Sustainability assessment of Annex IX feedstocks Richard Taylor UK - - PowerPoint PPT Presentation

SLIDE 1

| Strategic thinking in sustainable energy

Sustainability assessment of Annex IX feedstocks

Richard Taylor

UK Department for Transport stakeholder workshop

29th November 2013

Delivered under the Framework for Transport-Related Technical and Engineering Advice and Research – Lot 2 Road

SLIDE 2

E4tech: Strategic thinking in sustainable energy

• International consulting firm, offices in UK and Switzerland
• Focus on sustainable energy
• Established 1997, always independent
• Deep expertise in technology, business and strategy, market

assessment, techno-economic modelling, policy support…

• A spectrum of clients from start-ups to global corporations

SLIDE 3

| Strategic thinking in sustainable energy

Policy context

Background and study objectives

SLIDE 4

What is Annex IX and where did it come from?

4

• Continued debate surrounding ILUC, stalled biofuel uptake
• Recognition that non-food feedstocks and novel conversion technology will

have a role in providing biofuels, but commercialisation has been slow

• Implementation of double counting in the current Renewable Energy Directive

(RED) has been inconsistent, with poorly defined “wastes & residues”

• Therefore, Commission moved to inclusive list approach, to try and support

low ILUC risk feedstocks by multiple counting in the RED proposals

• REFUREC working group classifications in 2010/2011, Annex IX list then

created by Commission in 2012 and many edits since then…

• Opaque process, lists and proposed mechanisms still changing, and definitions

yet to be ironed out

SLIDE 5

Which feedstocks are in scope?

5

• Bio-fraction of MSW
• Bio-fraction of C&I waste
• Animal manure
• Sewage sludge
• Palm oil mill effluent
• Empty palm fruit bunches
• Crude glycerine
• Bagasse
• Grape marcs
• Wine lees
• Straw
• Cobs
• Husks
• Nut shells
• Bark, branches & leaves (e.g. forest residues)
• Saw dust & cutter shavings
• Black & brown liquor
• Tall oil pitch
• Used cooking oil (UCO)
• Animal fats categories I & II
• Non-food cellulosic material (e.g. miscanthus)
• Ligno-cellulosic material except saw logs and veneer logs

(e.g. short rotation coppice & forestry, small round-wood)

• Micro-algae
• Macro-algae
• Renewable liquids & gases of non-biological origin (e.g.

hydrogen via renewable electrolysis)

• Carbon capture and utilisation (e.g. steel mill waste gases)
• Bacteria

SLIDE 6

Summary of Commission, Parliament & Council positions

6

• Commission proposal (Oct 2012):
• 2x UCO & animal fats, energy crops. 4x rest of Annex IX
• 5% food cap
• No sub-target
• Parliament vote (Sep 2013):
• 2x UCO & animal fats, 4x algae, bacteria, RE liquids/gases, carbon capture. 1x rest
• 6% food cap to include energy crops
• 2.5% sub-target for 1x and 4x feedstocks
• Council responses (Oct 2013 ongoing):
• 2x all, but no bacteria or carbon capture. 2x towards RES for non-UCO & animal fats
• 7% food cap
• Discretionary (was 1%) sub-target for non-UCO & animal fats

SLIDE 7

Study objectives

7

• Summarise recent European biofuels policy developments
• Conduct stakeholder interviews on the efficiency of multiple counting
• Assess and compare each Annex IX feedstock on:
• Supply potentials
• Technologies
• Economics
• Competing uses
• Greenhouse gas emissions and sustainability
• Develop a framework criteria and rationale for support

SLIDE 8

What will the study be used for?

8

• To the best of our knowledge, this study provides for the first time:
• a holistic analysis of the whole Annex IX list
• a defined rationale for including feedstocks within Annex IX
• Evidence for DfT in their Member State negotiations within Europe
• Inform longer-term UK biofuels strategy
• Input to eligibility criteria for the UK advanced biofuel demo competition
• Study started 17th September, findings delivered 5th November, and review

