BIOENERGY

  • Modern bioenergy provided around 5.1% of total global final energy demand, accounting for about half of all renewable energy in final energy consumption.
  • In industrial process heat, modern bioenergy use has grown around 2% in recent years, while bio-heat demand in buildings has fallen slightly.
  • Biofuel production increased 5%, with Indonesia becoming the world’s largest biodiesel producer despite a drop in production in the United States.

Bioenergy involves the use of a wide range of biological materials for energy purposes. These can be converted into thermal energy, electricity and fuels for transport (biofuels) through a number of different processes. Many well-established bioenergy pathways exist that are technically proven and for which systems are available at a commercial level. In addition, new routes are at the earlier stages of development, demonstration and commercialisation.1 Given the potential environmental, social and economic implications of using biomass materials for energy, the sustainable production and use of bioenergy is a key issue.2

Bioenergy Markets

Biomass contributes the highest share to the global energy supply of all renewable energy resources. It provides energy not only for heating and transport, but also to produce electricity.3 Including the traditional use of biomassi, bioenergy contributed an estimated 12%, or 45.2 exajoules (EJ), to total final energy consumption in 2018.4

Modern bioenergyii, which excludes the traditional use of biomass, provided an estimated 19.3 EJ – or 5.1% of total global final energy demand – in 2018, accounting for about half of all renewable energy in final energy consumption.5 ( See Figure 20.) Modern bioenergy provided around 13.9 EJ for heating (8.6% of the global energy supply used for heating), 3.7 EJ in transport (3.1% of transport energy needs) and 1.7 EJ to the global electricity supply (2.1% of the total).6 Modern bioenergy use has grown most rapidly in the electricity sector – at around 6.7% per year over the last five years – compared to around 4.4% in transport and only around 1.1% for bio-heat.7

Figure 20
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Note: Data should not be compared with previous years because of revisions due to improved or adjusted data or methodology. Buildings and industry categories include bioenergy supplied by district energy networks. Totals may not add up due to rounding.

Source: Based on IEA. See endnote 5 for this section.

Bio-heat Markets

Biomass can be used to provide heat in a number of different markets. Traditional use of biomass is still the largest sector, but biomass also is an important source of energy for industry and buildings, with the heat either provided directly at the site where it is to be used, or distributed via district heating systems. The patterns of use have changed relatively slowly in recent years.8 (See Figure 21.)

Figure 21
image

Source: Based on IEA. See endnote 8 for this section.

The traditional use of biomass in developing and emerging economies supplies energy for cooking and heating in simple and usually inefficient fires or stoves.9 ( See Distributed Renewables chapter.) The amount of biomass used in traditional applications has decreased slightly in recent years, from 27.2 EJ in 2010 to an estimated 26 EJ in 2018.10 The decline is due in part to efforts to reduce traditional biomass use and to improve access to clean fuels, given the negative effects of biomass burning on local air quality, the associated health impacts and the unsustainable nature of much of the biomass supply for these uses.11

Bio-heat demand in industry grew

1.8%

annually between 2013 and 2018, while bio-heat in buildings declined over the same period.

Modern bioenergy can provide heat more efficiently and cleanly for industry and for residential, public and commercial buildings. Bio-heat can be produced and used directly where it is produced, including through the co-generation of electricity and heat using combined heat and power (CHP) systems. Most of the biomass used for heating is wood-based fuel, but liquid and gaseous biofuels also are used – including biomethane, which can be injected into natural gas distribution systems.12 In 2018, modern bioenergy applications provided an estimated 13.2 EJ of heat directly – up 9.5% from 2010 – and a further 0.7 EJ via district heating.13

Of this total, 8.9 EJ was used directly to provide heat for industry and agriculture.14 Bio-heat demand in these sectors grew 1.8% annually on average between 2013 and 2018, and bio-heat met 9.3% of the sectors’ heat requirements in 2018.15 Industries that handle biomass – notably paper and board, sugar and other food products, and wood-based industries – often use their residues for energy purposes. In the paper and board sector, for example, 40% of energy use is derived from biomass sources, including the “black liquor” produced in paper manufacture.16 Bioenergy is not yet widely used in other industries. However, biomass and waste fuels met around 6% of the cement industry’s energy needs in 2017, mainly in Europe where they provided around 25% of the energy used in cement making.17

