3

Summary

TheEuropeanUnionaimsatreducingitsgreenhousegasemissionsin2050by80‐95%inordertopreventclimatechange.InthisPolicyBrief,weanalysethepotentialroleofnegative‐emissionstechnologyinreducingtheseemissions.AprimeexampleofsuchatechnologyisthegasificationofbiomassinspeciallydesignedpowerplantsthatcaptureCO2andstoreitunderground(BiomassEnergywithCarbonCaptureandStorage,orBECCS).Weconcludethatthistypeoftechnologysubstantiallyreducesclimatepolicycosts.TotalcostsavingsfromredirectingbiomasstoBECCSinan80%reductionscenarioequalstoapproximately0.3trillion(300billion)euros,whileina95%reductiontotalcostsavingsincreasetoasmuchas7.7trillion(7700billion)euros.DependingontheEU'sclimateambitions,totalsavingspercapitaarebetween500and15000euros.Surprisingly,redirectingbiomasstoBECCSdecreasestheglobaldemandforbiomass.ThereasonisthattheuseofBECCSincreasestheEU'scarbonbudget.ThisenablesEU‐countriestousemorefossilenergywithouthavingtojeopardisetheoverallemissionreductiontargets.This,inturn,lowersthepriceofenergyintheEU,whichresultsinlowerdemandforbiomassandassociatedland‐userequirements.Thus,italsoalleviatespressuresonfoodproductionandforests.TheincreaseduseoffossilfuelsmeansthatthereductionintheEU'sairpollutionislesssubstantial.However,bytakingadditionalandrelativelycheapmeasures,suchasselectivecatalyticreduction,theEUmemberstatescaneasilyundotheseunfavourableimpactsontheirairquality.Noticethat,concernsregardingthesafetyofCO2storagecanbealleviatedbysimplyprohibitingonshorestorageofCO2.RedirectingbiomasstoBECCSisalsoattractivefromaneconomicperspective.Thisalsoholdswhenaccountingfortheextramitigationcoststomaintainairquality.Becauseoftheextracarbonbudget,moreCO2canbeemittedinthenon‐electricitysectorswithouthavingtojeopardisetheoverallemissionreductiontargetsfor2050.Andalthoughelectricdrivingandzero‐energyhomeshavepositiveeffectsintermsofbothclimateandairquality,wefindthattheirlarge‐scaleapplicationbefore2050ismuchmoreexpensivefromasocietalpointofview.However,inordertoactuallyreduceclimate‐policycosts,theEUneedstorectifyaflawinitsEmissionsTradingSystem(ETS),asinthecurrentsystem,firmsarenotrewardedfortheirinvestmentsinnegative‐emissionstechnology.Acorrectionofthisflawisneededtore‐establishthelevel‐playingfieldbetweenallemission‐reducingtechnologies.But,evenifthisflawweretobecorrected,firmswouldstillfaceinsufficientincentivestoinvestinBECCS.TheissueisthatBECCSchangestheefficientdistributionoftheEU’scarbonbudgetbetweentheETSandthenon‐ETSsector.Morespecifically,thenon‐ETScarbonbudgetneedstobeincreasedattheexpenseoftheETScarbonbudgetinordertoestablish

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uniformCO2pricingacrosstheeconomy.OnlythenwilltheEUbeabletoreduceclimate‐relatedcostsby0.3to7.7trillion(300to7700billion)euros.

