1. European Biomass Industry Association EU Biomass Industry: Targets & Directives from the EC, on R.E. Technology, Business Opportunities and Market Challenges Mr. Giuliano Grassi Secretary General, European Biomass Industry Association (EUBIA) 27 April 2010 BIOMASS STAKEHOLDERS FORUM

2. European Biomass Industry Association Biomass process technologies business technologies World wide interest for Biomass resources is now emerging because : Its potential is considerable Biomass is able to penetrate all energy sectorial markets, but economic constraints still limits its general deployment Many benefits (socio, economic, environmental, diversification of energy supply, rural development etc…) related to possible modern large use of biomass has generated strong interest and support of political decision makers. However is vital to : 1- Promote efficient but sustainable bioenergy schemes 2. Plan Large Investments Context:

3. European Biomass Industry Association Worldwide biomass resources World biomass production: - Terrestrial: ~ 80 B TOE/y - Acquatic: ~ 20 B TOE/y Worldwide biomass stock: ~ 370 B TOE/y Estimation of world biomass potential ( year 2100): - Biomass potential: ~ 6.6 B TOE/y - Ultimate future potential (max):~ 28.3 B TOE/y Total Energy consumption (2000): ~ 9.9 B TOE/a Total electricity consumption (2040): ~ 37000 TWh B TOE: Billion of Tonnes Oil Equivalent (1 TOE ~ 2,4 t dry biomass) Total nuclear energy supply in year 2000: 638 MTOE/y in year 2020: 690 MTOE/y

4. European Biomass Industry Association European biomass resources Biomass potential (2050) - UE-15 ~ 500 M TOE/y - UE-27 ~ 600 M TOE/y EU guideline regarding biomass use: - for 2010 ~ 135 M TOE/y - for 2020 ~ 220 M TOE/y EEA (2030 estimated potential) ~ 300 MTO/y Current consumption (EU-15; 2001): - Primary energy: ~ 1486 M TOE/y - Biomass: ~ 57 M TOE/y M TOE: Million of Tonnes Oil Equivalent (1 TOE ~ 2,4 t dry biomass) (3.8%)

5. European Biomass Industry Association Conflicts and lands for food / bioenergy production From preliminary evaluations it seems that risk of conflicts for land use will arise in general only when the rate of contribution of bioenergy to the > 30% Total worldwide cropland is in fact ~ 2 billion ha. Present utilization is ~ 750 mio ha, but should increase to ~ 1 050 billion ha (in year 2025) for the population increase, living thus 0.95 billion ha for potential bioenergy production (~ 5 billion TOE/y) based on present knowledge and practice. However, modern molecular biotechnology could change this present limitations, modifying the metabolism of dedicated energy crops and increasing the photosynthetic efficiency of crops (rather modest now : 2-2.5 % for good crops : like sugar-cane, sweet- sorghum, etc …) Use of most agriculture residues (~ 80% of total) should be promoted because emerging technology for its stabilization & modern use is now appearing on the market (agro-pellets)

6. European Biomass Industry Association Water resources on the globe Water availability is an important constraint: (1kg of dry biomass requires 200-1,000 kg of water!) x 1000 cubic meter / person

7. European Biomass Industry Association GLOBAL VULNERABILITY TO DESERTIFICATION 0.755 billion ha available for Energy-crops. Total desert area: ~ 1,800 million ha. Actual loss of agriculture land: about 12 million ha/year. Loss of Agriculture area for salted water irrigation:1/2 million ha/year. 1.8 6.24 2.1 1.75 1.61 (700 million ha in coastal areas) 2,05 billion(3.2 with

8. European Biomass Industry Association RES Electricity Targets TYPE OF ENERGY1997 Eurostat TWh 2004 Eurostat TWh AGR 2000- 2004 % DIRECTIV E TARGET 2010 TWh AGR NEEDED 2004- 2010 % Biomass28.867.913.0 Wind7.358.534.6 Photovoltaics0.050.7447.0 Geothermal4.05.54.7 Total RES without Hydro40.0132.618.737118.7 Hydro310.4303.8-0.33562.7 Total RES350.5436.43.87258.8 Total Electricity2,7403,1792.13,4561.4 Renewables’ Share Without Hydro% 1.54.2-10.7 Renewables’ Share %12.313.7-2121

9. European Biomass Industry Association Biofuels Targets 2000 Eurostat 2004 Eurostat AGR 2000- 2004 DIRECTIVE TARGET 2010 AGR NEEDED 2004-2010 Mtoe % % Biofuels0.632.135.118.043.0 Gasoline and oil demand 277.32901.13131.3 Biofuels’ Share %0.20.72-5.75

10. European Biomass Industry Association Contribution of Renewables to Heat Production (1995-2020) 2004 Eurostat Mtoe 2010 Projections Mtoe 2020 Projections Mtoe Biomass48.465105 Solar thermal0.68212 Geothermal1.548 TOTAL RES HEAT50.681125 Total Heat Generation (Trends to 2030)440467488 Share of RES11.5%17.3%25.6%

