New report: EU needs to prioritise domestic biomass for materials and chemicals – bioenergy reserved for “highly specialised niches”

A new study by consultancy Material Economics, published on Tuesday 29 June, is the first to model the EU’s 2050 demand for biomass feedstocks from all sectors and to compare this to a realistic biomass supply. The study finds stark divergences between demand and supply.

“Biomass is scarce and valuable, and it cannot meet all needs. Expectations for future use add up to 50–100% more than what we should count on being available, so there is massive value at stake in getting our priorities right for the limited feedstock we have. As our study shows, tomorrow’s high-value use of biomass will look very different from yesterday’s expectations, and both business leaders and policymakers will need to adjust”, says Partner Per Klevnäs of Material Economics.

Bioenergy use in the EU is increasing, having grown by 150% since 2000 in response to policy incentives. The use of biomass in power generation alone has increased fivefold, while the use of biofuels in transport has grown 25-fold.

Many scenarios foresee massive additional growth in biomass use, with some showing a 70–150% increase in biomass use for energy and materials by 2050. This would require an area the size of Germany (350–400 000 km2) to be dedicated to energy crops alone or additional ca. 340 million tonnes of forest wood per year, equalling 77% of the net annual growth of all of the EU’s forests.

Urgent need for a major course correction

The European Commission is currently reviewing the EU’s biomass policy – through the review of the Renewable Energy Directive, the Forest Strategy, the Sustainable Finance Directive and via the “Fit for 55” package.

In an effort to balance potentially available supplies of biomass with the highest-value sources of demand, Material Economics produced the new analysis in collaboration with the Energy Transitions Commission and European Forest Institute, funded by Climate-KIC, European Climate Foundation, the Finnish Innovation Fund Sitra and Vinnova.

The study finds that the optimal future for biomass use is highly targeted, prioritising the most valuable uses where the properties of biomass make it the greatest contributor to a net-zero economy; or where alternatives are likely to remain too expensive.

"The EU needs to have a serious look into the amount of biomass available and agree on what are the best ways to use it from the viewpoint of the economy and mitigation of climate crisis and biodiversity loss," says Project Director Janne Peljo of the Finnish Innovation Fund Sitra.

Improving technologies create a wide set of alternatives to biomass use

While biomass will continue to play a role in the EU’s transition to net-zero, it will become increasingly restricted to use in products (such as in furniture, construction, pulp, fibre, textiles and chemicals) with many traditional uses of bioenergy looking set to be outcompeted by new technologies – based on direct electrification and hydrogen.

Nonetheless, an important role is likely to remain for bioenergy in a number of highly specialised niches, the most valuable of which being in industrial heat, waste and carbon management services, and – potentially – for fuels used in aviation.

Overall, this is a major change in perspective. Many European countries have subsidised bulk power generation from wood and the build-up of a first-generation biofuels industry for passenger vehicles. But neither now looks likely to have any significant long-term role. The findings of this study suggest that the same logic may very well play out for other sectors.

In evaluating different future scenarios, this new study reveals a remarkable difference between transition pathways. A net-zero transition with lower and more targeted biomass use is feasible and cost effective when compared with current scenarios, with annual savings of €36 billion by 2050, 140–370 million tonnes less of CO2 emissions annually and a land area the size of Germany – 30 to 40 million hectares – that could be put to other uses.

Achieving this scenario depends on the effective deployment of alternatives to bioenergy across a wide range of applications, such as green hydrogen, synthetic fuels, power system flexibility and the availability of clean electricity. Resource efficiency and a circular economy also stand out as key factors to enable a high-value scenario, alongside technological development in alternatives to bioenergy.

More information:

Janne Peljo, Project Director, Climate and nature solutions, Sitra
+358 (294) 618 251, janne.peljo@sitra.fi

Per Klevnäs, Partner, Material Economics,
+46 72 182 79 72, per.klevnas@materialeconomics.com

Antti Koistinen, Specialist, Communication and Public Affairs, Sitra
+358 40 820 3184, antti.koistinen@sitra.fi