comments received last week. Finalised report being delivered 12th December

• We will take any significant feedback from this workshop into consideration

SLIDE 9

| Strategic thinking in sustainable energy

Assessment of multiple counting

Synthesis of stakeholder interviews

SLIDE 10

Effectiveness of multiple counting

10

• Series of interviews conducted to gather industry opinions – asking:
• Impact of double-counting to date: investment, uptake and GHGs?
• Lessons learnt: fraud, inconsistency and price impacts?
• Will proposed multiple counting stimulate deployment and use in EU?
• Is there support for 4x counting?
• Effectiveness of sub-target for new conversion technologies – what is achievable?
• How important is multiple counting vs. targets and framework for 2030?
• We encourage you to provide further input regarding these questions in the

forthcoming Call for Evidence

SLIDE 11

UCO and animal fat biodiesel have seen strong EU uptake

11

• 2x counting under current RED has seen

a large rise in the collection & conversion

• f UCO & animal fats into biodiesel
• A key compliance option for national

mandates, and high GHG savings

• UK largest market for UCO. Duty

differential has also played a role

• Sharp price rises for UCO and animal

fats, e.g. UCO was at 25-50% discount to virgin veg oils, now at 5-20% premium. Animal fat users also impacted

• Fraud has presented problems, chain of

custody certification is improving

Share of EU biodiesel demand from animal fats & UCO (USDA, 2013) Animal fat & UCO biodiesel reported under the UK RTFO (DfT, as of 7th Nov 2013)

UK EU

SLIDE 12

But slow uptake of novel conversion technologies

12

• To date, little evidence of double counting triggering investment in more novel

conversion technologies (e.g. LC ethanol, BTL) that are trying to bridge the ‘valley of death’ towards commercialisation

• Pricing at 2x the price difference between conventional biofuels and fossil

fuels means that 2x counting amplifies product price volatility

• Only applies to 2020, and full-scale plants will take several years to construct

and will be operating for 20+ years

• Cannot be valued or reliably factored in when making high capital cost

investment decisions

• Lack of technical progress and tough financing environment are also

contributing factors

• Many interviewees stated multiple counting is not an effective mechanism to

achieve uptake of novel conversion technologies

SLIDE 13

Objectives of multiple counting are not clear

13

• Opinions on the efficacy of double counting vary due to a lack of defined or

quantified objectives

• Commission wanted to stimulate the uptake of more sustainable feedstocks

(diversify the feedstock base), leading to greater market penetration of low ILUC risk biofuels

• Multiple counting will continue to support UCO and animal fat biodiesel
• Energy targets are effectively lowered and realised GHG savings are reduced

by multiple counting – for these reasons, plus heightened risks of fraud and market distortions, there is very little support for 4x counting within Europe

SLIDE 14

Alternative mechanisms

14

• Sub-targets seen as a better mechanism for securing the deployment of novel

conversion technologies, as provides a more certain market demand

• Targets of 0.5 - 1.5% of EU transport energy cited as being achievable by 2020,

but 2.5% seen as too high

• Stakeholders have said only novel conversion technologies ought to be

included within a sub-target - i.e. UCO & animal fat biodiesel should not qualify as ‘advanced’ biofuels. However, we note this could neglect conventional technologies processing novel feedstocks (e.g. algal routes)

• Policy uncertainty in the EU is a major concern for industry stakeholders, and

will continue to stifle investment unless a clear and stable framework is set

• ut. Interviewees stated that biofuel, or renewable (or GHG) transport targets

to at least 2030 are imperative for novel routes to develop: a sub-target for

• nly 2020 will not be enough

SLIDE 15

| Strategic thinking in sustainable energy

Feedstock analysis

Supply, technology, economics, competing uses and sustainability

SLIDE 16

Data gathering on 28 feedstocks

16

• Based on best evidence publically available that could be gathered within the

short duration of the study

• For a more detailed picture, or regional focus, market analyses for individual

feedstocks will be required

• The full report highlights where the evidence is most uncertain and additional

information or research is needed

• Please note – the following slides contain important information on all 28

feedstocks, presented together for comparison purposes. We have made the slides as legible as possible!

