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NBB 2017: Forests and political pricing paved the road to bioenergy HEL

Whilst good intentions may have paved the road for environmental non-governmental organisations (ENGO) to Brussels, forests and pragmatic political pricing paved the road to HEL for the Nordic-Baltic Bioenergy (NBB). The three-day do, including a post-conference tour, emphatically demonstrated why Finland and the Nordic-Baltic region as a whole, is such an over-achiever in EU renewable energy terms.

(Left) Lauri Hetemäki, Assistant Director, European Forest Institute (EFI) and Mika Lintilä, Minister of Economic Affairs of Finland.

(Left) Lauri Hetemäki, Assistant Director, European Forest Institute (EFI) and Mika Lintilä, Minister of Economic Affairs of Finland.

– We need to achieve the challenging targets set out in the Paris Agreement and at the same time, we need to keep our economies competitive. Our forests can play a significant part in all this. Forests can provide us carbon sinks and sustainable materials, energy, products, and services. All this is known as the bioeconomy, said Mika Lintilä, Minister of Economic Affairs of Finland in his welcome address.

Forest is the operative word and as previously noted, the Nordic-Baltic region is in a league of its own when it comes to bioenergy implementation with 5 of the 11 EU-member states that have already achieved their overall EU 2020 renewable energy targets.

However, although the countries have very much in common, it would be a fallacy to conclude that the factors and motivations behind those with prominent bioenergy positions are also the same. They are not and a key takeaway is how each country has a lot to learn from each other.

Memorable externalities

Held March 29-31 in downtown Helsinki, the Finnish capital, this year’s edition was jointly organised by the Finnish Bioenergy Association (Bioenergia) and the Swedish Bioenergy Association (Svebio). Unbeknown to the organisers and the around 200 participants, the timing of the event turned out to be memorable in context over and above 2017 being Finland’s centennial as a country, which of course was a “known known” and reason enough to host the event in Helsinki to “Hyvä” the occasion.

One of several Hakevuori wood terminals that supplies heat and CHP plants in the greater Helsinki area with forest-based fuel from stumps, logging residues and unmerchantable roundwood with Markku Eskelinen sales manager.

One of several Hakevuori wood terminals that supplies heat and CHP plants in the greater Helsinki area with forest-based fuel from stumps, logging residues and unmerchantable roundwood with Markku Eskelinen sales manager.

As was the world figure skating championships taking place concurrently in Helsinki. However, also on March 29, only days after the 60-year anniversary of the Treaty of Rome, the foundation of what is now the European Union (EU), the UK PM Theresa May formally invoked article 50 to leave the EU.

Across the pond, the artful deal-maker US President Trump is busy making good on a number of his non-negotiable election rally promises that seem set on trying to make America the great GHG emitter, almost as if the recent IEA report was bad news.

If not in absolute numbers, though every effort is seemingly being made to do so, certainly per capita, per mile or per MWh; easing fuel efficiency requirements for automakers, lifting the moratorium on coal and the Keystone XL pipeline project and to top it all off, the signing on March 28 at the head office of the Environment Protection Agency (EPA) of an executive order to rescind the Clean Power Plan. It remains to be seen if backing out of the Paris Agreement is the next step forward for US climate policy reversal.

The 420 MWth/220MWe Hanasaari coal-fired combined heat and power (CHP) plant in downtown Helsinki power plant started to co-fire wood pellets at the end of 2015. Commissioned in 1974, the plant will be closed by the end of 2024 and the site repurposed as a residential/recreational area.

The 420 MWth/220MWe Hanasaari coal-fired combined heat and power (CHP) plant in downtown Helsinki power plant started to co-fire wood pellets at the end of 2015. Commissioned in 1974, the plant will be closed by the end of 2024 and the site repurposed as a residential/recreational area.

Yet, across another much larger pond, 28 cities in Northern China that are literally being asphyxiated by smog from the unfettered use of dirty fuels in inefficient and poorly regulated plants have agreed to a dramatic plan of action to curb air pollution. The plan includes banning the use of small coal-fired furnaces for winter heating, up to 50 percent production capacity caps in heavy industry such as steel manufacturing chemicals and aluminium for the coming winter season, if they don’t clean up their act in the meantime.

