Biomass’ Role in Europe’s Green Deal

Along with the Green Deal, the European Commission announced a very ambitious goal: Climate Neutrality by 2050.
By Holger Streetz | March 24, 2020

Along with the Green Deal, the European Commission announced a very ambitious goal: Climate Neutrality by 2050. A Just Transition Fund of up to 100 trillion euro will help companies become world leaders in clean products and technologies, ensuring a just and inclusive transition, while protecting humans, animals and plants by cutting pollution. But what role does biomass play in the future of Europe’s renewable energy policy, and how can pellet producers influence their future involvement?
The European Commission introduced the European Green Deal in December 2019. The EGD is a roadmap of key policies and measures aimed at answering the call for action in regard to climate change. It is part of the commission’s strategy to realize the United Nation’s 2030 Agenda. Climate neutrality in the context of EGD means no net emissions of greenhouse gases in 2050, and the decoupling of economic growth from use of resources. The elements of the EGD span from accelerating the shift to sustainable and smart mobility to zero pollution. This includes clean, affordable energy with a risk-free baseload of renewable energies, energy efficient heating and cooling, and sustainable materials management (circular economy). To improve the quality of life, the EGD includes the goal of a healthy and environmentally friendly food system.

As an integral component to reach the ambitious goals, the European Commission will implement a Sustainable Europe Investment Plan, including a “Just Transition Fund.” The fund’s mechanism is to align and minimize the negative effects of structural changes, especially befitting regions that strongly rely on fossil fuels and carbon-intensive processes, as they will be aided in reskilling programs and energy-efficient housing, and also receive support for low-carbon activities.

The European Commission places its trust in the private sector as a key financier of the green transition. The European funds will lay the foundations for sustainable investments, facilitating the identification of sustainable investment opportunities and integrating climate risks into the financial system. This offers opportunities, especially for large renewable energies corporations, since the bureaucratic efforts to receive grants are substantial and might scare off small- and medium-sized companies. On the other hand, large providers are the ones able to deliver guaranteed base loads.

The European Commission’s Knowledge Center for Bioeconomy acknowledges that biomass energy is one of the main sources of renewable energy in the EU. In total, renewable energies contributed 17% (195,476 oil equivalent kilotons) of the EU’s gross energy consumption for 2016. Bioenergy contributed 59.2% thereof (12% transport fuels, 13.4% bioelectricity and 74.6% biomass). Although EU domestic biomass supply for primary energy reached 140 MTOE (million metric tons of oil equivalent) in 2016 and is planned to reach 178 MTOE by 2020, growth has been much slower than foreseen. Additionally, there are knowledge gaps in statistics, reporting and data collection on biomass supply, trade and use.

According to the Statistical Report 2019 of Bioenergy Europe, in 2016, bioelectricity accounted for 5.6% of EU’s gross electricity generation. Renewable biofuels for transportation had a market share of approximately 5%. Biomass for heating and cooling reached around 23%. Thereof, residential heating accounted for 50% of the final bioheat consumption. Finally, wood pellet consumption reached 27 million tons in the EU in 2018, 16.8 million tons of which were used for heating.

The European bioenergy landscape is diverse and scattered. Some countries suffer turf wars of industry associations or lack strategy. Compared to fossil fuels, renewables are still a small player in the market and have enormous growth potential. If the European Commission achieves one thing with the EGD, it will be sending an impulse to the markets to focus on renewables and step up efforts to grow these industries and overcome the sometimes very slow development process (e.g., the German onshore and offshore wind power industry). Associations need to align their energy and improve their educational portfolio for politicians. In 2020, the European Commission and other bodies will be busy reviewing and revising relevant energy legislation, especially clean, affordable and secure energy. The European Commission will conclude its assessment of the final National Energy and Climate Plans by June, in addition to setting a strategy for smart sector integration, renovating the building sector and determining other energy regulations. This is an unmatched opportunity for associations and corporations to bring in their expertise, ideas and demands and leave a remarkable footprint in Europe’s future renewable energy policy.



Author: Holger Streetz
Director of Business Development, Bathan AG
 h.streetz@bathan.ch
bathan.ch