1 Introduction

AttheUNclimatechangeconferenceinParisin2015,worldleadersreconfirmedthattheincreaseofglobalmeantemperatureshouldbelimitedto2C.Inordertoachievethisambition,globalgreenhousegasemissionsneedtodeclineby2050by40‐70%,comparedto2010levels.1Well‐knownemissionreductionmeasuresincludetheuseofwindturbinesandsolarcells(photovoltaicsystems)inpowergeneration,energysavingstechnologiesandelectrificationoftransport.Biomassisalsoexpectedtoplayanimportantroleinreducinggreenhousegasemissions.Biomassisalreadyanimportantsourceofenergy.Onthegloballevel,withashareof10%,itisthefourthmostimportantsourceafteroil,coalandnaturalgas.Thissharerepresentsatotalof50ExaJoules(EJ),2andincludesenormousdiversityinuse.Indevelopingcountries,biomassismainlyusedfordomesticheating,lightingandcooking.In2008,thistraditionaluseofbiomass,mainlyintheformofwood,strawandmanure,comprisedaround80%ofits’totalglobaluse.Theremaining20%ismadeupofmoreindustrialandmodernusesofbiomass.Modernusestypicallyinvolveconversiontomakethecombustionprocessmoreefficient.Examplesincludecarsrunningonbiodieselfromrapeseedandheatingusingbiogasfrommanureandwaste.Globaldemandforbiomassisexpectedtoincreaseduetoclimatepolicy,becauseinmanycasesitistheonlyavailablezero‐carbonoption.Aeroplanescanflyonbiofuel,butbecauseofbatteryweight,notonelectricity.Batteryweightalsolimitstheuseofelectricityasafuelinheavytransport.Furthermore,biomassistheprimaryzero‐carbonsubstituteforoilinthechemicalindustry.Intotal,projectionsofannualbiomassdemandfor2050varyfrom70to190EJ,andmayevenbeashighas300EJ.1TheEuropeanUnion(EU)alsoexpectsclimatepolicytoinduceagreateruseofbiomass.Forexample,initsImpactAssessmentinsupportofitsEnergyRoadmap2050,theEuropeanCommission(EC)projectsthetotaluseofbiomassinEuropetoincreasefrom5EJin2010toaround11EJby2050.3Notably,theECalsopredictsathreefoldincreaseintheuseofbiofuel,overthesametimeframe.ThelargeincreaseinbiomassdemandinEuropeandotherpartsoftheworldraisesquestionsabouthowmuchbiomasstheplanetcouldproducewithoutjeopardisingfoodproduction.Anadditionalriskisthatbiomassproductionmayinducefurtherdeforestation.Although,estimatesofthesustainablebiomasspotentialareuncertain,for2050a

1 IPCC (2011). 2 See IPCC (2011). 1 exajoule = 1000 petajoule = 1018 joule. In comparison, primary energy use in the Netherlands in 2014 was 3.2 EJ. In the EU 28 this was over 67 EJ (Source: Eurostat). 3 EC (2011).

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sustainableproductionof150EJseemstobefeasible.4Atthisproductionleveltheconsequencesforbothfoodsupplyandforestswillbelimited.

4 IPCC (2011) and PBL (2012).

Negative emission technology

CO2 capture and storage (CCS) can be applied in all installations that generate electricity using coal, natural gas or biomass. Using this technology, a net CO2 emission level of close to zero can be achieved, as emissions no longer enter the atmosphere. Moreover, if power plants use biomass instead of coal or natural gas, the net CO2 emissions over the entire chain will even be negative – as the entire chain, from biomass production to its conversion and subsequent storage of CO2, extracts carbon from the atmosphere. Biomass (trees and plants) takes up CO2 during the growth process and storage prevents this CO2 from re-entering the atmosphere during the combustion or gasification of biomass. In this policy brief we will use the acronym BECCS to denote a power plant that produces electricity through the gasification of biomass and subsequently captures and stores the CO2.

A biomass power plant with carbon capture and storage

Empty gas field

Gasification of biomass

CO₂ capture

CO₂ from the air

CO₂ transport (pipeline)

Per pipeline to empty gas fields in the North Sea

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Becauseofthelimitedavailabilityofsustainablebiomass,consensushasemergedoverrecentyearsontheprincipleof‘cascading’.Theideabehindthisprincipleisthatlow‐valueapplicationsofbiomasswillonlybeconsideredafterallpossibilitiesforhigh‐valueapplicationshavebeenexhausted.Unfortunately,thereseemstobenocleardefinitionofwhatwouldconstituteeitherlow‐orhigh‐valueapplicationofbiomass.

