BIOENERGY

A wide range of biological feedstocks can be converted via a number of different processes into thermal energy, electricity and fuels for transport (biofuels). Many bioenergy conversion pathways are well established and fully commercial, while others are still at the early stages of development, demonstration and commercialisation.1

Bioenergy Markets

Bioenergy makes the largest renewable contribution to global energy supply. Including the traditional use of biomassi, bioenergy contributed an estimated 12.4% – or 46.0 exajoules (EJ) – to final energy consumption as of the end of 2017.2 Modern sustainable bioenergyii (excluding the traditional use of biomass) provides around half of all renewable energy in final energy consumption.3

In 2017, modern bioenergy contributed an estimated 5.0% to total final energy consumption (TFEC).4 ( See Figure 18.) It contributed an estimated 13.3 EJ to the global supply of heat (5.0% of the heat total), 3.5 EJ in transport (3.0% of the transport total) and 1.6 EJ to global electricity supply (2.1% of the electricity total).5 Modern bioenergy use is growing most quickly in the electricity sector (at around 9% per year), compared to around 7% in the transport sector; its use for heating is growing more slowly, at around 1.8%.6

Figure 18
image
Source: Based on OECD/IEA. See endnote 4 for this section.

Bio-heat Markets

Bioenergy – in the form of solid fuel (biomass), liquids (biofuels) or gases (biogas or biomethane) – can be used to produce heat for cooking and for heating residential spaces and water, either in traditional stoves or in modern appliances such as pellet-fed central heating boilers. At a larger scale, bioenergy can provide heat for public and commercial buildings as well as for industry. Bioenergy also can be used to co-generate electricity and heat via combined heat and power (CHP) systems to serve residential, commercial and industrial buildings – either on-site or distributed from larger production facilities via district heating and cooling systems.

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The traditional use of biomass to supply energy for cooking and heating in simple and usually inefficient devices, mostly in developing and emerging economies, is still the largest use of bioenergy.7 ( See Figure 18.) Given the serious negative health impacts of traditional biomass use, the effects on local air quality and the unsustainable nature of much of the supply of this biomass, efforts are being made to reduce the use of traditional biomass in the push to improve access to clean fuels. ( See Distributed Renewables chapter.)

Because the supply of biomass for traditional use is informal, obtaining accurate data on this usage is difficult.8 The amount of biomass used in traditional applications has been largely stable in recent years, totalling an estimated 27.5 EJ in 2017.9 However, the share of traditional biomass in TFEC has been declining gradually for several years, from 8.8% of global consumption in 2006 to 7.6% in 2017.10 ( See Figure 2 in Global Overview chapter.)

The use of modern bioenergy for direct heat production has grown only around 1.8% annually on average since 2006, mainly because of a lack of policy interest.11 Use of modern bioenergy in district heating – where bioenergy provides 95% of the renewable energy used – grew more rapidly, at more than 5% annually during the period 2006-2017.12 In 2017, modern bioenergy applications provided an estimated 13.3 EJ of heat, including 0.9 EJ provided by district heating; of this total, 8.0 EJ is consumed in industry and the rest in buildings.13

Europe is the largest consumer of modern bio-heat by region. European Union (EU) member states have promoted the use of renewable heat in both buildings and industry in order to meet mandatory national targets under the EU Renewable Energy Directive.14 Bioenergy use for heat production in the region rose at an average rate of around 2.2% annually between 2012 and 2017, and totalled an estimated 4.0 EJ in 2018.15 Other major users of bioenergy for heat include the United States (1.8 EJ), Brazil (1.6 EJ) and India (1.6 EJ).16 China also is expanding its use of biomass for heating in both the industry and buildings sectors.17

Globally, modern bioenergy provided around 4.0% of the energy used for heating buildings in 2017.18 Modern use of bioenergy for heating in the buildings sector is concentrated in the EU.19 In 2016, the region accounted for some 46% of all bioenergy used for heat in individual buildings, and for an even higher share of global bioenergy use in the residential sector (54%); together, Italy, France and Germany accounted for 44% of the global total.20

The market for pellets for heating residential and commercial buildings is based mainly in Italy, Germany and Sweden. The use of wood pellets in stoves for residential heating (rather than for boiler systems) has grown rapidly in France and Italy in recent years.21 Sweden and Finland lead globally in the use of bioenergy in district heating schemes, but this practice also is widespread in other countries, including Denmark and Lithuania.22

North America followed the EU for bioenergy consumption in buildings. In 2017, more than 2 million US households (2% of the total) used wood or wood pellets as their primary heating fuel, and a further 8% of households used wood as a secondary heat source.23 In the industry sector, heat supplied from bioenergy accounted for some 6.1% of all heat consumption.24 Generally, the use of bioenergy has been concentrated in industries where biomass residues are created as part of the production process – such as pulp and paper (where bioenergy provides 30% of energy needs), food, tobacco, and wood and wood products.25

