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Forestry Program Biofuels From Oil to Alcohol Addiction? Sten Nilsson IIASA, Laxenburg, Austria EUROFORENET Conference, Brussels, 20 November 2007.

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Presentation on theme: "Forestry Program Biofuels From Oil to Alcohol Addiction? Sten Nilsson IIASA, Laxenburg, Austria EUROFORENET Conference, Brussels, 20 November 2007."— Presentation transcript:

1 Forestry Program Biofuels From Oil to Alcohol Addiction? Sten Nilsson IIASA, Laxenburg, Austria EUROFORENET Conference, Brussels, 20 November 2007

2 Forestry Program Solar Energy Based on the efficiency of biological collection of solar energy: 4000 m 2 of land/person is required for replacement of fossil fuels and nuclear energy in the present world energy system (2080 w/person) 250–700g water is needed for the photosynthesis of 1g of dry biomass Constraints by available land, water, etc. Source: Burkhardt (2006)

3 Forestry Program Bio Resources All of the products are expected to have future increased demandwith increased demand competition is increasing Convergence of the markets over time for the products above. Bio raw material will be priced on its energy content Competition of Resources Food Production Forest Industrial Production Chemical Industry Heat Electricity Biofuels

4 Forestry Program Underlying Forces for Convergence Economic security (i.e., rising real price of oil) Environmental security (i.e., climate change) National Security (i.e., dependence on Middle East/Russia) Political security (i.e., support for rural development and rural votes) Concerns related to:

5 Forestry Program Global Agriculture Production of Biomass (in billion ton BMQ) 1992/19942030 Available for Energy Production in 2030 Grain2.252.80–3.00 Vegetable Oil Production 120 million tons of oil25050 million tons Agriculture Residues 3.354.20–4.451.30–1.40 Manure2.503.10–3.600.85–1.00 Food rests, etc.1.101.95–1.951.10–1.10 9.2012.05–13.003.25–3.50 25–30% Source: Modified from Berndes, et al. (2007)

6 Forestry Program Forest Biomass Source: FAO (2006) 435 billion tons of above-ground biomass Available for utilization: 5–7 billion tons Forest Other Wooded Land Other Land Water

7 Forestry Program Examples of Conversations of Different Types of Biomass to Different Energy Carriers Ligno cellulose plants, dry (wood from forests and bioenergy forests) Cellulose rich plants, dry (straw) By-products from forest industry (sawdust, black liquor) Sugar and starch rich plants Wet bio material (pasture, corn, manure, biological waste, drainage) Oil rich plants (rape seed) Chips, pellets, etc., combustion for production of heat and electricity Fermentation to ethanol (first generation) Hydrolysis and fermentation to ethanol (second generation) Termic gasification: electricity; Synthetic gases for production of second generation biofuels, e.g., DME, methanol, FT-diesel and methane Decomposition to biogasheat, electricity, biofuel Production of RME (biodiesel, first generation) Source: Börjesson (2007)

8 Forestry Program Biomass Opportunities Bioenergy: Electricity and heat from biomass Liquid Biofuels for Transportation: Examples are ethanol, methanol, FT-diesel, RME (rape methyl ester), DME (dimethyl ether) BiogasAn in-between Biofuel: Can substitute natural gas and feed into existing natural gas pipeline systems; Can also be processed into a gas-to-liquid Hydrogen: Can be produced from biomass and coal third generation of fuels) ?

9 Forestry Program Biorefinery Source: Girard and Fallot (2006)

10 Forestry Program Value Added Pulp/Paper Source: Hildingsson (2006) Plants are the most fantastic and efficient chemists in producing complex molecules

11 Forestry Program Source: Svenska Grafikbyrån (2007)

12 Forestry Program What To Do? Resource Efficiency:High productivity of biomass, high rate of re-utilization of rest products Energy Efficiency:Low energy input and high energy output. Low losses in the energy chain Environmental Efficiency: Sustained or improved local environment Low emissions of GHGs and air pollutants Cost Efficiency:Low production costs

13 Forestry Program Resource Efficiency Source: Obersteiner and Nilsson (2006)

14 Forestry Program Resource Efficiency Wheat Straw Rape Sugar Beet Pasture Corn Hamp Willow Poplar Spruce/Pine Forest Residues 13% 4% 17% 12% 8% 10% 13% 5% 3% 5% 3% Energy input (production, harvest and transport 50 km) per produced ton of biomass in percentage: Sweden Source: Pålsson (2007)

15 Forestry Program Energy Efficiency Heat and Electricity of Biomass: Conversion losses 10–20% Losses can be kept especially low in co-production of heat and electricity Biofuels: Losses 30–65% depending on conversion technology and fuel

16 Forestry Program Energy Efficiency Energy yield Mwh/ha and year by poplar energy forests: Southern Sweden Source: Pålsson (2007) Ethanol 15 CHP 40 Co-production of heat (2/3) and electricity (1/3) 40 Energy combines (ethanol 9; heat 16; electricity 7) 32 Electricity and fuels are more valuable energy carriers. Not enough just to look at high energy yields and security aspects