SLIDE 17

Supply potentials show large resource availability – but some feedstocks available nearer 2030 or always niche

17

UK EU Global UK EU Global UK EU Global Renewable electricity (Mtoe) 2.2 51 403 235 2,455 17,316 ↑↑↑ ↑↑↑ ↑↑↑ Bio-fraction of C&I waste 25 133 560 87 359 2,390 ↔ ↔ ↑↑ Bio-fraction of MSW 22 189 861 68 460 3,253 ↓ ↓ ↑↑ Animal manure 68 1,521 16,202 43 853 12,016 ↔ ↑ ↑↑ Straw 7.4 - 11 72 885 52 870 5,240 ↔ ↓ ↑↑ Bark, branches, leaves 3.4 127 317 15 532 1,376 ↔ ↔ ↑ Small round-wood 3.3 333 829 14 1,320 3,282 ↔ ↑ ↑ Sewage sludge 35 632 1,069 9.5 165 301 ↑↑ ↑ ↑↑↑ Saw dust & cutter shavings 1.6 37 104 8.5 221 614 ↔ ↑↑ ↑↑ UCO 0.13 1.1 2.8 6.6 102 266 ↔ ↔ ↑↑ Animal fats Cat I & II 0.12 1.2 3.5 3.7 39 119 ↔ ↔ ↑↑ Waste carbon gases 0.9 10 101 3.3 37 511 ↔ ↔ ↑↑ Black and brown liquor 0.3 66 200 1.9 498 1,714

• ↑

↑ Miscanthus 0.12 0.9 1.2 1.8 21 24 ↑↑↑ ↑↑↑ ↑↑↑ Short rotation coppice 0.04 0.3 9 0.46 5.6 47 ↑↑↑ ↑↑↑ ↑↑↑ Crude glycerine 0.03 1.0 2.9 0.36 12 42 ↔ ↔ ↑↑ Grape marcs 0.02 4.1 7.7 0.05 9.5 20 ↔ ↔ ↑ Cobs 0.01 3.6 36 0.04 17 185 ↔ ↔ ↑↑ Tall oil pitch 0.001 0.16 0.4 0.02 6.6 17

• ↑↑

↑↑ Wine lees 0.004 0.8 1.5 0.01 2.6 5.4 ↔ ↔ ↑ Macro-algae 0.01 0.01 0.24 2.2 ↑↑↑ ↑↑↑ ↑↑↑ Nut shells 0.8 10 4.5 61

• ↔

↑↑ Husks

• inc. in straw

0.5 120 2.3 645

• ↔

↑↑ Micro-algae 0.002 0.51

• ↑↑

↑↑↑ Palm oil mill effluent 159 127

• ↑↑↑

Empty palm fruit bunches 51 172

• ↑↑↑

Bagasse 413 1,748

• ↑↑↑

Short rotation forestry ↑↑↑ ↑↑↑ ↑↑↑ 2020 transport fuel production potential (PJ/yr) Feedstock Current feedstock supply (wet Mt/yr) Expand post 2020?

SLIDE 18

Numerous potential conversion pathways exist

18

Principal pathway for each feedstock shown by bolder lines. Feedstocks are colour-coded by finished biofuel type

SLIDE 19

Technologies are at different levels of commercial maturity – only some can have a large impact by 2020

19

SLIDE 20

Feedstock prices & biofuel production costs (£/GJbiofuel)

20

Feedstock Region selected Current price (£/t) Resource (£/GJ biofuel) 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

• 41 (-46 to -24)
• 13.1
• 27.8

49% AD + upgrade

• 3.0

18 Bio-fraction of C&I waste UK

• 41 (-46 to -10)
• 11.8
• 27.8

49% AD + upgrade

• 3.0

19 Tall oil pitch EU 420 12.4 0.8 3.6 89% HVO

• 2.9

20 Animal fats Cat I & II UK 480 15.6 0.1 0.5 94% FAME

• 3.5

20 Waste carbon gases EU 42 11.1

• 7.9

60% Eth ferment

• 3.5

23 Bagasse Brazil 8.5 (2.8 to 34) 2.9 0.2

• 9.8

37% LC ethanol 3.2 4 4.8 24 UCO UK 724 21.3 0.1 0.5 98% FAME

• 3.5

25 Bark, branches, leaves EU 39 (34 to 44) 3.2 1.8 3.9 14.6 35% FT diesel

• 2.9

26 Sewage Sludge UK 0 (-41 to 0) 0.0

• 23.7

49% AD + upgrade

• 3.0

27 Straw UK 63 (48 to 75) 11.1 2.1 9.8 37% LC ethanol

• 3.5

27 Empty palm fruit bunches SE Asia 3 (2 to 4) 2.0 4.2 14.6 35% FT diesel 1.5 1.4 3.6 27 Miscanthus UK 53 10.6 2.8 9.8 37% LC ethanol