Bioenergy can deliver low-temperature heat for heating and drying applications, as well as high-temperature process heat – either through direct use of the fuel or by gasifying the biomass and using the resulting fuel gas. However, very little bioenergy is used in the more energy-intensive industrial sectors where very high-temperature heat is required, such as iron and steel and chemicals; in these sectors, lower-cost, higher energy density fossil fuels usually are preferred.26

One exception is the cement industry, where wastes and biomass can substitute for the coal that typically is used in cement production. The extent of this substitution varies by region: for example, the EU’s cement industry is the largest user of wastes and biomass, especially in Germany and the United Kingdom. As coal replacement in the EU has grown, the level of substitution in the region’s cement sector reached 25% in 2018, compared to only 15% in Brazil.27 In India and China, the two largest global cement manufacturers, only low levels of substitution have been achieved, although in 2018 the use of wastes and biomass in clinker production was being considered as part of the evolving waste management strategy in both countries.28

Bio-power Markets

Global bio-power capacity increased an estimated 6.5% in 2018 to 130 gigawatts (GW), up from 121 GW in 2017.29 Total bioelectricity generation rose 9%, from 532 terawatt-hours (TWh) in 2017 to 581 TWh in 2018.30 The EU remained the largest generator by region, with generation growing 6% in 2018, stimulated by the Renewable Energy Directive.31 Other trends of previous years continued: generation grew most rapidly in China – up 14% in 2018 – and in the rest of Asia (16%), while generation in North America remained essentially stable.32 ( See Figure 19.)

Figure 19
image
Source: See endnote 32 for this section.

China maintained its position as the largest country producer of bioelectricity, followed by the United States.33 The other major producers in 2018 were Brazil, Germany, India, the United Kingdom and Japan.34

Europe continued to lead regionally in bioelectricity production, with capacity rising from 39 GW to 42 GW during 2018 and generation increasing 6% to 196 TWh.35 However, in Germany, Europe’s largest bioelectricity producer (primarily from biogas), generation rose less than 1%, to 51 TWh.36 This continued Germany’s slow growth trend that began in 2014, when feed-in tariff (FIT) rates for bioelectricity generation became less favourable.37 In the United Kingdom, bio-power capacity increased 30% to 7.7 GW, due primarily to the conversion of coal capacity to use imported biomass fuels, and generation rose 11% in 2018, to 35.6 TWh.38 Generation also increased strongly in the Netherlands (8%) and France (5%).39

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In China, bio-power capacity increased 21% to 17.8 GW in 2018, growing in line with the provisions of the country’s 13th Five-Year Plan (2016-2020).40 Generation continued to grow strongly as well, increasing 14% to 91 TWh.41 Elsewhere in Asia, India’s bio-power capacity increased 16% to 10.2 GW and generation rose 4% to 50 TWh.42 Capacity and generation growth also remained strong in Japan, where the capacity of dedicated biomass plants increased 11% to reach 4 GW and generation totalled some 29 TWh in 2018 (a 25% increase from 2017), stimulated by a generous FIT.43 Biomass generation increased 50% in the Republic of Korea (to 11.2 TWh) and 39% in Thailand (to 14 TWh), and it doubled in Vietnam (to 0.5 TWh).44

The United States had the second-highest national levels of bio-power capacity (16 GW) and generation (69 TWh) in 2018.45 However, generation did not increase during the year and has not grown significantly over the last decade, due to a lack of strong policy drivers and to increasing competition from other renewable generation sources.46 In some cases, biomass generation plants were closed down when supply contracts were not renewed.47

Brazil is the third-largest producer of bioelectricity globally and the largest producer in South America. In 2018, the country’s capacity reached 14.7 GW and generation rose 9% to 54 TWh.48 Most of the bioelectricity generation is from sugarcane bagasse (fibrous sugarcane waste).

Transport Biofuel Markets

In 2018, global production of all biofuels increased nearly 7% compared to 2017, reaching 153 billion litres (equivalent to 3.8 EJ).49 The United States and Brazil dominated production – together producing 69% of all biofuels in 2018 – followed by China (3.4%), Germany (2.9%) and Indonesia (2.7%).50 ( See Reference Table R14.)

The main biofuels produced are ethanol (produced mostly from corniii, sugar cane and other crops) and biodiesel (fatty acid methyl ester, or FAME, fuels produced from vegetable oils and fats, including wastes such as used cooking oil).51 In addition, the production and use of diesel substitute fuels – made by treating animal and vegetable oils and fats with hydrogen (hydrotreated vegetable oil (HVO) and hydrotreated esters and fatty acids (HEFA)) – is growing. In 2018, ethanol accounted for an estimated 63% of biofuel production (in energy terms), FAME biodiesel for 31% and HVO/HEFA for 6%.52 ( See Figure 20.)