11. European Biomass Industry Association Contribution of Renewables to Transport Fuel Production 2000 Eurostat2004 Eurostat Projection 2010 Projection 2020 Mtoe Biofuels0.632.118.040.0 Gasoline and oil demand (Trends to 2030-Baseline) (Combined RES and EE) 277.3 290313 311.5 332 312 Biofuels’ Share %0.20.725.7512.0-12.8

12. European Biomass Industry Association Contribution of RES to Primary Energy Production Eurostat Convention (Mtoe) 2004TARGETS 2010TARGETS 2020 TYPE OF ENERGYEurostat Convention % of Total Eurostat Convention % of Total Eurostat Convention % of total Total Gross Inland Consumption 1,7471,761 (Combined RES and EE) 1,633 (Combined RES and EE) Wind5.030.2915.40.8743.91.69 Hydro26.131.5030.61.74332.02 Photovoltaics0.060.80.055.30.32 Biomass71.94.111257.1023514.4 Geothermal5.360.318.20.4616.41.00 Solar Thermal0.680.0420.11120.73 Solar Power00.20.010.80.05 Ocean0.250.011.30.08 Total Renewable Energies 109.166.25182.410.434821.3

13. European Biomass Industry Association EU-25 RE Contribution Year 2002 Biomass 65 MToe Hydro 25 MToe Wind 4 MToe Geothermal 4 MToe TOTAL 98 MToe/y White paper targets for EU-15 = 135 MTOE/y (in 2010) Adjusted paper targets for EU-25 = 150 MTOE/y (in 2010) Current Trend : 75-80 MTOE/y (in 2010) Biomass is lagging behind other RE with risk of missing the 2010 targets

14. European Biomass Industry Association Renewable Energy Roadmap by the European Commission 20 % binding overall RES target for EU by 2020 20% of CO2 emission reduction 20% energy saving

15. European Biomass Industry Association

16. Targets: HorizonReferencesEU RES TargetEU RES - E TargetEU RES - H TargetEU RES - T Target 2010 White Paper (1997) RES E Directive (2001) RES T Directive (2003) 12% non binding (*) 21% non binding (**)-5,75% (**) 2020 New RES Directive 2009 20% binding (*) 34% non binding (***) 18% non binding (***) at least 10% in each MS Source: Tractebel / GDF Suez

17. European Biomass Industry Association

23. Present Emerging Economic Opportunities  Heat production  Cogeneration (decentralized production with green-certificate availability)  Cofiring (centralized production with CO2-credits)  Transport biofuels, in particular : Bioethanol Biodiesel Biogas (most of this activities benefit of economic support measures)  Bio hydrogen (industrial quality)

24. European Biomass Industry Association Future Economic Opportunities for Bioenergy Assuming an import price for : Oil = 70 $/bbl* Natural Gas = 250 €/ 1.000 m3 (300 €/TOE) The level of competitiveness for biofuels is around : ~ 50 €/dryt (solid biomass) ~ 450 €/TOE (liquid biofuels for transport) * A price of ~ 100 $/bbl could become a reality around the year 2030

25. European Biomass Industry Association World CO2 Emissions from different sectors (IEA). TOTAL 2005 = ~ 22 Bill ton CO 2 /y. 2010 = ~ 30 Bill ton CO 2 /y. 2020 = ~ 38 Bill ton CO 2 /y. 2030 = ~ 44 Bill ton CO 2/ y.

26. European Biomass Industry Association Stationary Plants with high CO2 Emissions Cement Factories : ~ tCO 2 /tCement (i bill t cement/y). Steel Factories:~ 3tCO 2 /tsteel (1.2 bill steel/y). Power Plants (coal): ~ 1kg CO 2 / KWhe (18000 bill Kwhe/y). Oil Refineries: ~ 0.5 tCO 2 /t oil (3.5 bill t/y).

27. European Biomass Industry Association Mitigation of CO2 Emissions I.Efficiency Improvement: processing & use; II.CO 2 storage, but is an expensive solution : (i.e. 100% increase of electricity production in conventional coal power-plants~ 17% of electricity loss). (~ 300-400€/tCO 2 avoided in transport). III.Deployment of R.E.; Solar-wind Hydro-Biomass. Modern Biomass will play a crytical rôle: already is providing a good contribution having increased its acquatic-terrestrial carbon sink (due to the CO 2 fertilisation effects) reducing thus,its accumulation level into the atmosphere from ~ 22 Bill ton/y to ~ 12 Bill t/y. In Future large-scale vegetation in marginal lands and surplus agric.lands for production & substitution of modern biofuels to fossil-fuels. NOTE : An area of ~ 400 million ha of land cultivated by well selected C-4 crops could be able to absorb the CO 2 annual increase in the atmosphere.

28. European Biomass Industry Association Thank you for your attention! EUBIA Rue d’Arlon, 63-65, B-1040 Brussels, Belgium eubia@eubia.orgeubia@eubia.org; www.eubia.orgwww.eubia.org Mr. Giuliano Grassi - Secretary General European Biomass Industry Association (EUBIA)