Systems assessment of biofuels: Modelling of future cost and greenhouse gas abatement competitiveness between biofuels for transport on the case of Germany

Biofuels are a renewable alternative for reducing the climate impact of transport. Due to the versatility of biomass and complexity of economics and impacts, biofuels are part of a complex system, which is here analysed from a systems perspective. Several models are developed in order to assess the competitiveness of various crop based biofuel options as part of a system, using different economic and environmental functional units. The scope is set to Germany until 2050. The capital and feedstock costs were revised to higher levels compared to common assumptions. The different functional units result in different merit orders for the biofuel options. Currently used biofuels, rape seed based biodiesel and starch crop based bioethanol, were found not to be competitive when considering differentiated and increasing feedstock costs. Advanced liquid fuels were only competitive at extreme assumptions, contrary to common expectations. Instead, sugar beet based ethanol dominated for most of the time span when comparing energetic cost, whereas Synthetic Natural Gas (SNG) was competitive on a greenhouse gas abatement (GHG) cost basis, especially at a rapid decarbonisation of the power mix. With a land use GHG abatement functional unit, silage maize based biomethane was the best, with SNG converging only at very high renewables shares of the background systems. Switching from current practise to higher yielding biofuel options can treble the abatement per land area for the present day, and potentially increase it by a factor five in the future. A focus on GHG abatement per area of arable land results in the land passenger transport sector to be of the highest priority due to the suitability of higher yielding biofuel options, followed by land goods transport, shipping and finally aviation. If gaseous fuels are not possible to introduce on a large scale, sectors where liquefied gaseous fuels are suitable become the priority, i.e. goods transport and shipping. The current practise of applying admixture quotas to sub-sectors of land transport renders a significantly lower climate benefit compared to an overall optimal usage, and a large societal transition is required before aviation biofuels become the climate optimal biomass usage. The direct importance of land use has thus far not received enough attention in terms of the economics of biofuels from dedicated crops, as well as for the greenhouse gas emissions policy. Biofuels produced from arable land can provide a strong GHG benefit if an expansion of arable land is hindered through redirecting land use, which requires a holistic policy approach.:Abstract ix Acknowledgments xi List of Publications xiii List of Acronyms xv I Introductory chapters 1 1 Background 3 1.1 Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.2 Technological Change and Modelling . . . . . . . . . . . . . . . . . . . . . . 6 1.3 Aim and objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2 Methodology 9 2.1 Systems modelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.2 Model description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3 Results and discussion 17 3.1 Biofuel techno-economic potential and competitiveness . . . . . . . . . . . . 17 3.2 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.2.1 Resource base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.2.2 Biomass climate benefit in other sectors . . . . . . . . . . . . . . . . 20 3.2.3 Other renewable fuel options . . . . . . . . . . . . . . . . . . . . . . 21 3.2.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3.2.5 Applicability of results to other regions . . . . . . . . . . . . . . . . 22 4 Conclusions 25 4.1 Future research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Bibliography 29 Contribution to Appended Papers 33 Curriculum Vitae 35 CONTENTS II Appended papers 37 1 Competitiveness of advanced and conventional biofuels: Results from least-cost modelling of biofuel competition in Germany 39 2 Biomass price developments inhibit biofuel investments and research in Germany: The crucial future role of high yields 51 3 Relative greenhouse gas abatement cost competitiveness of biofuels in Germany 63 4 Climate optimal deployment of biofuels from crops in Germany 85Biokraftstoffe sind eine erneuerbare Alternative zur Verringerung der Klimaauswirkungen des Verkehrs. Aufgrund der Vielseitigkeit der Biomasse und der Komplexität der