Bioenergy use for industrial heating has occurred mainly in countries that have large bio-based industries. Brazil, the largest user of biomass for industrial heat in 2018 (1.6 EJ), relies on sugarcane residue (bagasse) from sugar production to generate heat in CHP systems.18 India (1.4 EJ), also a major sugar producer, was the second largest user of bioenergy for industrial heat in 2018, followed by the United States (1.3 EJ), which has an important pulp and paper industry.19

In the European Union (EU), industry used some 0.96 EJ of bioenergy directly for heat in 2018, with around 86% of this in the paper and pulp, timber and food industries.20 The EU market continued to grow in 2019; for example, a biomass CHP plant, completed at a paper mill in Venizel, France aimed to generate all of the energy for the mill’s operations using 75,000 tonnes of discarded wood and 26,000 tonnes of by-products from paper and pulp production annually.21

In the buildingsiii sector, modern bioenergy provided 4.3 EJ of heat directly in 2018, or around 4.6% of total heat demand.22 The amount of bio-heat provided fell by around 1% annually on average between 2013 and 2018, and biomass’ share of heat in buildings also declined during that period.23 Consistent data for 2019 were not yet available, but the change for that year was expected to be small given recent trends.

Biomass can produce heat for residential building use through the burning of wood logs, chips or pellets produced from wood or agricultural residues. The informal use of wood and other biomass to heat individual residences is prevalent in developing and emerging economies as well as in more developed economies, and can be a source of local air pollution if inefficient appliances and/or poor-quality fuels are used.24 New technologies that allow for high reductions in emissions from biomass combustion are commercially available, triggered by stringent national regulations for small combustion facilities in some countries.25 Generally, it is easier to meet efficiency and air quality goals economically at larger scales of operation.26

Modern use of bio-heat in buildings has been concentrated in the EU, which accounted for 47% of this total use in 2018.27 France, Italy, Germany and Sweden accounted for around half of the EU’s bio-heat demand.28 Most bio-heat demand in the EU (as elsewhere) is residential, although this has not increased much since 2010 and varies greatly by year depending on climatic conditions.29 Systematic country data on biomass heating for 2019 were available for only a few European countries.30

Logs and wood chips accounted for most of the biomass fuel used to heat buildings in the EU in 2018; however, wood pellet use has been growing rapidly and increased 5% in 2018, to around 15.8 million tonnes.31 Italy remained the world’s largest market for pellet heating, using 4.3 million tonnes (mostly for residential use), followed by Denmark (2.4 million), Germany (2.2 million), Sweden (1.6 million) and France (1.6 million).32 Although the European pellet market varies annually depending on weather conditions and heating needs, it generally has expanded as installations of pellet stoves and boilers have risen in response to policy measures that aim to promote low-carbon alternatives and to reduce the role of oil in heating markets.33

Despite growth in the use of biogas for heating, and particularly in the production of biomethane and its introduction into gas grids, biogas provided only 4% of bio-heat in European buildings in 2018.34 North America followed the EU for bioenergy use in buildings. In 2018, more than 2 million US households (2% of the total) relied on wood or wood pellets as their primary heating fuel – using a total of 0.4 EJ – and a further 8% of households used wood as a secondary heat source.35 Wood use was concentrated in rural areas, with one in four rural households combusting wood for primary or secondary space heating.36 In Canada, the residential heating sector used some 0.13 EJ of bio-heat from wood fuels in 2018.37 Pellet sales in North America totalled around 2.7 million tonnes.38

In addition to direct use of bio-heat in industry and buildings, bioenergy provided some 0.7 EJ to district heating systems in 2018; of this total, 51% was used in industry and agriculture, and the rest in buildings.39 Bioenergy use in district heating grew 5.7% annually on average during 2013-2018, and bio-heat accounted for 95% of the heat supplied by renewable sources to district systems in 2018.40

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The use of bioenergy in district heating has been concentrated in Europe, where district heating networks supplied around 10% of EU heat demand in 2018 and provide an important market opportunity for biomass.41 Although Sweden, Denmark and Finland continued to lead in this area, bioenergy use for district heating also spread in Estonia, France and Lithuania.42