17 Forestry Program Energy Efficiency The two highest yields are associated with cellulosic ethanolthe switch grass and poplar For conventional ethanol, the top yields are from sugar beets in France and sugar cane from Brazilroughly double the yields from corn in the US The above ethanol yields are from optimal growing regions. The energy content of ethanol is about 67% that of gasoline Source: Roberts (2007)

18 Forestry Program Energy Efficiency For biodiesel, oil palm in S.E. Asia is a strong firstroughly 5x rape seed and 10x soybean. This primarily reflects a much higher oil content per kg and per hectare The biodiesel yields estimates are conservative. The energy content of biodiesel is about 90% that of petroleum diesel Source: Roberts (2007)

19 Forestry Program Energy Efficiency Gasoline:Engine 75; Fuel Chain 30; Total: 105 Diesel:Engine 50; Fuel Chain 5; Total: 55 Flexfuel:Engine Fossil 20; Fuel Chain Fossil 5; Engine Ethanol 70; Fuel Chain Ethanol 125; Total: 220 Kwh/100 km Medium-sized car Saved C kg/100 km if the biomass used for ethanol production was instead used for replacing fossil heat: 20–25

20 Forestry Program Environmental Efficiency One ton of wood replaces oil (heating) Reduction of 1.3 ton CO 2 One ton of wood replaces coal-based electricity production Reduction of 1.5 tons of CO 2 One ton of wood replaces gasoline by biofuels Reduction of 0.8 ton of CO 2

21 Forestry Program Environmental Efficiency Perennial plants (forests, energy grass, etc.) normally have less local environmental footprints than single year plants (agriculture) Agriculture uses intense soil preparation, fertilization, irrigation, genetically modified organisms, etc. Hardly any of this is used in, e.g., forestry. If the same production technologies as in agriculture would be used in forestry, the theoretical yield of forest biomass would be 3–4 times higher

22 Forestry Program Environmental Efficiency Lower limit Upper limit Source: Adapted from WWI/GTZ (2006)

23 Forestry Program Cost Efficiency Agriculture-based ethanol~70$/bbl Brazilian ethanol~50$/bbl (including fuel economy penalty) First generation biodieselHardly competitive Second generation (post 2010) biomass-to-liquid from forest biomass ~50$/bbl Second generation (post 2010) lingo-ethanol ~50$/bbl Target for being competitive with biofuels 50$/barrel

24 Forestry Program Raw Material Supply TightensDriving Up Costs for Alternative Energies At prices of $100/barrelsuccess of biofuels High demand in alternative fuels Biofuels Link Available Land Biofuel Demand Agriculture Products

25 Forestry Program Supply limited (~50 million Toe today 200–300 million ha totally available for additional production) Agricultural commodity demand increases with increased prices The cost goal posts have changed dramatically Raw Material Supply TightensDriving Up Costs for Alternative Energies

26 Forestry Program Transition will take much longer than expected Palm Oil (raw material cost +90%) 20042007 Economically Competitive$50/barrel$130/barrel Raw Material Supply TightensDriving Up Costs for Alternative Energies

27 Forestry Program Biogas Food Electricity Heat Fuel Or- ganic Waste Manure, Wet Energy Biomass Biogas Reactor Fermentation rests Source: Formas (2007)

28 Forestry Program Economies of Scale A production unit for synthetic biofuels has to be big due to economies of scalethis means a 380 million liter plant/year This will require 2.4 million m 3 of green wood/year

29 Forestry Program Economies of Scale At large scale, estimate cost per installed gallon of $1.70 for cellulosic ethanol vs. $1.45 for starch-based ethanol Lower variable costs vs corn-based ethanol $1.22-$1.31/gallon for cellulosic ethanol (assuming no carbon credits) $1.55-$1.75/gallon for starch-based ethanol Higher capital cost driven by energy-efficiency cogen Cogen is elective based on separate ROI analysis Abandoned infrastructure reduces cost vs new Estimated Scale Economies for Hardwood-based Cellulosic Ethanol Source: Roberts (2007) Source: SunOpta Bio Process Inc.

30 Forestry Program Spatial Aspects The economies of scale of biofuel plants causes large logistic challenges Poland Example To reduce Polands current fossil fuel consumption by 20% would require: 3 production units the size of 380 million liters/year This means that each of these units needs a truck delivery every 3 rd minute 24 hours around the clock EU-15 To replace 15% of the fuel consumption would require 120–125 units of the above size The land required for biomass production is the same as the total land area of Poland The logistic problems are enormous The production units have to be close to ports Source: Blinge (2007)

31 Forestry Program Biomass Production Source: Obersteiner and Nilsson (2006)

32 Forestry Program Transportation Costs of Biofuels 20 /ton 200 km by truck 600 km by rail 10,000 km by ship

33 Forestry Program Jatropha Curcas Yield not yet measured; plants are too young 8 month old plantation near Jogjakarta, Java, Indonesia Good yielding bush 50 year old Jatropha tree J. Mahafaliensis near Toleara, Madagascar

34 Forestry Program Toxic fruit and bark Can grow on low productive land Promising for producing environmental neutral fuel The yield is far below that of palm oil per hahuge areas needed Jatropha Curcas