• 3.5

27 Wine lees EU 54 15.9 1.5 9.1 54% 1G ethanol

• 3.5

30 Nut shells EU 67 (49 to 85) 11.7 0.7 14.6 35% FT diesel

• 2.9

30 Corn stover US 39 7.4 1.2 9.8 37% LC ethanol 4.5 4 4.8 31 Saw dust & cutter shavings EU 67 12.7 1.1 14.6 35% FT diesel

• 2.9

31 SRF/small round-wood UK 42 9.9 1.9 1.9 14.6 35% FT diesel

• 2.9

31 SRF/small round-wood US 32 7.0 1.7 1.4 9.8 37% LC ethanol 2.8 4 4.8 31 Black and brown liquor EU 112 (0 to 175) 16.1

• 12.9

58% DME

• 3.0

32 Husks UK 97 (80 to 110) 10.4 9.6 9.8 37% LC ethanol

• 3.5

33 Short rotation coppice UK 50 11.5 1.8 1.9 14.6 35% FT diesel

• 2.9

33 Cobs US 57 (46 to 68) 12.3 1 9.8 37% LC ethanol 4.5 4 4.8 36 Grape marcs EU 54 23.4 1.7 9.8 37% LC ethanol

• 3.5

38 Crude glycerine EU 253 29.8

• 4.9

60% Methanol

• 3.7

38 Animal manure UK 0 (0 to 34) 0.0 2.2 33.3 49% AD + upgrade

• 3.0

39 Renewable electricity UK £95/MWh 36.7

• 7.8

72% Electrolysis

• 10.3

55 Micro-algae US 1,710 50.4 1 0.5 98% FAME 1.2 3.3 4.2 60 Macro-algae UK 48 48.2 1.2 11.5 49% AD + upgrade

• 3.0

64 Palm oil mill effluent SE Asia 0.0 AD biogas Not imported, hence not analysed further

SLIDE 21

Sustainability assessment methodology

21

• We conducted a “risk screening” exercise, in order to highlight if there are

certain factors that could be problematic for a particular feedstock:

• Identify (and quantify flows into) competing uses
• 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

• Indicate the risk of significant indirect GHG emissions associated with these

substitutes

• Assess other associated direct and indirect environmental and social impacts
• Indicate the risk of the diversion having a significant impact on feedstock prices
• Estimate the direct GHG emissions associated with using the feedstock for biofuel

production

SLIDE 22

Summary of competing uses and likely substitute resources

22

Region Disposal Left/spread to land Heat and/or power Compost Animal feed & bedding Industrial uses Other Bio-fraction of MSW UK None Natural gas, wood chip Peat, fertiliser, AD digestate Bio-fraction of C&I waste UK None 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 EPFBs SE Asia None Tall oil pitch EU Fuel oil, wood chip Crude glycerine EU Fuel oil, wood chip Corn, sugars Fossil crude oil Bagasse Brazil None Cane trash if extract sust Grape marcs & wine lees EU Peat, fertiliser, AD digestate More grapes? Nut shells EU Coal, wood, straw Husks UK 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, straw Black & brown liquor EU Fuel oil, wood chip UCO UK None 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 At sea Renewable electricity UK Marginal electricity Minimal area Waste carbon gases EU None Natural gas

SLIDE 23

Potential price impacts of diversion to biofuels

23

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 impacts? Tall oil pitch EU Small rise Minimal 100% 100% Yes High Crude glycerine EU Small rise Limited 90% 10% Yes High 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 Sawdust & cutter shavings EU Small rise Minimal 100% Medium Yes High Animal fats (Cat I and II) UK Small rise Minimal 70% 100% Yes High Straw UK Flat Potentially limited (left on ground) 70-90% 5-10% Partially Medium-High 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 Bagasse Brazil Large rise Large (burning) 60% 80% Partially Medium Cobs US Small rise Large (left on ground) 50% Low Partially Medium Small round-wood UK Flat Medium (left un-harvested) 30% 0% Yes Medium UCO EU Large rise Medium (disposal) 10% 0% Yes Medium Empty palm fruit bunches SE Asia Large rise Large (burning) Low Low Partially Low Bark, branches, leaves EU Small fall Large (left on ground) 10% Low Partially Low 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 Micro-algae US New growth Large 0% NA Yes in future Low Macro-algae UK New growth Large 0% NA No Low Renewable electricity UK New growth Large 100% 100% Yes Low Animal manure UK Flat Large (spread) 15% 90% Minimal NA Sewage sludge UK Small rise Limited (spread) 90% 100% Minimal NA Palm oil mill effluent SE Asia Large rise Large (discharge) Low High No NA Black & brown liquor EU Rise Limited 100% 100% No NA Waste carbon gases EU Flat Medium (some mills flare/vent) 50% 100% No NA