Expansion continued in several countries during 2019. In Denmark, Ørsted’s Asnæs Power Station, with a capacity of 25 MW of power and 129 MW of process steam and district heating, started operation following the plant’s conversion from coal to wood chips sourced from sustainably managed forests.43 Other plants scheduled to come online in Europe included the Hürth biomass CHP plant in Germany, which aimed to produce 20 MW of electricity and supply heat to a nearby paper mill, and a 18 MW biomass plant in Finland fed primarily by local wood chips, which would provide district heating for the town of Kemi.44

Transport Biofuel Markets

Global productioniv of liquid biofuels increased 5% in 2019 to 161 billion litres (equivalent to 4 EJ).45 The United States remained the leading producer, with a 41% share, despite declines in US production of both ethanol and biodiesel.46 The next largest producers were Brazil (26%) and, more distantly, Indonesia (4.5%), China (2.9%) and Germany (2.8%).47

The main biofuels are ethanol (produced mostly from cornv, 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).48 In addition, production capacity has increased for other diesel substitute fuels, made by treating animal and vegetable oils and fats with hydrogen (hydrotreated vegetable oil, or HVO) and hydrotreated esters and fatty acids (HEFA).49

In 2019, ethanol accounted for around 59% of biofuel production (in energy terms), FAME biodiesel for 35% and HVO/HEFA for 6%.50 (See Figure 22.) Other biofuels included biomethane and a range of advanced biofuels, but their production remained low, estimated at less than 1% of total biofuels production.51

Figure 22
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Note: HVO = hydrotreated vegetable oil; HEFA = hydrotreated esters and fatty acids; FAME = fatty acid methyl esters

Source: See endnote 50 for this section.

Global ethanol production increased 2% to 114 billion litres in 2019, up from 111 billion litres in 2018.52 Large increases in several countries more than made up for a drop in production in the United States, the major producer.53 The United States and Brazil, the two leading producers, accounted for 50% and 33% of global production, respectively, followed by China, India, Canada and Thailand.54

US ethanol production fell 2% in 2019 to 59.7 billion litres.55 Key factors behind the decline were reduced domestic demand for ethanol as blending limits were approached and the US Environmental Protection Agency’s continued support for small refinery exemptions, both of which reduced domestic demand, lowered prices and led to a scale-back in production.56 In addition, ongoing US-China trade negotiations (among other factors) restricted the opportunities for ethanol export, leading US exports of the fuel to decline 14% in 2019, to 5.6 billion litres.57 In response to the reduction in overall demand, several ethanol production plants cut back production.58

In Brazil, ethanol production increased 7% to a record 35.3 billion litres.59 Higher ethanol prices encouraged production ahead of the introduction of the RenovaBiovi system at the start of 2020.60 Most Brazilian ethanol comes from sugar cane, and as of the end of 2019 some 370 sugar ethanol mills were operating across the country.61 Brazil also produced around 1.4 billion litres of ethanol from corn (up 75% from 2018), with 10 production plants in operation and more corn-based capacity under construction to take advantage of the expected rise in ethanol demand under RenovaBio.62

China’s ethanol production increased to 4 billion litres in 2019, up from 3.3 billion litres in 2018, to meet growing domestic demand.63 China aims to progressively extend a 10% ethanol blend mandate to all provinces.64 However, growth in the country’s ethanol production capacity has been lower than anticipated, and the national roll-out of the mandate has been delayed to avoid the need for high levels of ethanol imports.65

In India, where the government has given greater policy priority to biofuels as a way to reduce oil imports, production of ethanol from molasses and other by-products of the sugar industry has increased.66 The country’s ethanol production surged 70% in 2019, to 2 billion litres, leading India to overtake Canada and Thailand to become the world’s fourth largest producer.67 In Canada, ethanol production increased 2% to 1.9 billion litres, and in Thailand it increased 23% to 1.6 billion litres.68