Figure 20
image
Source: See endnote 52 for this section

The contribution from biomethane is also increasing rapidly in some countries. Nevertheless, it represented less than 1% of the biofuel total in 2018, and other advanced biofuels had shares below 0.5%.53

Production, consumption and trade in biofuels are affected by numerous factors, including biomass growing conditions (such as the weather), the demand for biofuels in the producing countries, and import markets, which are influenced by policy developments. Changing import tariffs and other measures also affect international trade in biofuels.54

The biofuel market is driven strongly by the policy and regulatory regimes within regions and countries. In the United States, for example, the Renewable Fuel Standard (RFS) has driven the market by setting an overall obligation at the federal level to use low-carbon fuels.55 Synergies exist with state-level initiatives such as California’s Low Carbon Fuel Standard, which incentivises the development and use of fuels that can provide lower levels of greenhouse gas emissions.56 In Brazil, the RenovaBio initiative has played a strong role in increasing the domestic use of biofuels.57

In Europe, the revised EU Renewable Energy Directive for 2020-2030, approved in December 2018, sets a target for a 14% share of renewable energy in the transport sector by 2030, with a sub-target of at least 3.5% use of advanced biofuels and biomethane.58 The Directive also places a 7% cap on the share of the overall target that can be met by conventional biofuels based on feedstocks that also could be used as food, reflecting EU concerns about competition between food and fuel and about potential indirect land-use change impacts.59

In India, biofuels are being given greater priority, with a medium-term emphasis on advanced biofuels that can use as feedstock the country’s widespread agricultural residues.60 In China, the use of ethanol in petrol is being expanded by initiating blending mandates in every province by 2020, and advanced biofuel technologies and the large-scale production of cellulosic ethanol are expected to play an important role by 2025.61

Global annual ethanol production increased more than 7% during 2018, from 104 billion litres to 112 billion litres.62 Ethanol production remains concentrated in the United States and Brazil, which together accounted for 83% of the global total that year (a similar share as in 2017).63 The next-largest producers were China, Canada, Thailand and India.64

US ethanol production rose 1.7% to a record 61 billion litres during 2018, following a good corn harvest.65 While demand for ethanol in the United States plateaued as blending limits were approached, a record volume of the fuel (10.6% of total production) was exported.66 The top five importers of US ethanol were Brazil, Canada, India, the Republic of Korea and the Netherlands, followed by a further 75 importing countries.67 Ethanol production in Canada, which ranked fourth globally in 2018, increased 7% to 1.9 billion litres.68

Ethanol production in the United States and Brazil accounted for

83%

of the global total.

In Brazil, ethanol production increased 15% to a record 33 billion litres.69 Not only did low global sugar prices favour production of the fuel, but ethanol also benefited from lower federal taxes and rising global oil prices, which gave it a price advantage and contributed to an increase in domestic demand.70

Although most of the ethanol produced in Brazil was used domestically, some was exported. Ethanol production grew 25% in China during 2018, to an estimated 4.1 billion litres.71 To reduce oil imports and make use of excess grain stocks, a 10% ethanol blend was introduced in additional provinces, helping to increase demand.72 China’s ethanol production was based largely on the use of corn in the country’s north-east, although the fuel also was produced from cassava in the south.73

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In Thailand, the fifth-largest producer, production increased 23% to 1.5 billion litres.74 Ethanol production also grew sharply in India (70%), the sixth-largest producer, reaching 1.4 billion litres in 2018.75 The growth was stimulated by changes in regulations surrounding the feedstocks that can be used for ethanol production in India – particularly by allowing greater use of molasses – as part of a national effort to boost biofuel production as a means to reduce oil imports.76

Global production of biodiesel also increased in 2018, up around 5% to 41.3 billion litres.77 Biodiesel production is more geographically diverse than ethanol production (due to policy priorities) and is spread among many countries. The top five countries in 2018 accounted for 53% of global production.78 Europe was the largest biodiesel producer by region, and the leading country producers were the United States (17%), Brazil (13%), Indonesia (10%), Germany (8%) and Argentina (5%).79

Europe produced some 15 billion litres of biodiesel in 2018. Although the market did not contract, production was down 6% relative to 2017 as producers faced increased competition from less-expensive biodiesel imported from Argentina and Indonesia.80 Germany was again the largest producer in Europe, but the country’s production fell 3% to 3.5 billion litres.81 Production also declined in other major European producers: France (which produced a total of 2.2 billion litres), and the Netherlands (1.9 billion litres).82

The global increase in biodiesel production was due mainly to growth in the United States, where production rose 14% to a record 6.9 billion litres.83 Factors behind this growth included a good soya crop, increased opportunities for biodiesel in the RFS, and the impact of US anti-dumping duties, which constrained imports from Argentina and Indonesia.84

