(b) Renewable liquids and gaseous fuels of non-biological origin.

Gaseous or liquid fuels other than biofuels whose energy content comes from renewable energy sources other

than biomass and which are used in transport. This will presumably cover hydrogen from electrolysis using

renewable electricity.

(c) Carbon Capture and Utilisation for transport purposes.

A process that captures carbon (CO/CO2) rich waste and residues gas streams from non-renewable energy

sources and transforms them into fuels that are used in the transport sector. This late addition to the lists will

presumably cover industry off-gas conversion to biofuels, such as syngas fermentation to ethanol (e.g. the

Lanzatech process)

(d) Bacteria.

As discussed in Section 4.1, it is very unclear as to what “Bacteria” is actually meant to encompass, and

whether it is actually a process, not a feedstock. There is no definition available or any further information

regarding potential project developers looking to produce biofuel from this route (and no obvious match in the

public domain) – plus none of our interviewees were able to provide further insight.

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Appendix C - Feedstock factsheets

The following pages contain the background information gathered for each feedstock. These pages

are stand-alone sources of information (attached separately to this report), arranged by:

• Top bar: Definition, picture

• Upper left: Basic information, properties and supply chain

• Upper right: Feedstock and biofuel supply potential

• Lower left: GHG emissions, competing uses and indirect impacts

• Lower right: Feedstock prices and biofuel production costs

The order of the factsheets follows the Annex IX lists, plus the additional feedstocks identified in

Section 4.1. Note that several of the feedstock classes have been split into two separate factsheets

where this improves transparency, as there are significant variations in properties, volumes,

economics and/or sustainability between the feedstocks within that class.

• Bio-fraction of MSW

• Bio-fraction of C&I Waste

• Straw

• Animal manure and sewage sludge

o Animal manure

o Sewage sludge

• Palm oil mill effluent and empty palm fruit bunches

o Palm oil mill effluent

o Empty palm fruit bunches

• Tall oil pitch

• Crude glycerine

• Bagasse

• Grape marcs and wine lees

o Grape marcs

o Wine lees

• Nut shells

• Husks

• Cobs

• Bark, branches, leaves, saw dust and cutter shavings

o Bark, branches, leaves (i.e. forestry residues)

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o Saw-dust and cutter shavings

• Black and brown liquor

• Used cooking oil

• Animal fats Categories I & II

• Non-food cellulosic material, e.g. Miscanthus

• Ligno-cellulosic material except saw logs and veneer logs:

o Short Rotation Coppice

o Short rotation forestry/small round-wood

• Algae (autotrophic)

o Micro-algae

o Macro-algae

• Renewable liquids and gaseous fuels of non-biological origin, e.g. renewable electrolysis

• Carbon Capture and Utilisation for transport purposes, e.g. waste carbon gas

Advanced Biofuel Feedstock: An assesment of sustainability

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