SLIDE 24

Many Annex IX biofuel routes are capable of >80% GHG savings, and all >60%

24

Feedstock Fuel Region GHG emissions (gCO2e/MJ) Key sensitivities GHG saving Cost of saving (£/tCO2e) Black & brown liquor Bio-DME EU 1 Conversion step = 0 in RED 99% 159 Nut shells FT diesel EU 4 Conversion step = 0 in RED 95% 138 Bark, branches, leaves FT diesel EU 4 Conversion step = 0 in RED 95% 94 Saw dust & cutter shavings FT diesel EU 4 Conversion step = 0 in RED 95% 155 Short rotation coppice FT diesel UK 6 Yields, Conversion step = 0 in RED 93% 178 SRF/small round-wood FT diesel UK 6 Conversion step = 0 in RED 93% 157 Tall oil pitch HVO EU 9 H2 requirements and means of H2 production 90% 12 Renewable electricity Hydrogen UK 9 H2 compression and transport mode 89% 376 Empty palm fruit bunches FT diesel SE Asia 10 Transport distances/modes. Conversion = 0 in RED 88% 109 Grape marcs LC ethanol EU 11 Ammonia & lime inputs 87% 266 Husks LC ethanol EU 11 Ammonia & lime inputs 87% 196 Miscanthus LC ethanol UK 11 Cultivation (diesel), yields, ammonia & lime inputs 87% 107 Straw LC ethanol UK 11 Ammonia & lime inputs, enzymes made onsite 87% 104 Animal manure Bio-methane UK 13 Carbon intensity of electricity 84% 406 Sewage Sludge Bio-methane UK 13 Carbon intensity of electricity 84% 240 UCO FAME UK 15 Methanol input. Based on actual UK data 82% 96 Animal fats Cat I & II FAME UK 15 Methanol input. Based on actual UK data 82% 12 Cobs LC ethanol US 16 Ammonia & lime inputs, transport distances 81% 246 Corn Stover LC ethanol US 16 Ammonia & lime inputs, transport distances 81% 178 Bio-fraction of MSW Bio-methane UK 17 Carbon intensity of electricity 80% 120 Bio-fraction of C&I waste Bio-methane UK 17 Carbon intensity of electricity 80% 138 Wine lees 1G ethanol EU 20 Natural gas use for drying 76% 173 SRF/small round-wood LC ethanol US 20 Ammonia & lime inputs, transport distances/modes 76% 187 Bagasse LC ethanol Brazil 23 Ammonia & lime inputs, transport distances/modes 73% 86 Crude glycerine Methanol EU 25 Natural gas for cracking. Based on actual UK data 70% 331 Waste carbon gases Ethanol EU 25 Power and steam inputs to conversion process 70% 62 Macro-algae Bio-methane UK 17-34 Biomass yield & harvesting energy. Uncertain 60-80% 809 -1,085 Micro-algae FAME US 31-36 Energy input, oil yield & productivity. Uncertain 58-63% 786 - 859 Palm oil mill effluent Bio-methane SE Asia

SLIDE 25

Overview of key results for cross-comparison

25

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) Renewable electricity NA 17,316 26.4 55 New growth assumed (wind-farm, solar PV) Low 89% 376 Animal manure 1.3* 12,016 0.0* 39 Spreading to land (digestate) NA 84% 406 Straw 15 5,240 2.8-4.2 26-31 Soil (extract sust), animal feed (hay), bedding (wood) Med-High 81-87% 104-178 Small round-wood 12.3 3,282 2.6 31 Soil (extract sust), paper & panel (more wood) Medium 76-93% 187 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 2,390