Forexample,inalettertotheDutchHouseofRepresentatives,theDutchCabinetarguesthatitisimpossibletodraftaframeworkforassessingthepreferreduseofbiomass.5Nonetheless,theSocialandEconomicCounciloftheNetherlands(SER)advisesthatbiomassbereservedforactivitiesforwhichtherearenotechnicalalternatives,suchasinaviationandshipping.6TheRoyalNetherlandsAcademyofArtsandSciences(KNAW),initsvisiondocument,callsforzerobiomassuseinenergysupply,unlessitoriginatesfromwaste.Thispolicybriefinvestigateswhatwouldconstitutehigh‐valueapplicationsofbiomassfromawelfareperspective,thepossiblebottlenecksofcurrentregulationhamperingthesehigh‐valueapplications,aswellashowlargetheadvantagewouldbeofremovingthosebottlenecks.Specifically,ifEuropeweretoapplybiomassinpowerplants,wouldtheadvantagesofdoingsooutweighthedisadvantages?Andwhatshouldbethepreferredtypeofpowerplant?Shouldthatbethecurrentsystemofco‐firingbiomassincoal‐firedpowerplants,orwoulditbebettertodesignandbuildbiomass‐onlypowerplants?And,finally,shouldallthosepowerplantsuseCCStechnology,thuscreatingthepossibilityofnegativeemissions(seeBox“Negativeemissiontechnology”)?Theanswersthatweprovidetothesequestionsinthispolicybriefcontributetothediscussiononbiomasscascading.Inadditiontothedirecteconomiceffects,ouranalysisalsoconsiderspossiblenegativeimpactsontheavailabilityofresourcesforthechemicalindustry,theuseoffossilfuels,deforestationandfoodproduction.

2 Invest in biomass-fired power plants with carbon storage

Whatconstituteshigh‐valueapplicationsofbiomass,iftheEUisaimingforan80%reductioninitsgreenhousegasemissionsby2050,comparedto1990levels?Inordertoobtainmoreinsightintothisissue,weconductthefollowingthoughtexperiment(Figure1).First,supposethatallEuropeangrownbiomassgoestothechemicalandtransportsectors.Thus,thereisnoBECCS.Subsequently,reducetheapplicationofbiomassinthechemicalandtransportsectorsandusethisamountofbiomasstoproduceelectricitywithBECCS.Overall,

5 The Dutch House of Representatives (2014). 6 SER (2010). See also: RLI (2015) and Greenpeace International, GWEC & EREC (2013).

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weusenomorebiomass,weonlychangethewayitisused.Forsimplicity,wealsoassumenoimportofbiomassintotheEU,butallowinter‐EUtradeofbiomass.Forourthoughtexperiment,wekeeptheexistingemissionreductiontargets.BecauseCO2storagefrombiomassleadstoareductioninemissions,thiscreatespossibilitiesforanincreaseinemissionselsewhereintheeconomy.Inourthoughtexperiment,thereducedamountwillbefullyutilisedelsewhere.7Subsequently,wedeterminewhetherornottheEU’stotalmitigationcostsdecreaseduetotheapplicationofBECCS.8Aslongastotalcostsdecrease,wecontinuetoincreasetheamountofbiomassusedinBECCS.Weendourthoughtexperimentwhenmitigationcostsnolongerdecrease.Finally,wecomparetheEU'smitigationcostsoverthe2015–2050periodinasituationwithandwithouttheuseofBECCS.9Wehaveconductedthisthoughtexperimentnotonlyforthe80%emissionreductiontargetfor2050,butalsoforreductionsof85%,90%and95%.Figure 1 The thought experiment and the total costs of emission reduction, over the 2015–2050

period (in trillion euros)

Figure1showsthatthetotalemissionreductioncostsforan80%targetwillbeequalto2.1trillion(2100billion)eurosinasituationwithoutBECCS.10ApplyingBECCSwouldreducethosecoststo1.8trillion(1800billion)euros.Theresultingcostsavingof0.3trillion(300billion)euroscanbeattributedBECCS’negativeemissions,asrelativelyexpensiveemissionreductionmeasuresinothersectorsareneededless.