Biodiesel production in Brazil increased 13% in 2018 – a similar growth rate as in 2017 – to a record 5.3 billion litres.85 Contributing factors included a good soya harvest and an increase in the biodiesel blending level in diesel from 8% to 10% in March 2018.86 In Argentina, biodiesel production fell 15% to 2.8 billion litres, due in part to the US anti-dumping duties on biodiesel imports (Argentina’s largest market) and to uncertainties about whether the EU would re-apply similar duties to its imports of the fuel.87

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In Indonesia, production rose 30% to 4.1 billion litres in 2018.88 The rise was due to higher domestic use following an increase in the blending levels in order to utilise surplus palm oil production. The mandate for blending biodiesel with fossil diesel was increased to 20% for both the transport and power sectors.89 In addition, new mandates were introduced requiring 5% blending in fossil diesel used in the rail sector and 10% in the mining sector.90

After ethanol and biodiesel, HVO/HEFA accounts for most of the remaining biofuels consumed in the transport sector. The use of HVO/HEFA is concentrated in Finland, the Netherlands, Singapore and the United States.91 Global HVO production grew an estimated 12% during 2018, from 6.2 billion litres to 7.0 billion litres.92

Biomethane is used for transport mainly in the United States and Europe. The United States is the largest producer and user of biomethane for transport, and domestic production of the fuel has increased since 2015, when biomethane was first included in the advanced cellulosic biofuels category of the RFS, thereby qualifying for a premium.93 US biomethane consumption grew more than seven-fold between 2014 and 2017 and then increased another 13% in 2018 to some 22 petajoules (PJ).94

The United States produced

7.3

million tonnes

of wood pellets in 2018.

In Europe, the other globally significant market for biomethane for transport, consumption increased 13% in 2017, to 7.8 PJ (latest data available).95 Production and use were concentrated in Sweden (5.2 PJ), where methane production from food wastes is encouraged as part of a sustainable waste reduction policy and where the use of biomethane in transport fuel is prioritised over its use for electricity production or for injection into gas grids.96 The next-largest European users of transport biomethane in 2017 were Germany (1.6 PJ), Norway (0.42 PJ) and the Netherlands (0.23 PJ).97

Biofuels of all types have been used principally for road transport. The total quantity of biofuels used in aviation and shipping has been very small (only 0.1% of all airline fuel in 2018), although these applications are seen as a long-term priority by both policy makers and the airline industry.98

Bioenergy Industry

Bioenergy requires a more complex supply chain than other renewable technologies, given the many potential feedstocks and conversion processes for bioenergy and the need to collect, process and convert biomass raw materials to fuels. With support from academia, research institutions and governments, the industry is developing and commercialising new technologies and fuels, especially advanced biofuels for use in transport.99

Solid Biomass Industry

Many entities are involved in growing, harvesting, delivering, processing and using solid biomass to produce heat and electricity. These range from locally based companies that manufacture and supply smaller-scale heating appliances, to regional and global players involved in the supply and operations of large-scale district heating and power generation technology.

Bioenergy projects that produce electricity and/or heat often rely on solid fuels that are sourced locally – such as municipal solid wastevi, residues from agricultural and forestry processes, and purpose-grown energy crops. The fuels also can be processed and transported for use where markets are most profitable. For example, the international trade in biomass pellets is growing to meet requirements for fuels for large-scale heat and power generation and to provide residential heating in markets where the use of pellets is supported, notably in Europe but also increasingly in Japan and the Republic of Korea.100

Global production and trade in wood pellets continued to expand in 2018, with production reaching an estimated 35 million metric tonnes.101 Wood pellets are used in industry (mostly in power stations) and for heating residential and commercial buildings. The United States was the largest producer and exporter of wood pellets in 2018 and had the capacity to produce 10.6 million tonnes (11.9 million short tons) annually in 83 operating plants by year’s end.102 Actual US production in 2018 was 7.3 million tonnes (8.2 million short tons).103

US exports of wood pellets increased 16% in 2018 to 5.4 million tonnes (6.1 million short tons).104 Most of the exports went to Europe – primarily to the United Kingdom, although exports increased significantly to Denmark, Italy and the Netherlands.105 Canada exported some 2.7 million tonnes of pellets – a 60% increase from 2015 – primarily to the United Kingdom (1.6 million tonnes, representing 60% of Canadian exports) but also to Japan (0.6 million tonnes, or 24% of exports).106 The Russian Federation was a major producer and exporter of wood pellets as well: annual production capacity reached 3.6 million tonnes in 2018, although Russian plants were operating at only a 50% load factor.107 Russian exports rose 30% for the second year running and totalled 1.5 million tonnes.108