Science to policy

Meanwhile concurrently on March 29 in Brussels, at a comfortable distance from the distraction of cold boreal working forests in Finland, well-funded ENGO’s sought a cosy tete a tete at the European Parliament to discuss bioenergy sustainability. Hosted by MEPs Bas Eickhout (Greens / EFA) and Jo Leinen (S&D), the event “summarised the research behind the climate impact concerns raised on bioenergy”.

The breaks provided networking opportunities.

The breaks provided networking opportunities.

The topic and timing are both symbolic and symptomatic of the “narrow, selective and polarised” biomass carbon neutrality discussion, as Lauri Hetemäki, Assistant Director, European Forest Institute (EFI) described how these discussions tend to be – the recent Chatham House report a case in point. Hetemäki based much of his address explaining the key findings of the “Forest biomass, carbon neutrality, and climate change mitigation” synthesis report published in October 2016 by EFI.

– Assessing GHG balances and climate effects of forest bioenergy is essential for informed policy development and implementation, said Hetemäki.

However, as Hetemäki remarked, different studies, different perspectives, and different methodological approaches all give different and at times contradictory conclusions.

– On “carbon neutrality” of bioenergy there is no clear consensus among scientists, and their messages may even appear contradictory. Indeed the concept itself is ambiguous and the debate distracts from the broader and much more important question; how European forests and associated industries can contribute to climate change mitigation through carbon sequestration, carbon storage, and fossil fuel displacement while serving many other functions, Hetemäki said.

Political pricing

The benefit of the latter contribution, fossil fuel displacement, is something often omitted in discussions notwithstanding fossil switch-out, especially in the heating sector in countries like Denmark, Finland, and Sweden. However, the rate of fossil fuel displacement in the Lithuanian heat sector by predominately forest biomass, as presented by Vilma Gaubyte Director Lithuanian Biomass Association (LITBIOMA), is though remarkable and provides a comprehensive example to Hetemäki’s question in the Lithuanian context.

(Left) Harri Laurikka, Managing Director, Bioenergy Association of Finland (Bioenergia), Gustav Melin, Managing Director, Swedish Bioenergy Association (Svebio) and Vilma Gaubyte, Director, Lithuanian Biomass Association (LITBIOMA).

(Left) Harri Laurikka, Managing Director, Bioenergy Association of Finland (Bioenergia), Gustav Melin, Managing Director, Swedish Bioenergy Association (Svebio) and Vilma Gaubyte, Director, Lithuanian Biomass Association (LITBIOMA).

The driver has been “political pricing”. Not a carbon tax on emissions but the retail price of imported fossil gas that had nothing to do with market prices. Despite being one of the closest to the source of import, Lithuania has, according to Gaubyte, the highest prices on gas in the EU, four to five times higher than biomass. In 2004 fossil gas had an 84 percent share of the Lithuanian district heat market whereas biomass had 10 percent. In 2016 this had changed to with fossil gas having dropped to 32 percent and biomass increased to 65 percent.

– Thanks to “political pricing” we have since developed a domestic bioenergy industry based on our forests and agriculture. There are over 200 companies in the biomass to energy value chain that employ 7 500 staff and have a combined turnover in excess of EUR 400 million of which 25 percent is bioenergy technology export, said Gaubyte, adding that the average salary in the sector is 50 percent higher than the national average.

Although not explicitly mentioned by Gaubyte, it is worth pointing out that both forest cover and growing stock in Lithuania has increased over the period as well as other multiple uses of the national forest estate.

The post-conference tour included site visits to Neste's refinery in Porvoo and the Porvoo Energia biomass-fired district heating plant.

The post-conference tour included site visits to Neste’s refinery in Porvoo and the Porvoo Energia biomass-fired district heating plant.

It is a shame that MEP’s and ENGO’s elected to summarise “the research behind the climate impact concerns raised on bioenergy” in Brussels and not in Helsinki. A trip to this year’s Nordic-Baltic Bioenergy in HEL would certainly have been an opportune moment in a relevant context to iron out some of those concerns, in the conference room, in the forest and at the biomass plant.

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