The role of bioenergy in the future energy system

The forest sector, the bioenergy industry and the energy sector are all in large transition as results of climate change mitigation efforts, globalization and digitalization. In the coming decades, climate change and issues related to sustainable developments are likely major drivers that will strongly affect all these sectors. One key observation in BioNEXT is that demand for sustainable Nordic wood for various industrial applications is likely to increase towards 2050. The demand for printing paper will continue to fall, but large investments in the Swedish and Finnish forest industry in the ten-year period from 2013 to 2023 will still increase the total annual the need for wood in the Nordic countries by 20-25 million m3. These investments cause higher demand for Norwegian pulpwood, but it also implies that Norwegian biofuel investors should account for increased competition for raw materials in their investment plans. For Norwegian forestry, the increased demand for timber may imply that the harvested quantities will probably increase compared to the period 2000-2020. The timber volume in Norwegian forests (standing volume) will nevertheless continue to increase as a result of higher growth than harvest. Technology analyzes show that the production cost of wood-based liquid biofuels in the long run can decline towards to the costs of first-generation biofuels, but it is not likely that biofuels from wood will be economically competitive against competing fossil alternatives without significant policy instruments. The Norwegian biofuel blending requirement secures that a certain share of the transportation fuel comes from advanced biofuels, but it does not guarantee that it is produced in Norway. The competitive advantages and disadvantages of locating biofuel plants in Norway compared to neighboring countries is hence a key in assessing the Norwegian biofuel production opportunities. For large biofuel facilities, logistics costs could be higher in Norway due to higher transport costs for the raw material. In Sweden and Finland, there is a larger volume of by-products from sawmills and wood processing, but also high demand for biomass from other forest industries. The use of branches and tops and the use of several types of wood results in lower raw material costs for plants, but less homogeneous raw material also results in more demanding production processes. Feedstock cost is the largest cost component and a large-scale implementation of forest-based biofuel production. A large-scale implementation of forest-based biofuels will affect biomass markets in Norway and the other Nordic countries in multiple ways: (i) Harvest levels will increase, (ii) utilization of harvest residues will grow, (iii) import of biomass from other regions will increase and (iv) use of wood pulp and paper industries as well as district heating will decline. The sawmilling industry will, however, gain a net benefit because they can supply processing residues to bio-refineries. Low quality forest Biomass biomass may be used to produce power, heat or fuel for transportation. According to model based studies in BioNEXT, biomass used for heat in the Nordic region will replace some coal, but mostly natural gas and also reduce wind power investments. Biofuel Renewable liquid hydro carbons in for long distance transportation or aviation, or for certain industrial purposes, would may have a large impact on fossil fuel emission reductions also in the long run, if the biofuel replaces fossil transportation fuels. However, biofuel production is far more costly implying that the costs of emission reductions is higher for biofuels than for bioheat. In the restructuring of the forest industry, there is mutual competition between different new establishments, because each new plant will take a share of the raw material base. In a Norwegian perspective, it is thus important to invest early enough to secure positions in a possible future market, but at the same time choose solutions that are sustainable and financially robust in a long-term perspective. If there is not sufficient investment will and power, Norwegian forestry may remain a net exporter of pulpwood. Predictable and stable framework conditions are a prerequisite for investors to find it attractive to invest in large-scale biofuels. The existing wood processing industry has a high level of expertise in logistics and production, but the establishment of biofuel production will increase raw material costs for this industry. The lumber industry and fuel producers have clearer benefits from increased biofuel production. Therefore, the a possible establishment of the a NOrwegian biofuel industry will probably originate from new industrial constellations across national borders in the Nordic region.

The large number of invited presentations to industry events suggests that the results are both of interest and value to users. Of more specific activities can be mentioned: * T. F. Bolkesjø and J. Sandquist attended as experts in evaluating proposals for funding to biofuel plant in Innovation Norway. * The models developed in BioNEXT are being further refined and applied in FME Bio4Fuels and other projects * E. Trømborg has participated in the expert group of Prosess21 and informed about BioNEXT results. * Insights from BioNEXT has been utilized in large Nordic projects such as ?Flex4RES? and "Nordic Clean Energy Scenarios 2020". The project can report the following outcomes and expected impacts * 11 journal articles * 3 project reports * 10 popular scientific articles or newspaper chronicles * More than 20 presentations at scientific and industry events * Project results are presented to master students at NMBU and BI * 3 industry oriented seminars

Bioenergy is envisioned a major role in future renewable energy systems: Biofuels for transportation is one of few alternatives to fossil fuels in heavy-duty transportation and aviation, and bioenergy for heat and electricity may provide energy security and flexibility in the future electricity system. However, setbacks in the forest sector during the previous decades have left Norway with industrial decline and extensive unexploited forest resources. Ambitious policy visions have been flagged for industrial revival with bio-energy as a major component, but the question remains whether and how the bioenergy complex will be able to grasp these opportunities. The BioNEXT project investigates how emerging opportunities within new technologies, evolving markets and new regulatory frameworks can facilitate the development of an economically viable bioenergy industry by: 1) Exploring the premises for industrial development of the forest-industrial bioenergy complex 2) Identify how different bioenergy solutions can benefit the future energy system, contribute to GHG reduction targets and have synergies with the forest industry 3) Develop policy guidelines enabling a successful development of value chains with large societal benefits. BioNEXT develops and applies a multidisciplinary research strategy that combines technical analysis, economic analysis of market and policy frameworks with forest and energy sector modelling that quantifies impacts. The project will develop novel quantitative bioenergy sector models that couple the entire forest and energy sector and are designed to assess the economic viability, the societal benefits and the impacts of policies for different bioenergy pathways in the future energy systems. The project includes one PhD in addition to the involved researchers at NMBU, BI, SINTEF, Utrecht Univ. and Linneus Univ. The industry partners consist of major stakeholders covering the forest bioenergy value chain.