Bioenergy is a very versatile and flexible solution that can assist the main challenges of achieving climate neutrality in the EU by 2050 with job creation and economic growth. Each additional Mtoe of biomass for energy could lead to an impact of EUR 261 million in terms of GDP and average employment creation of over 5 100 Full-Time Equivalent (FTE) while preventing 2.4 million tonnes of carbon dioxide equivalents (MtCO2eq) emissions by the replacement of fossil fuels, a new report finds.
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Currently, millions of European citizens rely on bioenergy to heat their homes, not only through individual heating systems but also through collective systems, such as district heating. Moreover, many industrial processes, especially within wood-related industries, such as the paper and pulp industries, rely on reusing their residues to supply energy to their processes.
In the future, the number of citizens and industries that rely on the use of bioenergy will increase as further development of this renewable source is required to achieve the EU emissions targets for 2030 and 2050.
Deloitte report launch
Commissioned by Bioenergy Europe, Deloitte has analyzed the future role of bioenergy in achieving climate neutrality, as well as its contribution to society considering the socio-economic and environmental impacts not only today (2019) but also on the 2050 horizon.
The report “Towards an Integrated Energy System: Assessing Bioenergy’s Socio-Economic and Environmental Impact” was presented on January 24, 2022, by Enrique Doheijo, Director of the Energy Department, Deloitte Spain during a virtual launch and panel discussion hosted by Bioenergy Europe and moderated by David Rose, LACS Training.
Bioenergy’s first driver for the future is cost-effectiveness. Bioenergy already represents 13.3 percent of the (EU 27) energy mix. But for innovation in our industry, there are three key areas: flexibility, decentralization, and (net emissions transfers), remarked Jean-Marc Jossart, Secretary-General, Bioenergy Europe during the opening of the launch.
Jossart pointed out that bioenergy is the “first energy source with mandatory sustainable criteria – time to turn this into an opportunity. A clear & stable framework is necessary to support a sustainable economy.”
Economic growth and employment impact
The Deloitte assessment estimates the impact of bioenergy on the economy in terms of GDP and employment creation.
It pays particular attention to its effect on the rural environment, while also considering the impacts of bioenergy on the mitigation of carbon emissions, the contribution to forest health, the security of the energy supply, and the development of a circular economy.
Furthermore, it looks at the complementarities of bioenergy with other renewable energies and the adoption of clean hydrogen solutions.
The report found that in 2019, the impact of bioenergy on employment reached 794 392 FTE, with 629 104 and 165 288 FTE mobilized directly and indirectly, respectively.
The operation and maintenance (O&M) of the different solutions represented 22 percent of the direct employment created, followed by the manufacture of equipment, representing 11 percent, and the construction/installation, which accounted for 4 percent of the direct employment generated.
The report notes that European companies are global leaders when it comes to technological development, manufacturing, and fuel production of bioenergy. About 74 percent of the bioenergy technology suppliers are based within the EU.
These companies represent a globally competitive industry and have the necessary knowledge and professionals to maintain this leadership as an R&D hub for bioenergy that promotes vibrant commercial activity.
Improve economic- and energy security
Other benefits highlighted by the report include bioenergy’s contribution to the decarbonization of fossil intensive sectors where carbon emissions are difficult to abate such as industry and transportation.
In 2019, the replacement of 132 million tonnes of oil equivalent (Mtoe) fossil fuels for energy by biomass prevented 290 million tonnes of carbon dioxide equivalents (MtCO2eq) emissions while reducing the dependence on non-EU countries for energy supply by promoting domestic renewable energy resources.
This reduction is equivalent to around 8 percent of the EU27 greenhouse gas (GHG) emissions
At the same time, bioenergy in the EU is mainly produced by utilizing biomass generated within the EU, with an import dependency from outside the EU remaining at a low 3.7 percent.
The replacement of imported fossil fuels with domestic renewable energy improves the overall security of supply and reduces the socio-political risks associated with being overly dependent on such fossil imports.
Furthermore, the cost of biomass for energy has proven to be both more stable over time and cheaper than those of fossil fuels. Moreover, a price increase of fossil gas, the vast majority of which is imported, results in a price increase for electricity as gas is increasingly being used to balance intermittent renewable power sources.
Coupled with the difficulty of forecasting prices this puts citizens and industry at risk of facing fluctuating energy costs which can increase energy poverty and decrease the competitiveness of the European industry.
Reduce fossil emissions and generate economic growth
Looking ahead to 2050 the Deloitte report notes that the transition to a climate-neutral EU economy by 2050 is at the heart of the European Green Deal presented in 2019.
In the Impact Assessment accompanying the document “Stepping up Europe’s 2030 climate ambition”, the European Commission analyzed the options related to the level of policy ambition for 2030 to allow for the gradual transition to achieve this objective.
This Impact Assessment considered a series of possible scenarios for 2030 and 2050 that focus on carbon pricing and/or regulatory measures. The scenarios were built around a set of specific policies with the aim of showcasing the specific energy dependencies across different industries to identify sectors where GHG reductions could potentially be achieved
In the context of the scenarios reported by the Impact Assessment of the European Commission, the average gross inland consumption of biomass for energy would be near 220 Mtoe in 2050, showing an annual increase of about 2 percent between 2019 and 2050.
This annual increase is actually lower than that shown by bioenergy in the last 10 years, which was around 2.6 percent, showing that the future increase could correspond to a business-as-usual scenario.
The increase in biomass consumption for energy could serve as a vehicle for job creation and an economic opportunity for countries throughout the EU.
According to the assessment, each additional Mtoe of biomass for energy would lead to an impact of EUR 261 million in terms of GDP and an employment creation of 5 181 FTE, on average.
Furthermore, based on the average gross inland consumption of biomass for energy in 2050 reported by the Impact Assessment of the European Commission, the replacement of fossil fuels with biomass could prevent, on average, 487 MtCO2eq emissions for that year.
Hence, each additional Mtoe of biomass for energy could not only mitigate 2.4 MtCO2eq emissions due to the replacement of fossil fuels for energy but at the same time generate economic growth and employment.