In the EU, changes to the Renewable Energy Directive limiting the role of “food-based biofuels”, along with increased price competition from imports, have led to uncertainties about future markets for the region’s ethanol industry.69 Even so, a number of countries have increased ethanol blending levels, which helped maintain demand in 2019, and production was at around 70% of capacity by year’s end.70 Ethanol production fell in the region’s top two producing countries, France (down 29% to 0.8 billion litres) and Germany (down 7% to 0.8 million litres).71

Global production of biodiesel increased 13% in 2019 to 47.4 billion litres.72 Biodiesel production is more geographically diverse than ethanol production, and the top five countries in 2019 accounted for 57% of global production.73 Indonesia took the lead as the largest country producer (17% of global production), overtaking the United States (14%) and Brazil (12%).74 The next largest producers were Germany (8%), France (6.3%) and Argentina (5.3%).75

Global production of biodiesel increased

13%

in 2019, with Indonesia overtaking the United States as the largest producer.

Indonesia’s biodiesel pro-duction nearly doubled in 2019 to 7.9 billion litres, up from 4 billion litres in 2018.76 Excess pro-duction capacity and new production plants came online in response to a new policy emphasis on meeting the country’s B20 (20% biodiesel) blending target in transport, which was established in 2016 but had not yet been achieved; the expansion of production resulted in higher domestic biodiesel use.77

Biodiesel production in the United States fell 7% to 6.5 billion litres, down from 7 billion litres in 2018, and several production plants either closed or were operating at reduced capacity.78 This was mainly because the removal of the national biodiesel blending credit made production less profitable (although the credit was later restored retroactively).79

In Brazil, biodiesel production continued to rise in 2019, up 11% to a record 5.9 billion litres.80 Contributing factors included an increase in the required biodiesel blend in diesel fuel to 11%, and the need to meet expected higher demand with the introduction of the RenovaBio system.81

In Argentina, biodiesel production decreased 9% to 2.5 billion litres, as the weaker US market and ongoing US duties on biodiesel imports discouraged trade.82 Argentine biodiesel exports fell from 1.6 billion litres in 2018 to 1.2 billion litres in 2019.83

The production of HVO/HEFA continued its robust growth of recent years, rising 12% from 6 billion litres in 2018 to 6.5 billion litres in 2019.84 Production was concentrated in Finland, the Netherlands and Singapore, although US capacity also grew strongly.85

Biomethane is used as a transport fuel mainly in Europe and the United States, which is the largest producer and user of biomethane for transport.86 US production has accelerated since 2015, when biomethane was first included in the advanced cellulosic biofuels category of the US Renewable Fuel Standard (RFS) and in state initiatives such as California’s Low Carbon Fuel Standard, thereby qualifying for a premium.87 US biomethane use under the RFS increased 20% in 2019 to around 30 petajoules (PJ).88

In Europe, the use of biomethane for transport increased 20% in 2018 (latest data available) to 8.2 PJ.89 Sweden remained the region’s largest biomethane consumer, using nearly 60% of the total, followed by Germany, Norway and the United Kingdom, where use of the fuel grew by a factor of four to 0.6 PJ in 2018.90

The demand for biomethane for use in commercial vehicles – as well as investments in filling stations to provide the fuel – also grew. In the United Kingdom, a nationwide network of public refuelling stations for heavy goods vehicles was being installed on major routes to reach fleet operators across the country, serving major trunk roads and cities.91 Similar networks were being developed in Finland and Sweden.92

Global bioelectricity production increased

9%

in 2019, led by China.

Interest in biomethane as a low-carbon fuel in public transport increased. In France, the Public Transport Central Purchasing Office (CATP) and Ile-de-France Mobilités ordered 409 biogas buses, supplied by Iveco, to operate in the inner and outer suburbs of the Paris metropolitan area.93 Trondheim, the third largest city in Norway, introduced 189 buses powered by biomethane.94 In the UK, the city of Bristol announced plans to procure 77 biomethane-fuelled buses, which can reduce greenhouse gas emissions 80% and nitrogen oxide emissions 95% when compared to diesel equivalents.95

Although efforts to develop other “advanced biofuels” continued, and some new production capacity was installed ( see Industry section in this chapter), so far these fuels have been produced and used only in small quantities. Cellulosic ethanol contributed only around 0.8 PJ under the US RFS scheme in 2019, showing minimal growth over the previous three years.96 And despite significant efforts, biofuels provided only around 0.01% of aviation fuel for the year.97

Bio-power Markets

Global bio-power capacity increased an estimated 6% in 2019 to around 139 gigawatts (GW), up from 131 GW in 2018.98 China had the largest capacity in operation by the end of 2019, followed by Brazil, India, Germany, the United Kingdom, Sweden and Japan.

