Keywords

Bioeconomy; biobased economy; bioenergy; IEA Bioenergy

1.1 Introduction

Reducing and replacing the utilization of fossil resources is among the most critical challenges in transforming the current energy supply system and consumption patterns (IEA, 2014; IPCC, 2014). Although the exploration of unconventional fossil resources (shale gas, tar sand, etc.) has expanded the spectrum of exploitable resources, fossil resources remain finite and are not readily renewable. The observed increase in global mean surface temperature over the past decades is very likely due to anthropogenic greenhouse gas (GHG) emissions (IPCC, 2007, 2014). It is generally assumed that GHG-induced climate change can be mitigated by efficiency improvements, sequestration of CO₂, and by shifting from fossil primary energy resources to a variety of renewable resources (Trainer, 2010). Facing a shortage of petrochemicals in the long term, biomass is expected to be the main future feedstock for chemicals, including liquid transportation fuels (Langeveld et al., 2010). Currently, biomass is mainly used for food, feed, and material purposes; only a small fraction is used in energy conversion (ie, heating/cooling, power, or transport fuels).

The “bioeconomy” refers to the set of economic activities that relate to the invention, development, production, and use of biological products and processes (OECD, 2009). Within the context of this work, bioeconomy is defined as the economic, environmental and social activities associated with the production, harvest, transport, preprocessing, conversion, and use of biomass for biopower, bioproducts, and biofuels. Within a future bioeconomy, biomass will be used for the sustainable and synergetic production of food, feed, bioenergy (power, heat, and biofuels) and biobased products (chemicals and materials) (Bell et al., 2014; NEA, 2014). The main industrial sectors likely to be involved in the future bioeconomy are agriculture and forestry, and include their related processing industries (eg, food and feed, pulp and paper, etc.), plus chemicals and materials (Fig. 1.1). The production of biobased materials is not new. However, the majority of fuels, nitrogen fertilizers, organic chemicals, and polymers are still derived from fossil-based feedstock, predominantly oil and gas.

1.2 Status of Bioeconomy Strategies in IEA Bioenergy Member Countries

The transition from an economy based on fossil raw materials to a bioeconomy, obtaining its raw materials from renewable biological resources, requires concerted efforts by international institutions, national governments, and industry sectors, and prompts for the development of bioeconomy policy strategies. In 2012, the European Commission (EC) launched a new strategy on the bioeconomy (EC, 2012). In this communication, the EC states that Europe needs to radically change its approach to production, consumption, processing, storage, recycling, and disposal of biological resources, in order to cope with an increasing global population, rapid depletion of many resources, increasing environmental pressures, and climate change.

The current progress and priorities of such strategies worldwide are summarized in the following as result of a survey in the 22 member countries of the IEA Bioenergy Implementing Agreement (Fig. 1.2, Table 1.1). The survey (Beermann et al., 2014) is based on information and documents available up to September 2014.

The focus of the survey was on official governmental bioeconomy policy positions, with regional and industry strategies serving as additional evidence for the current state of bioeconomy development in a country. Strategy documents provided by the IEA Bioenergy country representatives were analyzed in a framework of questions to compare patterns as the definition and scope of bioeconomy, vision and (measurable) targets, economic sectors in the focus of the strategies, current focus of implementation, and the position of bioenergy in a future bioeconomy.

It was found that the following five countries have official governmental bioeconomy policy strategies (with typical elements as objectives, focus of action, activities/measures, targets):

Furthermore, the following eight countries had governmental interest in the topic of bioeconomy, although no national strategy yet existed, but national blueprints, green economy strategies, or strategies for a biobased industry:

Additional findings of the study include that bioeconomy development is almost always a top-down, policy-driven process. A regional, bottom-up development approach was found in Australia, Belgium, Canada, Japan, and Sweden. Most strategies formulate a bioeconomy vision and general targets, and measurable policy targets have been defined in strategy documents of Canada, Finland, the Netherlands, and the US. Research and development (R&D) measures in all countries focus on sustainable biomass supply and bioenergy production. In most of the countries (80% of those polled) the chemical sector is identified as a priority area for the transition to a bioeconomy. The energy sector is important in all national transition strategies, in most (65% of those polled) cases biomass for bioenergy has an equal position to other economic sectors in the bioeconomy. Bioenergy as future priority use of biomass was found in Australia, Brazil, Denmark, Italy, Japan, and the US. Biorefining is often identified as a key technology for successful bioeconomy deployment. For market deployment, all countries focus on research and development, 70% on measures for transition to market, and 25% on additional policy development.