Ökonomie und der Auswirkungen sind Biokraftstoffe Teil eines komplexen Systems, das hier aus einer Systemperspektive analysiert wird. Es werden mehrere Modelle entwickelt, um die Wettbewerbsfähigkeit verschiedener biogener Biokraftstoffoptionen als Teil eines Systems unter Verwendung verschiedener wirtschaftlicher und ökologischer Funktionseinheiten zu bewerten. Der Umfang ist auf Deutschland bis 2050 festgelegt. Die Kapital- und Rohstoffkosten wurden im Vergleich zu herkömmlichen Annahmen auf ein höheres Niveau angepasst. Die verschiedenen Funktionseinheiten führen zu unterschiedlichen Merit Order für die Biokraftstoffoptionen. Die derzeit verwendeten Biokraftstoffe, Raps-Saatgut-Biodiesel und Stärkepflanzen-Bioethanol, erwiesen sich als nicht wettbewerbsfähig, wenn man differenzierte und steigende Rohstoffkosten in Betracht zieht. Fortschrittliche flüssige Kraftstoffe waren nur unter extremen Annahmen wettbewerbsfähig, entgegen den üblichen Erwartungen. Stattdessen dominierte Ethanol auf Zuckerrübenbasis für einen Großteil der Zeitspanne beim Vergleich der Energiekosten, während synthetisches Erdgas (SNG) auf der Basis der Treibhausgasvermeidungskosten wettbewerbsfähig war, insbesondere bei einer schnellen Dekarbonisierung des Strommixes. Mit einer Funktionseinheit zur Reduzierung der Treibhausgasemissionen war Silagemais-basiertes Biomethan die beste Option, wobei SNG bei sehr hohen Anteilen an erneuerbaren Energien der Hintergrundsysteme konvergierte. Der Wechsel von der derzeitigen Praxis zu ertragreicheren Biokraftstoffoptionen kann die Verringerung pro Landfläche für die Gegenwart verdreifachen und in Zukunft möglicherweise um den Faktor fünf erhöhen. Die Fokussierung auf die Reduzierung von Treibhausgasen pro Ackerfläche führt dazu, dass der Landpersonenverkehr aufgrund der Eignung ertragreicherer Biokraftstoffoptionen, gefolgt von Landverkehr, Schifffahrt und schließlich Luftfahrt, höchste Priorität genießt. Wenn es nicht möglich ist, gasförmige Kraftstoffe in großem Maßstab einzuführen, werden Sektoren, in denen verflüssigte gasförmige Kraftstoffe geeignet sind, zur Priorität, d.h. Güterverkehr und Schifffahrt. Die aktuelle Praxis der Anwendung von Beimischungsquoten für Teilbereiche des Landverkehrs führt zu einem deutlich geringeren Klimanutzen im Vergleich zu einer insgesamt optimalen Nutzung, und es ist ein großer gesellschaftlicher Wandel erforderlich, bevor Biokraftstoffe aus der Luftfahrt zur klimaoptimalen Biomassenutzung werden. Die direkte Bedeutung der Landnutzung hat bisher nicht genügend Beachtung gefunden, sowohl in Bezug auf die Wirtschaftlichkeit von Biokraftstoffen aus Sonderkulturen als auch in Bezug auf die Treibhausgasemissionen. Biokraftstoffe, die von Anbaubiomasse hergestellt werden, können einen starken Treibhausgasvorteil bieten, wenn eine Ausweitung der Ackerfläche durch eine Neuausrichtung der Landnutzung behindert wird, was einen ganzheitlichen politischen Ansatz erfordert.:Abstract ix Acknowledgments xi List of Publications xiii List of Acronyms xv I Introductory chapters 1 1 Background 3 1.1 Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.2 Technological Change and Modelling . . . . . . . . . . . . . . . . . . . . . . 6 1.3 Aim and objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2 Methodology 9 2.1 Systems modelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.2 Model description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3 Results and discussion 17 3.1 Biofuel techno-economic potential and competitiveness . . . . . . . . . . . . 17 3.2 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.2.1 Resource base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.2.2 Biomass climate benefit in other sectors . . . . . . . . . . . . . . . . 20 3.2.3 Other renewable fuel options . . . . . . . . . . . . . . . . . . . . . . 21 3.2.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3.2.5 Applicability of results to other regions . . . . . . . . . . . . . . . . 22 4 Conclusions 25 4.1 Future research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Bibliography 29 Contribution to Appended Papers 33 Curriculum Vitae 35 CONTENTS II Appended papers 37 1 Competitiveness of advanced and conventional biofuels: Results from least-cost modelling of biofuel competition in Germany 39 2 Biomass price developments inhibit biofuel investments and research in Germany: The crucial future role of high yields 51 3 Relative greenhouse gas abatement cost competitiveness of biofuels in Germany 63 4 Climate optimal deployment of biofuels from crops in Germany 8