Total bioelectricity generation rose some 9%, from 546 terawatt-hours (TWh) in 2018 to around 591 TWh in 2019.99 In recent years, growth has been concentrated in the EU and in Asia, particularly in China, Japan and the Republic of Korea. China extended its lead as the largest country producer of bio-power, followed by the United States.100 The other major producers in 2019 were Brazil, Germany, India, the United Kingdom and Japan.101

Asia was the largest regional producer of bioelectricity, generating 225 TWh in 2019, an increase of 17%.102 Nearly half of this generation was in China.103 The EU remained the second largest regional producer, with generation up 5% to 200 TWh.104 Bioelectricity generation in North America declined slightly (down 2%) to 76 TWh.105 (See Figure 23.)

Figure 23
image

Source: See endnote 105 for this section.

China’s bio-power capacity grew 26% to 22.5 GW in 2019, up from 17.8 GW in 2018, increasing in line with the provisions of the country’s 13th Five-Year Plan (2016-2020).106 Generation rose 23% to more than 111 TWh.107 Capacity growth was focused on the use of solid biomass and municipal solid wastevii for CHP systems, providing electricity as well as heat in urban areas.108

Japan’s growth in bio-power capacity and generation remained strong during the year, stimulated by the Feed-in Tariff scheme.109 The capacity of dedicated bio-power plants increased 8% to 4.3 GW, and generation grew 18% to 24 TWh.110 In the Republic of Korea, bio-power generation rose 50% to 10.9 TWh, stimulated by a generous Renewable Energy Certificate Scheme and feed-in tariffs.111 Bio-power growth in both countries was based on rising imports of wood pellets, which are used for co-firing with coal and in new bio-power facilities.112 In India, bio-power capacity increased marginally to 10.2 GW, and generation rose 8% to 51 TWh.113

In the EU, bio-power capacity and generation continued to rise to meet the national targets for 2020 under the new Renewable Energy Directive.114 Bio-power capacity grew around 4% in 2019 to 44 GW, and generation increased 5% to 200 TWh.115 Germany remained the region’s largest producer of bioelectricity, primarily from biogas, but domestic generation did not increase (540 TWh).116 In the United Kingdom, bio-power capacity grew 5% to 7.9 GW, and generation rose more strongly – up 11% to 37 TWh – as new large-scale pellet-fired capacity installed in 2018 came fully online.117 Generation also surged in the Netherlands (up 49%) as bioelectricity projects financed under the SDE feed-in tariff scheme came online.118 In Denmark, bio-power generation rose 21%.119

The United States recorded the second highest national bio-power capacity and generation for the year.120 However, the country’s capacity (16 GW) did not grow, and generation fell 6% to 64 TWh, continuing the trend of recent years (down 9% since 2015).121 The decline was due to a lack of strong positive policy drivers and to difficulty in competing with wholesale electricity prices as other renewable generation sources and low-cost natural gas became more competitive.122

Brazil was the third largest producer of bioelectricity globally, with most of the country’s generation based on sugarcane bagasse.123 Brazil’s capacity rose 2% in 2019 to 15 GW, and generation grew 2% to 55 TWh.124

The increased use of internationally traded wood pellets in the EU, Japan and the Republic of Korea was part of a significant global trend. Wood pellets can replace coal-based generation either through co-firing with coal in existing facilities or in purpose-built biomass-fired boilers. Globally, pellet use for electricity generation increased 2.5-fold between 2014 and 2018, to 17 million tonnes.125

The use of biogas to co-generate electricity and heat has risen as well. By the end of 2019, some 132,000 biogas digesters were in operation worldwide.126 More than 100,000 of the units were in China, followed distantly by Europe (around 18,000) and the United States, where some 2,200 sites in all 50 states were producing biogas.127