7 All calculations were conducted using the MERGE-CPB general equilibrium model. See Bollen (2016) for an extensive description of the model and the analyses conducted. 8 Total emission reduction costs include all relevant costs incurred in Europe. This, for example, includes the (additional) costs of renewable energy technology, the costs of energy saving and (additional) fuel costs. 9 Unless stated otherwise, all costs over the years from 2015 to 2050 are expressed in 2015 prices using the appropriate discount rate. 10 This is 0.24% of the net present value of GDP from 2015 to 2050.

BECCS

Negative emissions

Current situation:biomass is usedfor transport andpetrochemicalindustry

Are costs going down?

Yes

No

Thought experiment:What happens if we shiftsome biomass to BECCS?

80% 85% 90% 95%

EU GHG reduction target for 2050

trillion euro

Total cost of emission reduction over the period 2015-2050

no BECCSBECCS

Carbon budget increases fewer expensive measures needed

0

2

4

6

8

10

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ForBECCS,thecostsofreducing1tonneofCO2areabout115euros.TheuseofBECCSmeansthatthereisnoneedformoreexpensiveCO2reductionmeasureselsewhereintheeconomy.Thosemeasurestypicallycostbetween115and340eurospertonneofCO2.Thetotalcostadvantagethuscreatedequalsthe0.3trillion(300billion)eurosmentionedabove.IftheEUwishestobemoreambitiousandwantstoreduceemissionsby85%ormore,thismeansmoreandusuallymoreexpensivemeasuresmustbetakentomeetthosemorestringenttargets.WithoutBECCS,increasingthereductiontargetfrom80%to95%willincreasetheemissionreductioncostsfrom2.1to10.0trillion(from2100to10,000billion)euros(Figure1)‐acostincreaseofasmuchas7.9trillion(7900billion)euros.11However,withBECCScostswillonlyincreasefrom1.8to2.3trillion(from1800to2300billion)euros–acostincreaseof‘only’0.5trillion(500billion)euros.TheadvantageofBECCSisthereforemuchgreaterformoreambitioustargets,becausethosetargetsrequirealargernumberofmeasuresandmoreexpensivemeasures.ThosemoreexpensivemeasuresmaketheuseofBECCSevenmoreattractive.Afterall,theuseofthesetypesofpowerplantswillremovetheneedforthemostexpensivemeasures,suchaselectricdrivingandenergy‐neutralhousing,whichwillbenecessarytomeetthetargetsof85%ormore.12Figure 2 Optimal investments in BECCS, under various reduction targets for 2050

11 This is 1.3% of the net present value of GDP from 2015 to 2050. 12An increase in the use of biomass does not explain the larger cost advantage under more ambitious reduction targets, because in all variants – reduction targets from 80% to 95% – the use of biomass remains at 9.6 EJ.

0

50

100

150

2020 2030 2040 2050

increase for -95%

increase for -90%

increase for -85%

increase for -80%

capacity in GW

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InordertorealisetheadvantagesofBECCS,itisimportantthatinvestmentsinthesepowerplantsstartassoonaspossible(Figure2).A2050emissionreductiontargetof80%requiresaEuropean‐wideproductioncapacityofcloseto10GW13by2020andnearly50GWby2030.Andforatargetof95%,thiswouldbe25and85GW,respectively.By2050,theoptimalcapacityisapproximately120GW,implyingthatBECCSsuppliesaround12%ofallelectricitywithinEurope.ImmediateinvestmentsinBECCSareneeded,becausetheaccompanyinginfrastructurerequirestimetobuild.This,forexample,concernsthelocalsupplyofbiomass,thetimerequiredtoobtainpermits,plantconstructiontime,developmentoflocalexpertise,andtheinfrastructurefortheCO2storageitself.IfthefirstsubstantialinvestmentsinBECCSdonottakeplacebefore2020,itscapacitylevelsin2050willbeinsufficienttorealisetheabove‐mentionedcostsavings.14Wewouldliketostressthatthesefiguresarenotbasedonrandomassumptionsaboutthecostsofexpensivemeasures,suchaselectricvehiclesandenergy‐neutralhousing.TheapplicationofBECCSbecomesinterestingassoonasthe2050carbonpriceexceeds115eurospertonne.For2050,thisisnotanunreasonablyhighprice.Forexample,theEC’sImpactAssessmentassumestheCO2pricewithoutBECCSwillbebetween265and350eurospertonne,by2050.15AtthosepricelevelsitwouldbeveryprofitabletoinvestinBECCS.TheImpactAssessment,moreover,alsoassumesareductiontargetfor2050ofonly80%.Moreambitioustargetswouldresultinhighercarbonpricesand,thus,inevengreaterBECCS‐relatedcostsavings.