In Europe, a number of biomass-fired CHP plants were commissioned or under construction during 2018, stimulated by measures designed to help achieve the EU’s Renewable Energy Directive targets for 2020 and 2030. For example, in the United Kingdom, a 27 megawatt (MW) capacity CHP plant, fuelled with locally sourced wood, was commissioned in Sand­wich and began delivering renewable heat and power to a nearby business and science park and some 50,000 homes.109 In the Netherlands, a 15 MW biomass CHP plant was under construction in Duiven; when completed, it will run on the city’s wood waste and provide heat, electricity and steam to an animal feed mill in addition to supplying surplus electricity to the grid.110

Bagasse and other agricultural residues, commonly used to produce heat and power in Brazil, are attracting increasing attention elsewhere. For example, a new biomass plant in Mexico owned by Grupo Piasa was commissioned in 2018 and is fuelled by sugarcane wastes, supplying 50 MW of electricity and steam to a sugar mill and to nearby bottling plants, with the surplus power delivered to the grid.111 In Argentina, as part of the country’s RenovAr Program to support the use of renewable electricity, the major peanut producer Prodeman began commercial operation of its 10 MW bioenergy facility, which is expected to use 50,000 tonnes of peanut shell waste annually to generate energy.112

Forest products are being used increasingly as an energy source as well. In 2018, plans were announced for a new 50 MW biomass power plant in La Coruña, Spain, fuelled by locally sourced forest waste.113 In South Africa, the Ngodwana Energy Biomass Project – the first such project supported under the country’s Renewable Energy Independent Power Producer Procurement Programme and one of four expected biomass projects in the country – reached financial close.114

In India, the country’s largest power producer, NTPC, announced its intention to start biomass co-firing at all of its coal-based thermal power stations, using biomass pellets as well as briquettes made from scrap lumber, crop residues, forest debris, manure and some types of waste residues.115 One of NTPC’s objectives is to reduce the air pollution caused by the burning of surplus agricultural residue in fields.116

In Japan, where support from a generous FIT has stimulated rising interest in bioelectricity, a large pipeline of projects is being established, using as fuel both indigenous resources and imported pellets.117 Among the developments in 2018, Nippon Paper Industries started operating a bio-power plant at its paper mill in Ishinomaki, which will use wood residues from local forests as well as wood pellets from Asia and North America.118 Toshiba announced an agreement to collaborate with Omuta City of Fukuoka Prefecture to construct a new 44 MW bio-power plant that was expected to start operation in 2019; in addition, Toshiba converted the Mikawa coal-fired power to operate as a biomass power plant.119 Meanwhile, Sumitomo Heavy Industries was building a 75 MW bio-power plant based on circulating fluidised bed boiler technology in Kanda City, Fukuoka Prefecture.120

Liquid Biofuels Industry

The United States is home to the world’s two largest ethanol producers, POET and Archer Daniels Midland (ADM). POET is increasing its capacity by making upgrades at several of its 27 ethanol plants, and in 2018 the company began expanding a facility in Marion, Ohio and also building a new plant in Indiana.121 ADM, meanwhile, reduced its ethanol capacity slightly, shifting production to other high-value chemicals.122

In Brazil, ethanol production is based principally on fermentation from sugar cane, the country’s traditional ethanol feedstock. Production capacity is not fully utilised, however, and in 2018 some eight sugar mills were operating below capacity, leaving room for ramp-ups in production in response to increases in demand and when sugar prices are low.123 The trend to produce ethanol from corn also continued in 2018. Brazil’s FS Bioenergia announced plans to double the capacity of its 265 million litre Lucas do Rio Verde plant, and also broke ground on a second, BRL 1 billion (USD 267 million) corn ethanol plant in Sorisso that is expected to produce 530 million litres of ethanol annually starting in 2020.124

Ethanol production capacity is expanding rapidly in

China

to meet growing demand.

In Europe, by contrast, changes to the EU’s Renewable Energy Directive limiting the role of “food-based biofuels” have led to uncertainties about future markets for the region’s ethanol industry.125 This has led to some plants being shut down either temporarily or permanently: for example, the two largest ethanol production plants in the United Kingdom, owned by Vivergo and Crop Energies, were closed in 2018.126

Ethanol production capacity is expanding rapidly in China to meet growing demand, including from a nationwide E10 mandate that is expected to be in place by 2020.127 China’s ethanol production capacity totalled some 3.5 million litres at the end of 2017, and new plants capable of producing 8.4 million litres were either under construction or going through the approval process in 2018.128 For example, China Beidahuang Industry Group Holdings Ltd announced plans to build a CNY 960 million (USD 152 million) plant in Inner Mongolia with the capacity to produce 443,000 litres of ethanol per year, consuming 924,000 tonnes of corn and some 350,000 tonnes of straw and sweet sorghum.129

Chinese-based companies also are developing biofuel production facilities elsewhere in the world. For example, the Nigerian National Petroleum Corporation announced plans in 2018 to realise several biofuel projects in Nigeria with the help of Chinese companies.130 The company signed memoranda of understanding with China that include a plan to develop Nigeria’s first biofuel production facility as well as at least three other projects to help the African country meet its 10% blending mandates for ethanol and biodiesel.131

Global biodiesel production capacity has been expanding to meet increasingly ambitious blending mandates worldwide, especially in North America.132 In response to rising demand in the United States, US-based Renewable Energy Group Inc. expanded and upgraded its Ralston, Iowa biodiesel plant in 2018 through a USD 32 million project that more than doubled the plant’s production capacity from 45 million litres to 114 million litres per year.133 To the north, Canada-based Benefuel Inc. announced plans to build a new 76 million litre per year biodiesel plant in Sarnia, Ontario.134

By year’s end, just

five airports

worldwide had biofuel distribution systems in place.

