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Swedish Bioenergy Association. The Future of Bioenergy Markets in Europe. Gustav Melin 2011 Aug 17.

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swedish bioenergy association
Swedish Bioenergy Association

The FutureofBioenergy Markets in Europe

Gustav Melin2011 Aug 17


Swedish Bioenergy AssociationInterest organisation for companies and private personsAlmost 300 membercompaniesareproducers, users, manufacturingfirms, consultants and service companies etc.


To increase the useofbioenergy in an economically and environmentally optimal way.

efficient political instruments are
Efficientpolitical instruments are:
  • General, PPP – PolluterPaysPrinciple
    • Theywhoareresponsible for an emission shouldpay for polluting. Then the legislationsteertowardsless emissions and better actions and habits. Examplecarbondioxide tax, Sulphur tax, NOX-fees.
  • Long term
    • Support restricted in timegiveuncertain investment situations and promoteoftenwrongproducts and optimizationof subsidies.
  • Neutral totechniques
    • Mening that the most profitable solutions are chosen in competitionwithotherpossible solutions
  • Simple and logical
    • Easytounderstand and administrate

About AEBIOM European Biomass Association

  • Represents and promotes interests of bioenergy stakeholders
  • 30 national associations
  • About 80 associated companies
  • Activities: lobbying, workshops, newsletters, European projects, working groups, conferences and networking, etc.
  • Based in Brussels in the Renewable Energy House.
  • Member of EREC (European Renewable Energy Council) and WBA (World Bioenergy Association).

2011 Aebiom Statistical Report

Sent to members in June.

Available on Aebiom web site, www.aebiom.org.


Energy, bioenergy and other renewables

Energy in EU27

20,5 %




Gross inland consumption by fuel in the EU27 (Mtoe) 2009

  • Solid fuels: 268 Mtoe
  • Oil: 622 Mtoe
  • Natural gas: 417 Mtoe
  • Nuclear: 231 Mtoe
  • Renewables: 153 Mtoe

Source: Eurostat

Total grossinlandconsumption all fuels: 1702 Mtoe


Estimation of total contribution expected from bioenergy in EU27

Total contribution of bioenergy in 2020 in EU27: 138,5 Mtoe

Total contribution of bioenergy in 2010 in EU27: 83,8 Mtoe



Source: AEBIOM, based on NREAPs

Note: Bioenergy is considered as the gross final energy consumption, made up of the sum of bioelectricity, biomass for heat, bioheat and transport biofuels.


Shareofrenewableenergy in Sweden’senergyuse

Andelen förnybar energi i Sverige var år 2009, 45,3 procent. Det betyder att Sverige ligger långt före tidtabellen när det gäller att nå EU-målet på 50 procent förnybart 2020.

Underlag: Energimyndighetens kortsiktsprognos 15 mars 2010.

the swedish co2 tax basic design
TheSwedish CO2 tax, basic design
  • Introduced in 1991, graduallyincreased tax rate
  • Paid in relation to CO2 emissions on eachtypeof fossil fuel (carboncontent)
  • Full tax on heating and motor fuels
  • Reduced tax rate for industry, dueto risk for carbonleakage
  • ”Tax shift” – increasing CO2 tax and reducingdirectincometaxes
a simple and cheap system
A simple and cheap system
  • Low administrative costs for tax authorities and operators
    • A CO2 tax can easily be added to an existing energy tax system
    • Administrative costs for Swedish Tax Administration is 0.01 % of total revenues for energy and CO2 taxes
  • No need to measure actual CO2 emissions from each installation
    • Tax rates per unit (ton, litre) fuel based on basis of average carbon content
    • E.g.: CO2 tax for petrol = 2.323 kg/l x 0.103 €/kg = 0.24 €/litre
design to prevent carbon leakage in energy intensive industry
Design topreventcarbonleakage in energy-intensive industry
  • 1991
  • Twolevelsof taxation for heatingfuels – lowerlevel for industry
  • CO2 tax exemption for raw material use in industry
  • 2008
  • Second period EU ETS system – ETS covers major energy-intensive industry
  • Zero CO2 tax on ETS coveredindustry from 2011
  • CO2 tax raised for non ETS industry – in 2011 and in 2015 – upto 60 % ofregular CO2 tax
green tax shift regardless of colour of government
”Green Tax Shift” – regardlessofcolourofgovernment
  • 1990/91 ”the big tax reform”
  • Loweredincome and labortaxes – 6 billion €
  • CO2 tax and VAT on energy 0,3 + 1,6 billion €
  • Investment aid for biomassCHP
  • Green tax shift 2001 – 2006
  • 1,5 billion € tax shift, raisedenvironmentaltaxes, cut in incometaxes, focus on lowincomes
  • Policy 2007 – 2010
  • Increasedenvironmentaltaxes by 0,5 billion €
  • Loweredincometaxes by 7 billion €, focus on workingpeople
lessons learned about co 2 tax
Lessonslearnedabout CO2 tax…
  • A CO2 tax is easytoadminister and it gives results!
  • Households and companiesarefreetochoose the measures best for them – the tax uses the free market system and is ”tecnique neutral”.
  • Start at lowlevel and raise the tax gradually.
  • Announce tax measures long ahead, togivetime for adjustment.
  • Tax revenuescan be partlyusedto adress distributionalconsequences.
  • Support measuresmay be necessary for a limitedtime, tohelphouseholds and businesseswithadjustment.