• 5.9*

19 Landfill (none), H&P (nat gas, chip) Medium 80% 138 Bagasse 7.8 1,748 1.1 24 Burning (none), H&P (extract sust trash) Medium 73% 86 Black & brown liquor 12 1,714 9.3 32 H&P (HFO, chip) NA 99% 159 Bark, branches, leaves 12.4 1,376 3.1 26 Soil (extract sust) Low 95% 94 Husks 13 645 7.5 33 H&P (coal, wood, straw) High 87% 196 Sawdust & cutter shavings 15.2 614 4.4 31 H&P, bedding, paper, panel (all more wood, straw) High 95% 155 Waste carbon gases 6.2 511 6.7 23 Flare (none), H&P (nat gas) NA 70% 62 Sewage sludge 0.5* 301 0.0* 27 AD & incinerate (nat gas), spread (digestate) NA 84% 240 UCO 36 266 20.1 25 Household disposal (none) Medium 82% 96 Cobs 12.4 185 4.6 36 Soil (extract sust), animal feed (hay) Medium 81% 246 Empty palm fruit bunches 4.5 172 0.7 27 Burning (none), H&P (nat gas, chip), compost (fert) Low 88% 109 Palm oil mill effluent 0.8* 127 0.0* No import Open pond discharge (none) NA Animal fats (Cat I and II) 36 119 14.7 20 H&P (HFO, chip) High 82% 12 Nut shells 16.4 61 4.1 30 H&P (coal, wood, straw) High 95% 138 Short rotation coppice 12.3 47 4 33 New growth assumed (agric. land) Low 93% 178 Crude glycerine 14.2 42 17.9 38 Refining (fossil), H&P (HFO, chip), animal feed (sugar, corn) High 70% 331 Miscanthus 13.4 24 4 27 New growth assumed (agric. land) Low 87% 107 Grape marcs 7.8 20 9.4 38 Wine (more grape), compost (fert, peat, digestate) High 87% 266 Tall oil pitch 38 17 11.1 20 H&P (HFO, chip) High 90% 12 Wine lees 6.2 5.4 9.4 30 Wine (more grape), compost (fert, peat, digestate) High 76% 173 Macro-algae 2.0* 2.2 23.8* 62 New growth assumed (coastal seas) Low 60-80% 809 -1,085 Micro-algae 36 0.51 47.5 60 New growth assumed (barren land) Low 58-63% 786 - 859 Short rotation forestry 12.3 3.5 31 New growth assumed (land) Low 93% 157

SLIDE 26

| Strategic thinking in sustainable energy

Framework criteria

Which feedstocks justify additional support?

SLIDE 27

Analytical framework for decision making – a hierarchy of questions

27

• For a given material – if it is land using (not a waste/processing residue), has

the use of high biodiversity, high carbon stock or peat land been avoided?

• What are the key competing uses, and potential substitute resources?
• Would diversion to biofuels give a high risk of unacceptable carbon, cost, social or

environmental impacts – e.g. substitution by fossil fuels or use of more land? Or could productivity improvements release material?

• For new non-food crops, is there likely competition with food via ILUC?
• Are lifecycle GHG savings of producing biofuel from the feedstock high enough

(vs. a fossil comparator) to be supported? At least >60%?

• Would the biofuel route be economically viable without support? Or would

deployment only occur with support, due to the lack of commercial readiness

• f the conversion technology, infrastructure investments required or other

reasons? i.e. support is additional? How does the £/tCO2e saved compare?

SLIDE 28

Simplified decision tree (please see full version in report)

28

Yes

NO SUPPORT

No Yes No

NO SUPPORT

No No Yes

Not collected NO SUPPORT

No = processing residue

Competing uses What would otherwise happen to the material - if not used as a feedstock for biofuels production? Re-use, recycling or composting Landfill, open burn, discharged GHG emission savings Are the GHG savings associated with biofuel production (using most likely supply chain) above a desired threshold? Replacement options are high carbon, high cost, land using or

• ther determental impacts?

Used for energy , industrial & material applications

Yes

Additionality Would the biofuel route only be economically viable and commercially deployed with support? SUPPORT NOT NEEDED

Yes

SUPPORT JUSTIFIED Risk that growing the feedstock will cause ILUC via competition with food?

No Yes No = product/co-product

Is it a waste?