Efforts to demonstrate the production and use of advanced biofuels continued in 2018, with the aim of producing fuels that show improved sustainability performance.135 Some advanced biofuels can replace fossil fuels directly in transport systems (“drop-in biofuels”), including in aviation and for blending in high proportions with conventional fuels in road transport (such as HVO in diesel-fuelled vehicles).136 A number of different pathways to produce advanced biofuels are under development and include bio-based fuels (from an array of feedstocks) in the form of ethanol, butanol, diesel jet fuel, gasoline, biomethanol and mixed higher alcohols.137

HVO/HEFA led the development of these new biofuels in 2018, followed by ethanol from cellulosic materials such as crop residues and by fuels from thermochemical processes, including gasification and pyrolysisv.138 Production of HVO/HEFA fuels (based on feedstocks such as used cooking oil, tall oilvi and others) continued to increase to meet rising demand for both road transport (especially for heavy-good vehicles) and aviation. For example, “renewable diesel” based on HVO/HEFAvii supplied 10% of all diesel used for transport in the US state of California in 2018, and HVO-derived fuels provided most of the biofuel used worldwide in aviation.139

In 2018, Neste (Finland), the world’s largest HVO producer, announced an investment of EUR 1.4 billion (USD 1.6 billion) to more than double its renewable diesel production capacity in Singapore by adding a further 1.3 million tonnes (1.7 billion litres) of annual capacity.140 In the United States, where most of the remaining HVO expansion occurred, Renewable Energy Group increased the combined capacity at its 13 biomass-based diesel refineries to more than 2 billion litres per year, and began working with Phillips 66 to build another large-scale renewable diesel plant on the west coast.141

Also in 2018, US-based World Energy acquired a biorefinery facility in California from Paramount (formerly owned by Altair) that can produce 151 million litres per year of biojet fuel and renewable diesel; in addition, the company announced a USD 350 million investment over two years to increase total production capacity to 1.15 billion litres per year.142 In Norco, Louisiana, the annual capacity of the Diamond Green Diesel plant was expanded in 2018 from 0.6 billion litres to more than 1 billion litres, and the company had plans for a further increase of 1.5 billion litres per year by late 2021.143

In Europe, Eni (Italy) ramped up HVO production at its Venice refinery to 250,000 tonnes (320 million litres) in 2018 and aims to expand the facility’s capacity to 600,000 tonnes (770 million litres); the company also expected its Sicily plant to come online in 2019.144 Total S.A. (France) received an operating licence for its La Mède biorefinery in the south of France, a conversion project that cost an estimated EUR 275 million (USD 315 million) and that was scheduled to begin producing renewable diesel in 2019.145

There is increased emphasis on using non-food feedstocks to produce HVO fuels.146 For example, Neste now produces its HVO from 80% waste vegetable oils and residual materials rather than from virgin feedstock.147 In 2018, UPM (Finland) undertook an environmental impact assessment for a proposed second biorefinery, Kotka Biorefinery, that would produce some 500,000 tonnes (640 million litres) of advanced biofuels for transport using a different raw material base and technology than the tall oil used in the company’s Lappeenranta Biorefinery.148 The renewable and sustainable feedstocks being considered include oil from Brassica carinata, a crop that UPM has been evaluating in large-scale trials in Uruguay and that can be grown between harvests, thus complementing rather than competing with food production.149

The emerging cellulosic ethanol industry also saw progress in 2018, with some of the technical and commercial difficulties of recent years being overcome and large-scale production increasing. However, only a small number of facilities was operating successfully worldwide. In the United States, POET and DSM’s Liberty plant in Emmetsburg, Iowa, which produces ethanol from corn residues, was reported to be operating reliably after the key issue of feedstock pre-treatment was resolved.150

DuPont’s commercial-scale plant in Iowa, which was shut down temporarily in 2017 after the company’s merger with Dow, was bought by Verbio (Germany), and production was expected to restart in 2020.151