Importantthat the system is long term stable!


Pellets production in EU27 in 2010 (kt)

Source: Pro Pellets Austria; Pelletsatlas, 2009; EPC

Total production in EU27 in 2010: 9.241 kt


Total consumption of pellets in EU27 in 2010 (kt)

Source: Pro Pellets Austria; Pelletsatlas, 2009

Total consumption in EU27 in 2010: 9.817 kt


Total consumption of pellets in EU27, 2005-2010 (kt)

Source: Pro Pellets Austria; Pelletsatlas, 2009


Replace oil almost half the cost

Burnersize 5 – 50 MWth


Last months approx. 0,69 € euro/$ USD

Crudeoil approx.107 USD/Barrel, Onebarrel is 1,7 MWh energy, thiscorrespondsto € 210 per tonnepellets (4,8 MWh). Price of pellets deliveredtoindustrycustomer in port €125 inland €150.


Challenges in the pellet sector

  • Estimated volumes of 40 Mt globally in 2020
  • How to secure a “reasonable” price before a large retrofit investment of a coal plant, or an investment in a pellet plant.
  • logistics, transport and storing capacity
  • CHP is needed to reduce cost for electricity production

Electricityproductionin Sweden 2010

56,2 per cent arecurrentlyrenewableelectricity in Sweden


Electricitycertificate system willgiveadditionalvolumes in Sweden

  • Current Bio powerproduction 12,6 TWh
  • Will increaseto 18 TWh in 2020
  • And increasewindpower from 3,5 to 10 TWh in 2020

Total standing volume of round wood in Swedish forest from 1924

1 Excl. high mountains, restricted military areas, urban land and water surfaces.

Millions cubic metre standing volume (stem volume over bark from stump to tip)

Source: National Board of Inventory


Forest area (million ha)

and growing stock volume (billion m3)

Source: Rautinen A. and al.


Global sources and sinks of carbon dioxide (CO2) 2008 (Billion tonnes C per year)

Fossils and cement 8,5

Deforestation 1,2

Forest growth -4,5

Sink in oceans -2,5

Residual 1,3

Accumulated in

atmosphere 3,7

Source: Corinne Le Quéré et al, Natures Geoscience 2009


Consumption of energy in transport in EU27 in 2020

This is the main problem not environmental problems that may appear if we do wrong when producing biofuels

90 per cent of fuels in transport sector is fossil in 2020!!!

Source: AEBIOM, based on NREAPs


Contribution of bioethanol and biodiesel in the transport sector in EU27

Source: AEBIOM, based on table 12 of NREAPs

our view on eu transport sector
Our view on EU transport sector
  • 90 % fossil dependence in the transport sector 2020 is to much.
  • Low blending is not enough for an energy shift, we need new fuels and vehicles.
  • 50 % renewable in the Swedish transport sector possible in 2030
  • Targets for green vehicles, should steer both towards energy efficiency and renewable fuels. tail pipe values are misleading.
  • Green innovation increases EUs competitive power on the global market.

Global trends –

How we see the world

  • Fossil fuels get more and more expensive and damaging
  • Biofuels get cheaper and cheaper and LCA improves.
  • There is enough land and biomass available for powerful expansion of both food and energy production. Demand must come to make production possible.
  • Biomass for energy can bring investments, work and wealth to rural areas and poor countries.

How to increase the speed of the energy shift in transport sector.

  • We need to find a solution for expanding European biofuel production, together with allowing imports of not only world market priced fossils but also low cost sustainable bioethanol and biodiesel.

Thank you for your attention

Gustav Melin, President Aebiom