35 Forestry Program Average yield: 1.7 tons oil/ha/year Bush breeding and cultivated conditions yields 2.7 tons oil/ha/yearhuge areas needed The bush needs 600–1500 mm of rainfall/year (ideally 1000 mm) to get yield Produces fruit and flowers at the same time Jatropha Curcas

36 Forestry Program Jatropha Curcas China is claiming to have planted 13 million ha of Jatropha Curcas by 2010 producing 6 million ton of biodiesel

37 Forestry Program Palm Oil Indonesia and Malaysia produce some 80% of the internationally traded palm oil Palm oil constitutes 40% of edible oil trade Average production 3.5 tons oil/ha/year Hybrid clones 6.5 to 8.0 tons/ha/year

38 Forestry Program Indonesia Currently 6 million ha under palm oil production 18 million ha of forests have been cleared for palm oil plantations Additional 20 million ha are allocated in development plans for oil plantations One of the main motors for deforestation Large scale forest fires Increased GHG emissions (drainage)

39 Forestry Program Competition Food demand will increase over time Forest industrial products demand will increase in the future (driven by economic growth, demographic development, and energy development) Using the same raw material; pulp and paper industry generates 13 times more employment and 8 times more value compared to energy sectors (Pöyry, 2007) Chemical industry has the potential to generate much higher value added of the biomass Some 8% of all fossil fuel goes to the chemical industry. Cracking the oil and generating the chemicals consume a lot of fossil fuel. Plants have the possibility to generate some of the chemical structures by themselves Competition within the bioenergy sector

40 Forestry Program Wood Pellets Europe is driving the global market for wood pellets, and this demand is driven by a series of carrots and sticks. Consumption already up roughly 10x since 2000 to ~5 million tpy, and expected to rise to almost 13 million tpy by 2010 Consumers? ~60% to co-fire coal power plants, 25% district heating, 15% residential Source: Roberts (2007) Source: Wood Pellet Association of Canada

41 Forestry Program Difficult to Generalize on Biofuels The bioenergy systems: Many combinations of bio feed stocks Many different conversion technologies Many different final bioenergy products Different local conditions Competition on raw material with other products Security aspects Technological developments unknown

42 Forestry Program Modeling Framework Multigas-MESSAGE Systems Engineering IA-Model Exogenous drivers for CH 4 & N 2 O emissions: N-Fertilizer use, Rice production, Bovine Livestock Bottom-up mitigation technologies for non-CO 2 emissions Black carbon and organic carbon emissions coefficients Data Sources: Obersteiner and Rokityanskiy, FOR Data Sources: Fischer and Tubiello, LUC Data Sources: USEPA, EMF-21 Data Sources: Bond; Klimont and Kupiano, TAP Data Sources: Fischer and Tubiello, LUC Data Sources: Obersteiner and Rokityanskiy, FOR; Tubiello and Fischer, LUC

43 Forestry Program Institutional Aspects Established energy companies are getting bigger and bigger and have strong possibilities to influence the political power and policy making. The same is true for the agricultural lobby. A power the new bioenergy industry is lacking Production of bio raw material in agriculture is often operated with substantial subsidies and protected markets. Forest production is largely based on the principles of a market economy. How to get an efficient land use allocation under these conditions? To create a highly productive economy less or independent of fossil fuels is a transition comparable with the industrial revolution Important to create environments open for experiments, failures and long-term strategies driving technological innovations. Relying just on the current economic forces will not be sufficient Minds are like parachutesthey work best when open

44 Forestry Program Subsidies to Ethanol and Biodiesel Source: Doornbosch and Steenblik (2007) Units EthanolBiodiesel LowHighLowHigh Support per liter equivalent of fossil fuels displaced United States European Union Switzerland Australia $/liter equivalent $/liter equivalent 1.03 1.64 0.66 0.69 1.40 4.98 1.33 1.77 0.66 0.77 0.71 0.38 0.90 1.53 1.54 0.76 Support per tonne of CO 2 equivalent avoided United States European Union Switzerland Australia $/tonne of CO 2 equivalent $/tonne of CO 2 equivalent NA 590 340 244 545 4520 394 1679 NQ 340 253 165 NQ 1300 768 639 Note: The ranges of values reflect corresponding ranges in the estimates of total subsidies, variation in the types of feedstocks, and in the estimates of life-cycle emissions of biofuels in the different countries (per liter net fossil fuel displaced & per metric ton of CO 2 equivalent avoided )

45 Forestry Program Conclusions: Biofuels Competition for land Once markets have stabilized, biofuels will be dominated by ligno- cellulosics Bio-ethanol will continue to develop as a transport fuel developed in tropical latitudes Replacement of fossil fuels for electricity and heat production by biomass in co-generation of heat and electricity is superior to using the biomass for biofuels Base production units of biofuels close to raw material and distribute finished energy carriers Wood has some advantages relative to most other cellulosic biomass: Higher sugar content Higher bulk density (less top costs) Longer storage life and lower storage costs Less use of water and fertilizers Forest sector has a well developed collection system Trade in bio raw material and biofuels will increase substantially

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