3 Reform the EU Emissions Trading System

AlthoughtheeconomicbenefitsofBECCSarelarge,theincentivestoinvestinBECCSwillbenegligiblebecausecurrentregulationsonCO2storagearedistortingthemarket.Inaddition,thecarbonpriceisstilltoolowbecausetheETScontainstoomanyemissionallowances.BECCS,inparticular,isdisadvantagedbythissituation(seeBox“Nobusinesscaseorlackinggovernmentpolicy?”).WithintheEU,theETSdirectivedeterminestheboundariesforcarboncaptureandstorage(CCS).16TheuseoffossilfuelsreleasesCO2.However,ifacompanycapturesandstoresthisCO2,thiscompanydoesnothavetohandinanyemissionallowances.Therefore,thisprovidesthemtheincentivetodopreciselythat(seeFigure3).

13 Assuming a 50% load factor, a 1 GW power plant is able to produce electricity for about 1 million households. 14 The same argument also applies to investments in other new technologies, such as wind and solar energy. 15 See Table 37 in EC (2011). The CO2 prices in that table have been converted into 2015 prices by using the HCIP inflation index. 16 See European Parliament and Council (2003). In addition to the ETS directive, the CCS directive sets the technical framework for CO2 storage (European Parliament and Council, 2009).

10

Figure 3 Number of emission allowances earned by a power plant

Unfortunately,thisemission‐tradeexemptiondoesnotprovideincentivesforBECCStocaptureandstoreCO2,astheuseofbiomass,incontrasttothatoffossilfuel,isalreadyexemptfromtheemissiontrade.Anadditionalexemptionontopofthefirstexemptionwillnotprovideanyfurtherincentive(seeFigure3).

Exemption fails to provide incentives to BECCS.

Owners of power plants receive an emissionallowance if they store one tonne of CO₂.

exemptionOwners of power plants do not have to hand over an

emission allowance if they store one tonne of CO₂. 1

1 1

0

BECCS

reimbursement

Coal-fired power plant with carbon capture and storage

Number of rights to be receivedin case of one tonne of CO₂ storage

No business case or lacking government policy?

If BECCS is so profitable, then why are investors – who are so eager to invest in wind turbines, solar cells and electric vehicles – not standing in line to invest in this particular technology? A number of reasons come to mind. The first reason is that new carbon-free technologies, such as BECCS, may take several decades before they become privately profitable. This is not unique to BECCS. Offshore wind, solar power and electric vehicles have all been privately unprofitable for many years now and none of them is expected to become privately profitable in the coming decade., This means that investors in new carbon-free technologies need government support, in order to bridge these non-profitable years and to be able to invest in their development (CPB/PBL/SCP, 2014). Therefore, governments have set up incentive programmes for many of those technologies. In the Netherlands, this concerns the SDE+ programme (for renewable energy), and the tax exemptions of the electricity tax (for solar PV), and of the BPM and MRB (for electric vehicles). In the Netherlands BECCS is, in principle, eligible for support under the SDE+ programme, but the level of support is insufficient to effectively stimulate investment. Under the SDE+ programme, reimbursements depend on the difference between the cost of renewable and fossil energy. However, the SDE+ programme does not reimburse the costs associated with CO2 capture and storage (CCS). That incentive, theoretically, should be delivered by the Emissions Trading System. But because of the double exemption issue in the ETS directive and the too low carbon prices, the system is wholly ineffective in providing such incentives for BECCS. Therefore, the main reason why investors have shown no interest in BECCS is that proper government support is lacking.

