Bioenergy is the largest indigenous energy source in the EU and plays an important role in the transition to clean energy from renewable sources. Sustainable bioenergy is an essential tool to achieve the Fit for 55 ambitions.
In order to facilitate a smooth transition to renewable energy, it is crucial that the European Union continues to provide support and a positive regulatory framework to technologies and practices that are enabling the green transition, including bioenergy which today accounts for 57,3% of renewable energy and 11,4% of overall energy consumption in the EU27. Bioenergy is also the largest indigenous energy source in the European Union with a higher production than coal, oil, or gas. When creating the Fit-for-55 package the EU will need to increase its climate ambition and ensure that all future legislation is non-discriminatory and limits the growth of regulatory burden. Additionally, it will be essential that the Fit-for-55 package includes all aspects of sustainability, particularly social, and that in line with its increased ambition it does not discriminate on feedstocks which could reduce bioenergy usage and jeopardise decarbonisation. Bioenergy Europe therefore encourages the Commission to employ these five guiding principles when creating the Fit-for-55 package.
1. Increase Ambition
Although 19,9% of the EU’s energy consumption came from renewable sources in 2019, the vast majority was still produced from fossil fuels. Three quarters of heating and cooling, which accounts for almost half of the energy consumed in Europe, still relies on fossil fuels. Moreover, 60% of heating and cooling appliances are inefficient and if they were labelled today under the ecodesign directive, they would be classified as class C, or lower. To reach the EU’s goal of reducing greenhouse gas emissions by 55% and limiting global warming to 1,5° C, it will be essential to phase out fossil fuel consumption, increase the scope of carbon pricing, and raise renewable targets, particularly in heating and cooling. In order to accomplish this, the EU should.
- End all direct and indirect subsidies for fossil fuels and phase out their use (ETD, EPBD).
- Increase and make binding the target for renewable heat solutions (RED).
- Increase the target for renewables in the transport sector (RED).
- Revise the Energy Taxation Directive which has remained unchanged since 2003 (ETD).
- Accelerate the modernisation and decarbonisation in the heating sector (CEEAG, ETD, EPBD).
- Accelerate decarbonisation mainly through a higher linear reduction factor in the ETS which will incentivise faster decarbonisation of the economy (ETS).
- Update and index the existing minimal ‘excise rates’ references to send a valid price signal (ETD).
- Revise the existing list exceptions which often facilitate the use of the fossil fuels (ETD).
Different legislation has the potential to discriminate against bioenergy in both the energy sector and the forestry sector. With regards to energy, subsidiarity is essential as the distribution of renewable energy differs across Europe, and it is crucial to keep in mind what works in one Member State might not work in another. This is especially true for biomass where different Member States utilise different bioenergy solutions with varied local impacts which makes it impossible to regulate at the EU level. All future decisions on renewable energy should be made in a technology neutral way allowing for different renewables to compete and ensure effective and complementary market solutions.
Bioenergy, which utilises wastes and residues from all parts of the forestry value chain should not be treated differently from other products in the sector. Forests are never planted for bioenergy purposes. Bioenergy does not drive harvest decisions for forest biomass and does not set the rules of the forestry sector. Thus, it is important that the rules for forest biomass do not change based on end use and remain the same throughout the forestry sector. Additionally, as bioenergy carbon emissions are counted in the LULUCF sector, it is important that it retains its zero-emission factor in the energy sector to avoid double counting of greenhouse gas emissions. In order to accomplish this, the EU should:
- Foster technology neutral aid guidelines (CEEAG)
- Modify the structure of energy excise duties for transport fuels from being based on volume to being based on energy and carbon content of the fuel. This to avoid discrimination against cleaner solutions (ETD).
- Retain the ‘zero emission factor’ for sustainable biomass (compliant with the sustainability criteria in the Renewable Energy Directive) within the EU ETS and continue to account for carbon emissions from bioenergy in the land-use, land-use-change, and forestry sector to avoid double counting (ETS, LULUCF).
- Avoid regulating the forestry sector through energy policy. Rather, take stock of agreed definitions and practices for forestry to keep the use of bioenergy sustainable (RED).
3. Limit the Growth of Regulatory Burden
The core principle of biomass sustainability should remain the risk-based approach which, as identified by the OECD, is the best practice for regulating sustainable supply chains. On the one side, market operators can rely on a more efficient and effective regulatory framework that can reduce cost-compliance for businesses; on the other side, the risk-based approach also ensures a minimisation risk on environmental impact. Introducing new criteria that are not in practice collected by operators would threaten the supply of source material and excessive red tape risks forcing significant numbers of small operators to switch back to fossil fuels, with negative implications for jobs and growth in rural areas. For small operators (few MW range), current cost compliance is estimated to be about 10% of their annual fuel cost. Cost-compliance and availability of data for small operators needs to be considered; including recognising that a retroactive application of existing GHG emissions requirements is not simply a cosmetic change to sourcing policy, it is also determined by the energy efficiency of the installation determined at the time of investment. This retroactive application would compromise business decisions taken under the current legal framework and disproportionally harm small and medium operators. In order to accomplish this, the EU should:
- Maintain the risk-based approach for sustainability criteria for biomass.
- Maintain its exemptions for small biomass installations with capacity under 20 MW.
- Avoid cumbersome requirements for feedstock that are challenging to implement through the application of RBA.
- Refrain from making GHG emissions saving criteria retroactive which would jeopardize some investments and attainment of higher renewable and GHG emissions savings objectives.
- Fully align CEEAG with REDII’s terms and definition. The EU Taxonomy delegated act, should not form the basis for any references or definition (CEEAG, RED).
4. Include All Aspects of Sustainability
Sustainability is a multifaceted concept that encompasses not only environmental considerations but also equally important socio-economic factors. The bioenergy sector in Europe employs more people than all other renewables combined, with employment concentrated in rural areas. In parallel, it contributes with €60,6 billion to Europe’s economy (2019) across a diverse value chain from forest management to cutting edge manufacturing.
Sustainability also concerns energy poverty and in 2018 almost 7% of EU households were unable to pay utility bills on time due to financial constraints, and in some Member States, this number can be more than 30%. In Lithuania for example, price of heating for citizens has decreased by 45% due to the shift from imported fossil gas to indigenous biomass, creating many new jobs and companies. Thus, when updating policies to be Fit-for-55 that leave no one behind, it is essential to also consider vital social impacts including energy poverty and employment. In order to accomplish this, the EU should:
- Ensure that any changes to current policies have rigorous evaluation of the social impacts.
5. No Discrimination on Feedstocks
Even positive measures, such as the cascading principle, can have unintended negative effects when they are too rigidly applied in legalisation as occurred in Sweden with the Wood Fibre Act of 1987. Overregulation of the sector distorted not only raw material markets, but also opportunities for expansion of production which led to the law’s repeal six years later. The EU should avoid feedstock discrimination as it neglects other important dynamics including local demand, undermines the efficiency of forest-based value chains, and ultimately risks the suboptimisation of the value of biomass as was also seen in the Flanders region in Belgium after the 2007 implementation of their national support scheme.
Moreover, it is unclear how this restriction could be applied in practice with the risk-based approach as it would necessitate the validation of a list of quality-related requirements for the feedstock rather than verifying a country (or forest level sourcing area’s) forest management legislation, monitoring and enforcement. It is important that there is enough flexibility for forest owners, so that trees that are damaged, misshapen, or undersized can still have a market value and interact with market demand.
- Avoid national caps on biomass for bioenergy (RED).
- Maintain the risk-based approach (RED)
- Maintain flexibility for Member States (CEEAG, LULUCF, RED)