Electricity generation from biogas expanded to more countries and regions in 2019, including Africa, India, Latin America and the Middle East. In Ghana, a 400 kilowatt (kW) plant fuelled by biogas from waste digestion was under construction as part of a hybrid biogas, solar PV and pyrolysis plant supported by a EUR 5 million (USD 5.6 million) grant from the German government.128 In the Indian state of Maharashtra, a new agricultural and municipal waste digester was scheduled to be installed at a biogas plant with 4 MW of power generating capacity; the biogas will be used in solid oxide fuel cells to produce electricity through an electro-chemical rather than a combustion process.129

In Latin America, a commercial-scale facility that uses poultry waste to produce organic fertiliser and biogas opened in the state of Jalisco, Mexico.130 Brazil’s first biogas plant based on pig manure also began operations: the BRL 17 million (USD 4.2 million) project uses the waste from some 18 large local piggeries to run two 240 kW motor-generators that will power 72 public buildings in the municipality of Entre Rios do Oeste.131

In the Middle East, a new biogas power plant at the Mazoon Dairy Company in Oman, which uses biogas from cattle waste to provide process energy as well as fertiliser, became the first such facility in the region.132 In the United Arab Emirates, Dubai Municipality announced plans to build a biogas power plant at the Warsan Sewage Treatment that would reduce some 31,000 tonnes of carbon dioxide (CO2) emissions annually.133

Bioenergy Industry

The bioenergy industry comprises a wide range of different businesses. These are involved in the complex supply chains that turn many potential biomass feedstocks into solid, liquid and gaseous fuels that are then used to produce electricity, heat and transport fuels. The companies involved also reflect the differences in the scale and complexity of these supply chains and the innovation required to respond to new opportunities and challenges.134 In 2019, trends and developments varied widely across the solid, liquid and gaseous biomass industries.

Solid Biomass Industry

The entities involved in supplying and using solid biomass fuels range from small, locally based companies that manufacture and supply smaller-scale heating appliances and their fuels; to regional and global players involved in the supply and operations of large-scale district heating and power generation technology; to entities engaged in international trade in wood pellets and other biomass products.

image

Bioenergy projects that produce electricity and/or heat from solid fuels mostly use feedstocks that are sourced locally, such as residues from agricultural, forestry processes and timber processing, and municipal solid waste. Increasingly, however, solid biomass fuels are being processed and transported (most often in the form of wood pellets) to where markets are available and most profitable. This growth in biomass pellet production to serve international markets for heat and electricity production is an important development in the sector.

In 2018, global production of biomass pellets reached an estimated 55 million tonnes.135 China contributed around 20 million tonnes – up five-fold from 2014 – produced mainly from wood and agricultural residues and used almost entirely domestically.136 The other top producing regions were Europe (17 million tonnes) and North America (11 million tonnes).137 Production of pelleted biomass fuels has grown strongly to meet demand in Europe and more recently Asia.

Excluding China (where information on pellet usage is unclear), nearly 17 million tonnes of pellets were used worldwide for power generation and CHP production (and other industrial purposes) in 2018, and 18 million tonnes were used to provide heat in the residential and commercial sectors.138 Excluding pellets produced in China, pelleted fuels generated an estimated 90 TWh of electricity, representing around 6% of the biomass used for electricity generation.139 Pellets also provided an estimated 7.5% of the biomass used to heat buildings.140

The global trade in wood pellets initially relied on subsidiary companies established by major users such as Drax (United Kingdom) and RWE (Germany), which, in the absence of alternatives, invested in vertically integrated supply chains to meet their own demand. More recently, however, the market has shifted to third-party supply from major producers such as Enviva (United States), Graanul Invest (Baltic States) and Pinnacle Renewable Energy (Canada), as well as smaller-scale regional suppliers such as An Viet Phat (Vietnam) and FRAM Renewable Fuels, Highland Pellets and Pacific Bioenergy (all United States).141 These companies have invested in production capacity and logistics to match long-term supply contracts from major power producers in Europe and Asia.142