Greenhouse Gas Abatement Potentials and Economics of Selected Biochemicals in Germany

In this paper, biochemicals with the potential to substitute fossil reference chemicals in Germany were identified using technological readiness and substitution potential criteria. Their greenhouse gas (GHG) emissions were quantified by using life cycle assessments (LCA) and their economic viabilities were determined by comparing their minimum selling prices with fossil references’ market prices. A bottom up mathematical optimization model, BioENergy OPTimization (BENOPT) was used to investigate the GHG abatement potential and the corresponding abatement costs for the biochemicals up to 2050. BENOPT determines the optimal biomass allocation pathways based on maximizing GHG abatement under resource, capacity, and demand constraints. The identified biochemicals were bioethylene, succinic acid, polylactic acid (PLA), and polyhydroxyalkanoates (PHA). Results show that only succinic acid is economically competitive. Bioethylene which is the least performing in terms of economics breaks even at a carbon price of 420 euros per ton carbon dioxide equivalent (€/tCO2eq). With full tax waivers, a carbon price of 134 €/tCO2eq is necessary. This would result in positive margins for PHA and PLA of 12% and 16%, respectively. From the available agricultural land, modeling results show high sensitivity to assumptions of carbon dioxide (CO2) sequestration in biochemicals and integrated biochemicals production. GHG abatement for scenarios where these assumptions were disregarded and where they were collectively taken into account increased by 370% resulting in a 75% reduction in the corresponding GHG abatement costs

How diet portfolio shifts combined with land-based climate change mitigation strategies could reduce climate burdens in Germany

Many studies have analysed the environmental impact of vegan, vegetarian, or reduced meat diets. To date, literature has not evaluated how diet shifts affect environmental impacts by utilising portfolios which reflect personal nutrition preferences. Further, changing diets could alter the available land for non-food uses. This paper defines novel diet portfolios to outline alternative diet transitions and choices within the population and finds their effect on greenhouse gas (GHG) emissions, primary energy use, and land use in Germany. The aim of this study is to capture how these diet shifts affect land availability and increase the options for land-based climate change mitigation strategies. To do so, a contextualisation is made to compare the use of freed-up land for afforestation or biomethane production (with and without carbon capture and storage). The investigated diet portfolios lead to a reduction of the investigated impacts (GHG emissions: 7–67%; energy use: 5–46%; land use: 6–64%). Additionally, afforestation of freed-up land from each diet portfolio leads to further emission removals of 4–37%. In comparison, using the land to produce energy crops for biomethane production could lead to 2–23% further CO2-eq emission reductions when replacing fossil methane. If biomethane production is paired with carbon capture and storage, emission abatement is increased to 3–34%. This research indicates various short-term pathways to reduce GHG emissions with portfolio diet shifts. Utilising freed-up land for climate change mitigation strategies could prove essential to meet climate targets, but trade-offs with, e.g. biodiversity and ecosystem services exist and should be considered

Are biofuel mandates cost-effective? - An analysis of transport fuels and biomass usage to achieve emissions targets in the European energy system

Abatement options for the hard-to-electrify parts of the transport sector are needed to achieve ambitious emissions targets. Biofuels based on biomass, electrofuels based on renewable hydrogen and a carbon source, as well as fossil fuels compensated by carbon dioxide removal (CDR) are the main options. Currently, biofuels are the only renewable fuels available at scale and are stimulated by blending mandates. Here, we estimate the system cost of enforcing such mandates in addition to an overall emissions cap for all energy sectors. We model overnight scenarios for 2040 and 2060 with the sector-coupled European energy system model PyPSA-Eur-Sec, with a high temporal resolution. The following cost drivers are identified: (i) high biomass costs due to scarcity, (ii) opportunity costs for competing usages of biomass for industry heat and combined heat and power (CHP) with carbon capture, and (iii) lower scalability and generally higher cost for biofuels compared to electrofuels and fossil fuels combined with CDR. With a -80% emissions reduction target in 2040, variable renewables, partial electrification of heat, industry and transport, and biomass use for CHP and industrial heat are important for achieving the target at minimal cost, while an abatement of remaining liquid fossil fuel use increases system cost. In this case, a 50% biofuel mandate increases total energy system costs by 123–191 billion €, corresponding to 35%–62% of the liquid fuel cost without a mandate. With a negative -105% emissions target in 2060, fuel abatement options are necessary, and electrofuels or the use of CDR to offset fossil fuel emissions are both more competitive than biofuels. In this case, a 50% biofuel mandate increases total costs by 21–33 billion €, or 11%–15% of the liquid fuel cost without a mandate. Biomass is preferred in CHP and industry heat, combined with carbon capture to serve negative emissions or electrofuel production, thereby utilising biogenic carbon several times. Sensitivity analyses reveal significant uncertainties but consistently support that higher biofuel mandates lead to higher costs

A model for cost- and greenhouse gas optimal material and energy allocation of biomass and hydrogen

BENOPT, an optimal material and energy allocation model is presented, which is used to assess cost-optimal and/or greenhouse gas abatement optimal allocation of renewable energy carriers across power, heat and transport sectors. A high level of detail on the processes from source to end service enables detailed life-cycle greenhouse gas and cost assessments. Pareto analyses can be performed, as well as thorough sensitivity analyses. The model is designed to analyse optimal biomass and hydrogen usage, as a complement to integrated assessment and power system models