Elsewhere, the Chemtex cellulosic ethanol plant in Crescentino, Italy, which was closed following the failure of the parent company Gruppo Mossi Ghisolfi (Italy) in 2017, was purchased at auction by Versalis (part of Italy’s Eni).152 In Brazil, production was due to resume in early 2019 at GranBio’s 82 million litre per year Bioflex 1 cellulosic ethanol plant.153 And in India, construction started in 2018 on the first of 12 scheduled cellulosic ethanol plants: Bharat Petroleum Corporation Ltd’s USD 135 million facility is expected to produce 30 million litres of ethanol annually using 200,000 tonnes of rice straw as feedstock.154

The production of cellulosic ethanol from corn residues, such as kernel fibre, at corn-based ethanol facilities expanded in 2018. The sharing of the plants and facilities can allow for lower-cost production. D3MAX LLC and Ace Bioethanol LLC (both United States) announced the construction of a dual cellulosic and corn-based ethanol plant at their facility in Stanley, Wisconsin in 2018.155

Commercialisation of thermal advanced biofuel processes such as pyrolysis and gasification also developed further during the year. Enerkem (Canada) continued work on a number of potential projects based on its waste gasification technology, including projects in China, in the US state of Minnesota and in the Dutch city of Amsterdam (along with Air Liquide of France, AkzoNobel of the Netherlands and the Port Authority).156 IR1 Group (United States) began construction on the Red Rock Biofuels LLC biorefinery in Lakeview, Oregon, which plans to convert some 136,000 dry tons (123,000 metric tonnes) of wood waste biomass into more than 15 million gallons (57 million litres) of renewable jet diesel and gasoline blend-stock fuels using Fischer-Tropschviii technology.157

Developments continued in the use of biofuels in aviation, although these fuels replaced only a small fraction of aviation fuel in 2018.158 By year’s end, more than 150,000 flights had used biofuels, five airports had biofuel distribution systems in place, and airlines worldwide had committed to purchasing a total of 6 billion litresix of biofuel in the future through long-term offtake agreements.159

Among the milestones in 2018, United Airlines operated the longest non-stop transatlantic biofuel journey to date when a biojet blend of 30% carinata oilseed and 70% conventional jet fuel powered a Boeing 787 flight from San Francisco to Zurich.160 Gulfstream Aerospace announced that its G280 jet flew a record distance of more than 4,000 kilometres on biofuels, travelling from Savannah, Georgia, to Van Nuys, California.161 And the Indian Air Force (IAF) flew a military aircraft with blended biofuel for the first time when an AN-32 transport plane was flight-tested with a 10% biojet fuel using jatropha oil; if additional flight trials succeed, the IAF expects to begin using the biofuel in its fighter jets.162

In partnership with the Japanese airline ANA, the company Euglena (Japan) started mass production of biojet and biodiesel from algae and waste cooking oil at its Yokohama plant, based on an investment of JPY 6 billion (USD 54 million); this is the first such production in Japan, with the capacity to produce 0.13 million litres per year of the fuels.163 The Swedish airline SAS aims to replace all of its jet fuel used on domestic flights with biofuel by 2030, and in 2018 it signed an agreement with Sweden’s largest oil company, Preem, to supply the airline with renewable aviation fuels from forestry residues and other waste materials.164 In the United States, the Port of Seattle announced that 13 airlines – including Alaska Airlines, Delta Air Lines, Horizon Airlines and Spirit Airlines – will collaborate on a plan to provide all airlines operating at Seattle-Tacoma International Airport with access to biojet fuel.165

Gaseous Biomass Industry

Until recently, the focus in the gaseous biomass sector was on producing biogas for use in electricity generation, often in CHP plants. Industry growth was supported by favourable FITs and other support mechanisms. Such technologies are now well developed and widely deployed, and policy makers are focusing on the production and refining of biogas to produce biomethane fuel, which can be injected into gas pipelines and used as a heating or transport fuel.

The use of biogas to generate electricity and heat is an increasingly common practice, and in 2018 more than 10,000 digesters in Europe and 2,200 sites in all 50 US states were producing biogas.166

Although the technology has been deployed mainly in Europe and North America, it is now expanding to more countries. In 2018, the wastewater treatment company Fluence (United States) was awarded a EUR 1.7 million (USD 1.9 million) contract to develop a waste-to-energy digestion project for Arrebeef Energia, a prominent beef producer in Argentina.167 The system will produce biogas for conversion to electricity and heat, which ArreBeef will use in its own operations to help lower costs, and surplus electricity also will be fed into the electricity grid in Buenos Aires.168

In Asia, construction was under way on a new waste-to-biogas production facility in Yabu City, Japan that was expected to start operation in 2019 and will convert farm and food waste into renewable energy; the biogas is to be converted into some 1.4 megawatt-hours (MWh) of electricity per year, and the waste heat will be used by a nearby greenhouse.169 In the Philippines, Metro Pacific Investments has pledged PHP 1 billion (USD 19 million) to work with Surallah Biogas Ventures to design, build and operate a facility for Dole Philippines in Mindanao that will produce the energy equivalent of some 50,000 MWh annually of biogas.170 In the Middle East, four biogas plants to be built in Oman at a cost of OMR 50 million (USD 130 million) are expected to produce electricity from more than 500,000 tonnes of food waste annually, helping to reduce the country’s estimated OMR 56 million (USD 146 million) in waste disposal costs.171

Biogas can be upgraded to biomethane by removing the carbon dioxide and impurities, facilitating its injection into natural gas pipelines. Policy makers increasingly view this as an important route to decarbonising the heat and transport sectors.172 Systems for producing and converting biogas to biomethane are now being widely deployed, with the refined biomethane either being injected into natural gas pipelines for use for heating or being used directly for transport.