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ReplacingthecurrentexemptionundertheETSdirectivewithareimbursementofanemissionallowancewouldcreatealevelplayingfieldforBECCS.Thiswouldmeanthatcompanies‘pay’withanemissionallowancewhentheyemitCO2fromfossilfuelsandthisallowanceisreturnedtothemifandwhentheycaptureandstorethisCO2.OwnersofBECCSwillnotneedtohandoveranyemissionallowanceswhentheyproduceelectricityfrombiomass,buttheywouldreceiveafreeemissionallowanceforeverytonneofCO2thattheystorebelowground.Thiswouldcreatetheincentiveforinvestmentinthistypeofpowerplant(seeFigure3).If,asaresultofthisincentive,companieswouldreallyinvestinBECCS,thenumberofemissionallowanceswouldincrease,butthatwouldnotchangetheamountofCO2thatisemittedintotheatmosphere.Afterall,althoughtheissuanceofadditionalallowanceswouldleadtoadditionalCO2emissions,BECCSfirsthadtoextractthisCO2fromtheatmosphere.Thus,onbalance,noadditionalCO2wouldentertheatmosphere.However,evenafteradjustmentoftheETSdirective,powercompaniesstillhavelittleincentivetoinvestinBECCS,sincetheadvantageofsuchplantsisthattheymakeexpensivemeasureselsewhereintheeconomyunnecessary.Mostofthoseexpensivemeasures,suchaselectricdrivingandenergy‐neutralhousing,donotfallundertheregimeoftheEmissionsTradingSystem.Therefore,althoughownersofBECCScouldselltheiremissionallowancestoothercompaniesfallingundertheETS,theycouldnotsellthemtohomeownersormotorists.17Thismeansthatthepricetheywouldreceivefortheiremissionallowancesismuchlower.Afterall,assumingan80%emissionreductiontargetfor2050,sellinganemissionallowancetofirmscurrentlywithintheETSwouldyieldonly115eurospertonneofCO2,whereasincludingactivitiescurrentlyoutsidetheETS,thesametonnewouldfetchasmuchas340euros.18AtaCO2priceof115eurospertonne,investmentsinBECCSwillbeatleast80%belowtheirefficientlevel.Thereare,however,variouswaystoenableownersofBECCStoselltheiremissionallowancesfor340eurospertonne.ThemostobviousoneisexpandingtheEmissionsTradingSystemtoallsectors,includingsmallbusinessesandhouseholds.Thiscouldbedonedirectly,byallowingsmallbusinessesandhouseholdstotradeinemissionallowancesthemselves,orindirectlybyexpandingtheETStoalsoincludesuppliersofenergy,suchasdistributioncompaniesandrefineries.19

17 Owners of a BECCS power plant cannot sell their emission allowances to either the natural gas supplier of homeowners or to the fuel supplier of motorists, as these companies are not included in the Emissions Trading System (ETS). 18 These prices were calculated using the MERGE-CPB model. The number of emission allowances in the Emissions Trading System are assumed to decrease after 2021, linearly by 2.2% per year (EC, 2014). The number of allotted emission allowances does not decrease for aviation. For more details, see Bollen (2016). 19 Currently, process emissions from refineries are included into the Emissions Trading System. However, the CO2 encapsulated into their end-products (gasoline, diesel, etc.) is not.

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AnotheroptionwouldbetotransferemissionallowancesfromETSsectorstonon‐ETSsectors.AlltheseoptionswouldmakeclimatepolicywithintheEuropeanUnionefficient,asthemarginalcostofemissionreductionsinandoutsidetheETSwouldequal.