Summary of Milestones 2030 : Elements and milestones for the development of a stable and sustainable bioenergy strategy

This publication is the English version of the summary of the German report „Meilensteine 2030“ (THRÄN et al. 2015) which is published in the series of the funding programme “Biomass energy use”. The report describes elements and milestones for the development of a stable and sustainable bioenergy strategy

Meilensteine 2030: Elemente und Meilensteine für die Entwicklung einer tragfähigen und nachhaltigen Bioenergiestrategie : Endbericht zu FKZ 03KB065, FKZ 03MAP230

In einer weitgehend auf erneuerbaren Energien fußenden Energieversorgung in Deutschland muss Bioenergie künftig die Lücken füllen, die nicht aus anderen Quellen gespeist werden können – diese These hat die Diskussion um Bioenergie im beginnenden 21. Jahrhundert stark bestimmt (BARZANTNY et al., 2009; KIRCHNER & MATTHES, 2009; SaCHVERSTÄNDIGENRAT FÜR UMWELTFRAGEN, 2011; SCHLESINGER et al., 2010, 2011). Dabei gibt es sowohl starke Argumente für den flexiblen Einsatz im Strombereich als auch für ausgewählte Kraftstoffpfade (z. B. Schwerlastverkehr, Schifffahrt, Flugverkehr), während im Wärmebereich Bioenergie als gut durch alternative erneuerbare Versorgungskonzepte ersetzbar gilt. Jedoch hat sich auch gezeigt, dass Biomasse zwar regenerativ, jedoch für den konkreten Zeitraum und unter Nachhaltigkeitsaspekten nur begrenzt verfügbar ist. Künftig wird erwartet, dass der Bedarf an Nahrungs- und Futtermitteln wie auch für die stoffliche Nutzung steigt. Damit wird eine Priorisierung der Einsatzbereiche für den weiteren Ausbau zunehmend notwendig (BMVBS, 2010; THRÄN et al., 2011; KOALITIONSVERTRAG, 2013; MAJER et al., 2013). Es herrscht Einigkeit, dass Bioenergienutzung im Einklang mit den Zielen der nachhaltigen Entwicklung stehen muss und insbesondere gegenüber der Ernährungssicherung nachrangig ist, dass die Nutzung zunehmend an den Erfordernissen des Energiesystems ausgerichtet sein müssen und dass nur bei stetiger Weiterentwicklung der Technologien ein angemessener Beitrag der Bioenergie erreicht werden kann. Auch scheint es sinnvoll, dass man – vor dem Hintergrund der vielfältigen aktuellen Entwicklungen im Bereich der regenerativen, nicht-biogenen Energietechnologien und Energieträger – Bioenergiestrategien favorisiert, die geringe Pfadabhängigkeiten aufweisen und z. B. Technologiekonzepte berücksichtigen, die sowohl im Strom- / Wärme-Bereich als auch im Kraftstoffsektor genutzt werden können

Greenhouse Gas Abatement Potentials and Economics of Selected Biochemicals in Germany

In this paper, biochemicals with the potential to substitute fossil reference chemicals in Germany were identified using technological readiness and substitution potential criteria. Their greenhouse gas (GHG) emissions were quantified by using life cycle assessments (LCA) and their economic viabilities were determined by comparing their minimum selling prices with fossil references’ market prices. A bottom up mathematical optimization model, BioENergy OPTimization (BENOPT) was used to investigate the GHG abatement potential and the corresponding abatement costs for the biochemicals up to 2050. BENOPT determines the optimal biomass allocation pathways based on maximizing GHG abatement under resource, capacity, and demand constraints. The identified biochemicals were bioethylene, succinic acid, polylactic acid (PLA), and polyhydroxyalkanoates (PHA). Results show that only succinic acid is economically competitive. Bioethylene which is the least performing in terms of economics breaks even at a carbon price of 420 euros per ton carbon dioxide equivalent (€/tCO2eq). With full tax waivers, a carbon price of 134 €/tCO2eq is necessary. This would result in positive margins for PHA and PLA of 12% and 16%, respectively. From the available agricultural land, modeling results show high sensitivity to assumptions of carbon dioxide (CO2) sequestration in biochemicals and integrated biochemicals production. GHG abatement for scenarios where these assumptions were disregarded and where they were collectively taken into account increased by 370% resulting in a 75% reduction in the corresponding GHG abatement costs