1.3 Scope, Objective, and Outline

Despite the vast amount of politically driven strategies, there is still little understanding on how current markets will transition towards a national and essentially global bioeconomy. This joint analysis brings together expertise from three IEA Bioenergy subtasks, namely Task 34 on Pyrolysis, Task 40 on International Trade and Markets, and Task 42 on Biorefineries. The underlying hypothesis of the work is that bioeconomy market developments can benefit from lessons learned and developments observed in bioenergy markets. The question is not only how the bioeconomy can be developed, but also how it can be developed sustainably in terms of economic (eg, risk reduction and piggybacking on existing industry) and environmental concerns (eg, nonfood biomass-based). The strength of bringing three IEA Bioenergy subtasks into this analysis is found in each task’s area of expertise. Tasks 34 and 42 identify the types of biorefineries that are expected to be implemented and the types of feedstock that may be used. Task 40 provides complementary work including a historical analysis of the developments of biopower and biofuel markets, integration opportunities into existing supply chains, and the conditions that would need to be created and enhanced to achieve a global biomass trade system supporting a global bioeconomy. It is expected that a future bioeconomy will rely on a series of tradable feedstock intermediates, that is, commodities. Investigating the prerequisites for such a commoditization, and lessons learned by other industries play a central role in this analysis.

The analysis covers an overview of biorefineries in a global biobased economy, identifies feedstock and conversion pathways, and outlines the status of demonstration plants and underlying economics. It brings together lessons learned and case studies from the biopower and biofuel markets and covers a brief historical description of international bioenergy trade and markets and links these and future developments to biomass preprocessing options. Furthermore, it bridges current to future bioeconomy-related markets by identifying and describing logistical integration opportunities. Several case studies of existing supply chains in the bioenergy markets are analyzed with respect to increased volume and end-use markets. Chapter “Commoditization of Biomass Markets” analyzes market factors necessary for commoditization. The analysis also portrays potential transition strategies from the current, conventional bioenergy markets, to advanced, large-scale, increased-volume trade required for a global bioeconomy. The emergence or deployment of the future bioeconomy will depend on the ability to achieve commodity-type, tradable feedstock intermediates. The transition towards such a system will need to bridge logistical as well as market structures. This analysis provides suggestions on how this could be done and what prerequisites are necessary.

The report starts with an overview of biorefineries in a global bioeconomy, identifying feedstock and conversion pathways (see chapter: Development of Second-Generation Biorefineries), and outlining the status of demonstration plants and underlying economics (see chapter: Biorefineries: Industry Status and Economics).

Chapter “Sustainability Considerations for the Future Bioeconomy” presents sustainability aspects that relate to biomass use within the future bioeconomy. It draws upon lesson learned from the biofuel and food systems.

Chapter “Biomass Supply and Trade Opportunities of Preprocessed Biomass for Power Generation” follows, bringing together lessons learned and case studies from the biopower and biofuel markets. It also covers a brief historical description of international bioenergy trade and markets and links these and future developments to biomass preprocessing options.

Chapter “Commodity Scale Biomass Trade and Integration With Other Supply Chains” bridges current to future bioeconomy-related markets by identifying and describing logistical integration opportunities. Several case studies of existing supply chains in the bioenergy markets are analyzed with respect to increased volume and end-use markets.

Chapter “Commoditization of Biomass Markets” analyzes market factors necessary for commoditization. It is based on case studies of the grain industry and financial markets.

The book closes with chapter “Transition Strategies—Resource Mobilization Through Merchandisable Feedstock Intermediates,” which details potential transition strategies from current, conventional bioenergy markets, to advanced, large-scale, increased-volume trade required for a global bioeconomy.