4 Other effects are limited

Above,wedemonstratedthatfromaneconomicpointofviewtheuseofBECCShasgreatadvantages.Asaresult,biomassdemandmightincreasesubstantiallyinordertosupplyBECCS.Thismight,inturn,increaseimportsofbiomassintoEurope,thusrestrictingtheavailabilityoflandforfoodproductionoutsideEurope.Poorercountriesmaybeparticularlyaffected,andtheincreaseinthedemandforbiomassmayalsoleadtofurtherdeforestation.20AnotherdownsideofBECCSisthatitmaydecreasetheamountofbiomassavailableforthechemicalindustry.Furthermore,thenegativeemissionsfromBECCSwilldecreasetheneedtoreducetheuseoffossilfuels,whichwillhaveanegativeimpactonairquality.Finally,thereissomeresistancewithinsocietytostoringCO2undergroundduetosafetyissues.21IftheapplicationofbiomassinpowerplantsweretoincreasetheundergroundstorageofCO2,thismayaffectpublicsafety.Thissectiondescribeshowthesepotentialdownsidesareeithernon‐existentorcouldbeeasilyovercome.No negative effects on food production and deforestation

Oneofthemainconcernsregardingtheuseofbiomassrelatestofoodsupply.Therefore,westudiedtheimpactthattheuseofBECCSmighthaveonglobalbiomassdemand.Figure 4 Global biomass production 2050, with and without EU import restrictions

20 See the Dutch Sustainable Biomass Commission (2015), Dutch House of Representatives (2014). 21 https://www.rijksoverheid.nl/actueel/nieuws/2010/11/04/co2-opslagproject-barendrecht-van-de-baan.

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80% 85% 90% 95%

without import

with import

EJ

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WithoutBECCS,theEUwillusearound9.6EJofbiomassby2050.22IftheEUallowsBECCS,thetotalimportofbiomasswillbearound0.8EJunderan80%reductiontargetand7.6EJundera95%target.Dependingontherequiredtarget,thiswouldbringtotalbiomassuseby2050to10.4EJand17.2EJ,respectively.Rathersurprisingly,biomassimportintotheEUwouldcauseglobaldemandforbiomasstodecrease,insteadofincrease(Figure4).23ThereasonisthatthedemandforbiomassinBECCSmakesenergylessscarce,becauseitincreasesthecarbonbudget.Ontheonehand,thedemandforbiomassincreasesbecauseofBECCS.Butontheotherhand,theincreaseofthecarbonbudgetallowsformorefossilenergyuse,whichinturnlowersthedemandforrenewableenergy,andthusalsoforbiomass.Thenetimpactisadeclineinthedemandforbiomass.Figure 5 The effect of 1 EJ biomass on the supply of energy with and without BECCS when CO2

emissions are kept constant

22 If the EU does not allow biomass-imports, then land-use patterns in Asia, Africa and South America are unaffected. 23 Even if, on a global level, there would only be 100 EJ instead of 150 EJ available in sustainable biomass, the pressure on agricultural land would be reduced through the application of biomass in CCS power plants.

0,7-1,1

0,5

the increase in available energy when1EJ of biomass is used in BECCS

1,0-1,4

0,3

1 EJ biomass

1 EJ biomass

available energyusing BECCS

available energywithout using

BECCS

0,5-0,9 EJdifference

electricity (EJ)

0,5available energy (EJ)

available energy (EJ)

+

+

carbon budget increaseswith 0.9 bln tonne CO₂

fossil fuels (EJ)

biofuel (EJ)

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Roughlyspeaking,theuseof1EJofunconvertedbiomassinaBECCSpowerplantresultsinaround0.3EJofelectricity(Figure5).Additionally,thestorageof0.9billiontonnesofCO2allowstheuseoffossilfuelsandresourcesinthepetrochemicalindustrytoincreaseby0.7to1.1EJ,respectively.24Thus,intotal,using1EJofbiomassinBECCSpowerplants,resultsin1.0to1.4EJofenergy.Incontrast,withoutBECCS,theuseof1EJofunconvertedbiomassprovidesabout0.5EJofbiofuelorresourcesforthepetrochemicalindustry.Thus,theuseofBECCSresultsinanetenergygainofaround0.5to0.8EJ.Furthermore,theincreaseduseoffossilenergy,willnotleadtohigherCO2emissionssincetheincreasedemissionsfromfossilenergyarecounterbalancedbylower(negative)emissionsfrombiomass.Onbalance,thiswouldmakeCO2emissionlevelsmoreorlessconstant,by2050.25