No Yes

Is it an agricultural, aquaculture, fisheries or forestry residue?

Yes

START

Is it a residue?

No

NO SUPPORT Can biofuel be made whilst providing the same services? e.g. dewatered AD digestate better than raw compost Used for food

• r animal

feed NO SUPPORT

No

NO SUPPORT Growing/collecting has unacceptable enviro. or social impacts?

Yes

NO SUPPORT From land with high biodiversity value, high carbon stockor peat land? Not grown

Yes

SLIDE 29

Many feedstocks meet the criteria, others partially (if uncollected or avoiding fossil substitution). Some too risky

29

Feedstock Classification ILUC food comp risk? Biodiverse, C stock, peat land? Competing uses? Indirect risks GHG savings Economic viability Additional support justified? Renewable electricity Product Minimal Unlikely a concern

• Excellent

Expensive Yes for new sites Animal manure Agric residue

• Unlikely a concern

Low Low Good Expensive Yes Bio-fraction of MSW Waste

• Medium

Nat gas (H&P), fert (compost) Good More costly Bio-fraction of C&I waste Waste

• Medium

Nat gas (H&P), fert (compost) Good More costly Micro-algae Product Negligible Unlikely a concern

• Threshold

Expensive Macro-algae Product Negligible Not a concern

• Threshold

Expensive Bark, branches, leaves Forest residue

• Avoid conversion

Low Low Excellent More costly Small round-wood Product

• Avoid conversion

Medium Low if more wood is sust. Good More costly UCO Process residue

• Low-Medium

Low Excellent Competitive Straw Agric residue

• Avoid conversion

Medium-High Hay (feed) Excellent More costly Cobs Agric residue

• Avoid conversion

Medium Hay (feed) Good More costly Empty palm fruit bunches Process residue

• Low

Low Excellent More costly Bagasse Process residue

• Medium

Low Good Competitive Waste carbon gases Process residue

• Low

Natural gas (H&P) Good Competitive Sewage sludge Waste

• High

Natural gas (H&P) Good More costly Black & brown liquor Process residue

• High

Fuel oil (H&P) Excellent More costly Tall oil pitch Process residue

• High

Fuel oil (H&P) Excellent Competitive Nut shells Process residue

• High

Coal (H&P) Excellent More costly Husks Process residue

• High

Coal (H&P) Excellent More costly Sawdust & cutter shavings Process residue

• High

Low if more wood is sust. Excellent More costly Animal fats (Cat I and II) Process residue

• High

Fuel oil (H&P) Excellent Competitive Miscanthus Product Yes Avoid conversion

• Excellent

More costly Short rotation coppice Product Yes Avoid conversion

• Excellent

More costly Short rotation forestry Product Yes Avoid conversion

• Excellent

More costly Grape marcs Process residue

• High

More grape needed Excellent Expensive Wine lees Process residue

• High

More grape needed Good More costly Crude glycerine Process residue

• High

Multiple (H&P, feed, indust) Good Expensive Likely too many risks Palm oil mill effluent Waste

• Low

Low Excellent Biogas unlikely to reach EU Bacteria Product? Low? Not a concern? ? ? ? Expensive? Unknown, too risky. Add in future? Only if the feedstock is replaced with a sustainable fuel (sectors remain decarbonised) Only if ILUC risk can be mitigated, i.e. through enforcement of land protection, yield increases Industry impact likely too high Yes for extracting sust. additional resource, no displacing animal feed Yes, depends on conversion tech and landfill tax Yes Yes for extracting sustainable additional resource Yes for under-utilised fraction

SLIDE 30

Conclusions and recommendations

30

• Many Annex IX feedstocks meet the criteria to justify additional support – or

could do so where only uncollected fractions are considered, significant productivity improvements are possible to release material, or when fossil fuel substitution can be avoided

• Novel conversion technologies using these feedstocks still need to be
• commercialised. Few routes are currently economically competitive, despite

attractive GHG savings on offer

• Ongoing European policy negotiations need to base the final Annex IX lists on

robust evidence, incorporating clear guidelines and definitions

• Hopefully, the risk screening approach in this study is a useful tool to help

move the debate in this direction, and support the deployment of low risk, sustainable biofuels

SLIDE 31

| Strategic thinking in sustainable energy

Thank you!

Richard.Taylor@e4tech.com

31