In Europe, more than

500

biomethane installations

were in operation by the end of 2018.

In Europe, more than 500 biomethane installations were in operation by the end of 2018.173 Ørsted and Bigadan (both Denmark) completed construction of a biogas plant in the city of Kalundborg that will use 300,000 tonnes of waste annually from the nearby pharmaceutical companies to produce 8 million cubic metres of biogas that will be upgraded to biomethane.174 In the Belgian municipality of Beerse, a gas upgrading system was being added to an existing digester facility that uses garden and vegetable waste from local households as feedstock; the aim is to upgrade 25% of the gas that is produced and to use the rest in a CHP plant.175

The United States was home to numerous biomethane facilities in 2018, and deployment has been stimulated by the inclusion of biomethane in the RFS. Anaergia (Canada) was building an organic waste-to-energy facility in the city of Rialto, California that aims to process 700 tonnes of food and 300 tonnes of biosolids daily to produce biomethane (renewable natural gasx, or RNG) and electricity.176 In Hawaii, the state’s gas utility commenced operations at a biomethane facility at the Honouliuli Wastewater Treatment Plant in Honolulu that converts biogas derived from sewage waste into pipeline-quality RNG.177

In China, where biomethane plants have been developed rapidly in recent years, some 140 plants were in operation countrywide by the end of 2018.178 The German company EnviTec began work on its fifth biogas project in China, a facility in Shanxi where the biogas will be converted to biomethane, compressed and sold locally from the plant premises.179 Elsewhere in Asia, 200 buses in Karachi, Pakistan, will be powered by biomethane produced from 3,200 tonnes of cow manure.180 And India’s Sustainable Alternative Towards Affordable Transport initiative is expected to support the opening of 5,000 biomethane plants by 2023, which would use agricultural waste, municipal solid waste and cattle manure as feedstock to produce 15 million tonnes of biomethane annually, helping to displace half of India’s imports of natural gas.181

Biomethane also is being used as a fuel for marine transport. Skangas (Norway) has supplied biomethane from its biogas facility in Lidköping for use in a tanker ship.182 During 2018, the shipping company was building five more vessels that can be fuelled by biomethane (when the fuel is available) as well as by liquefied natural gas.183 Norway-based cruise operator Hurtigruten announced in 2018 that it plans to invest EUR 742 million (USD 849 million) to power its ships with biomethane starting in 2021.184

iThe traditional use of biomass for heat involves the burning of woody biomass or charcoal as well as dung and other agricultural residues in simple and inefficient devices in developing and emerging economies.i

iiBioenergy is considered to be sustainable when its use reduces greenhouse gas emissions compared to the use of fossil fuels in the applications where it is used, and where its use avoids significant negative environmental, social or economic impacts and plays a positive role in the achievement of sustainable development objectives. See endnote 3 for this section.ii

iiiThe word “corn” has various meanings depending upon different geographical regions. In Europe, it includes wheat, barley and other locally produced cereals, whereas in the United States and Canada it generally refers to maize. See endnote 51 for this section.i

ivMunicipal solid waste consists of waste materials generated by households and similar waste produced by commercial, industrial or institutional entities. The wastes are a mixture of renewable plant- and fossil-based materials, with the proportions varying depending on local circumstances. A default value is often applied that assumes that 50% of the material is “renewable”.iv

vBiomass pyrolysis involves the thermal decomposition of materials at elevated temperatures in an inert atmosphere, producing a mixture of gases, liquids (pyrolysis oil) and solid biochar.v

viTall oil is a mixture of compounds found in pine trees and is obtained as a by-product of the pulp and paper industry.vi

viiIn some markets HVO/HEFA fuels used as fossil diesel replacements are called renewable diesel.vii

viiiFischer-Tropsch technologies are used to convert synthesis gas containing hydrogen and carbon monoxide to hydrocarbon products.viii

ixEquivalent to about 1.8% of annual aviation fuel use. ix

xIn some markets, notably in North America, biomethane is called renewable natural gas. x

GEOTHERMAL POWER AND HEAT

HYDROPOWER

OCEAN POWER

SOLAR PHOTOVOLTAICS (PV)

CONCENTRATING SOLAR THERMAL POWER (CSP)

SOLAR THERMAL HEATING AND COOLING

WIND POWER