No negative effect on the petrochemical industry

TheincreasedavailabilityoffossilenergyalsomeansthattheuseofBECCSwillnotleadtoshortagesinhigh‐valueresourcesandfuelsinthepetrochemical,aviationandheavytransportindustries.Quitethecontrary,itwouldalleviatesuchshortages.Complying with air quality standards

AdisadvantageofBECCSisthatairpollutionincreasesasaresultoftheadditionaluseoffossilenergy.Thus,withoutBECCS,theaverageexposureofhumanstoparticulatematterinEuropewoulddeclinebyapproximately60%by2050underan80%emissionreductiontargetandby70%undera95%emissionreductiontarget.26WithBECCS,thisdecreaseislimitedtoabout50%.Thiswouldmeanthattheairqualityin2050wouldnotcomplywiththeEUairqualitystandardfor2030.27However,theEUcanquiteeasilycomplywiththe2030airqualitystandardsbytakingadditionalmeasures.28Thecostsofsuchmeasureswouldbelessthan1%oftheincreaseinwelfarecreatedbyusingBECCS.Therefore,usingbiomassinthiswayremainsaveryattractiveoption,alsofromasocietalperspective.

24 Indirect emissions released during the production of fossil fuel strongly determine the additional amount of fossil fuel that can be used on the basis of additional emission allowances. Unconventional oil (e.g. shale oil, tar sands and gas to liquids) and synthetic oil (e.g. gas to liquids and coal to liquids) have more indirect emissions than the currently more common light crude oil (Brandt and Farell, 2007). A certain amount of these indirect emissions, however, could be captured by using CCS technology during the production process. 25 Using BECCS slightly increases the CO2 emissions by 2050. Note that emission levels in any particular year might deviate from that year’s target, due to either banking or borrowing of emission allowances. 26 This is the average exposure of the total EU population over an entire year, in both rural and urban areas. It is lower than the measured concentration levels in so-called hotspot areas. In 2010, this average exposure equalled 10 μg/m3. The 2030 EU target equals approximately 4 μg/m3. For further details, see Bollen (2016). 27 For 2030 onwards, EU policy is assumed to limit the average exposure to particulate matter to around 4 μg/m3, due to the national emission ceilings for SO2 (sulphur), NOx (nitrogen), NH3 (ammonia), and PM2.5 (particular matter). 28 This, among other things, concerns end-of-pipe measures, such as filters, but also shifts in the use of fossil energy.

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Public safety

AfinalobjectionagainstusingBECCSconcernsthesafetyofCO2storage.29PossiblythesimplestwayofaccommodatingthoseconcernsistoprohibitCO2storageonland.ThiswouldnotaffecttheuseofBECCS,asitremainsextremelyprofitable,bothfromaprivateandsocietalperspective.Moreover,mostofEurope’sstoragecapacityisoffshore.

Literature

Bollen,J.,2016,BiomassEnergywithCarbonCaptureandStoragecanreduceEU’sEnergyRoadmapcostswith15‐75%,CPBBackgroundDocument(link),forthcoming.

Brandt,A.R.andA.E.Farell,2007,ScrapingtheBottomoftheBarrel:GreenhouseGasEmissionConsequencesofaTransitiontoLow‐QualityandSyntheticPetroleumResources,ClimaticChange,84,241–263.

CPB/PBL,2015,CahierKlimaatenEnergie[dossieronClimateandEnergy],ToekomstverkenningWelvaartenLeefomgeving[Outlookonwelfareandthehumanenvironment(inDutch)],(link).

CPB/PBL/SCP,2014,MonitorDuurzaamNederland2014:Verkenning.UitdagingenvoorAdaptiefEnergie‐Innovatiebeleid[SustainabilityMonitorfortheNetherlands2014:Outlook.Challengesforadaptiveenergyinnovationpolicy(inDutch)],CPBBook13,(link).

Directive2003/87/ECoftheEuropeanParliamentandoftheCouncilof13October2003establishingaschemeforgreenhousegasemissionallowancetradingwithintheCommunityandamendingCouncilDirective96/61/EC.

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29 Survey results, incidentally, indicate that the Dutch are far more positive about storing CO2 from biomass than from fossil fuel (Mastop et al., 2014).

16

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