The United States has been the major producer and exporter of wood pellets, with most of the production taking place in the country’s south-east.143 US pellet production increased 15% in 2019 to around 8.7 million tonnes, and exports rose 9% to 6.1 million tonnes.144 One US company, Enviva, announced plans to build a facility in the state of Alabama to produce around 1,150,000 metric tonnes of wood pellets annually, which would be transported by river to a planned export terminal in Mississippi and then exported to Europe and Asia.145

The wood pellet market first developed in the EU, where power producers opted initially to co-fire the pellets with coal and then to convert coal plants to use pellets as a way to prolong the life of these assets.146 More recently, the wood pellet market has expanded in Japan and the Republic of Korea, stimulated by favourable support schemes.147

In Japan, where biomass generation is based mainly on new dedicated generation capacity, pellet supply is dependent on long-term contracts and is imported mostly from North America.148 In 2019, Mitsui (Japan) announced a contract with Pinnacle Renewable Energy to procure 100,000 tonnes of wood pellets.149

In the Republic of Korea, the market for wood pellets has been based mostly on co-firing. However, dedicated biomass plants are being built as well, with Pinnacle supplying 100,000 tonnes of pellets annually to GS Global, the country’s first dedicated independent bio-power producer.150 Republic of Korea’s pellets are sourced in Vietnam and elsewhere in Asia on relatively short-term contracts.151

Debate has continued regarding the carbon savings and other environmental impacts related to pellet production and use.152 Some countries have introduced stricter and more comprehensive sustainability regulations governing the sources that can be used for wood pellets; in the EU, for example, the sustainability provisions in the Renewable Energy Directive now extend to solid biomass.153 In response, the pellet industry has developed more complex and open track-and-trace systems to account for wood sourcing.154 The leading independent certification body for pellet producers, the Sustainable Biomass Programme, began as an industry initiative but has broadened its governance to include representation from non-governmental and other stakeholders. 155

Most of the pellet supply is produced from wood residues that are dried and compressed, which results in a product with a higher energy density than wood chips. However, work is ongoing to develop and commercialise pellets made by torrefactionviii, which have an even higher energy density and can substitute for coal. In 2019, Clean Electricity Generation (United Kingdom) delivered its “BioCoal” pellets for trials at a district heating system in France, ahead of the development of a commercial-scale plant in Estonia that aims to produce 157,000 tonnes of pellets a year.156

Liquid Biofuels Industry

In 2019, HVO/HEFA plants in the pipeline were enough to

triple

global production capacity.

The liquid biofuels industry is concentrated on the production of ethanol, FAME biodiesel and increasingly HVO/HEFA, which together make up the bulk of global biofuels production and use. In 2019, the industry, particularly in the United States, was negatively affected by trade and other restrictions that constrained production in some markets. Several US ethanol plants, including facilities belonging to the two largest US producers, POET and Archer Daniels Midland, had to cut production because of constraints to domestic demand and export opportunities.157 In addition, eight US biodiesel plants were closed, and other plants operated at reduced capacity, although several new biodiesel plants also came online or were being planned in the country.158

To meet rising biofuel demand from both road transport (especially heavy goods vehicles) and aviation, the biofuels industry has increased its investments in facilities that produce HVO/HEFA from feedstocks based on waste, residues and virgin vegetable oils.159 If all HVO/HEFA plants that were under construction or planned in 2019 came online, global production capacity would triple to more than 22 billion litres annually.160

In North America, nearly 4 billion litres of additional renewable dieselix production capacity was under construction at year’s end, and HVO production capacity was rising steadily, mainly in the United States.161 Growth was stimulated by the country’s RFS and particularly by the Low Carbon Fuel Standard in California.162 World Energy (United States) announced a USD 350 million expansion project to complete the conversion of a former oil refinery in Paramount, California to produce up to 1.3 billion litres of renewable diesel, biojet fuel, green gasoline and renewable propane.163 Ryze Renewables (United States) was building two projects in the US state of Nevada with a combined capacity of 568 million litres per year, and Marathon Petroleum (United States) was in the process of converting its oil refinery in North Dakota to produce 700 million litres annually by late 2020.164

In the EU, where the new Renewable Energy Directive is expected to drive up demand for advanced biofuels by 2030, the operational and planned HVO capacity increased in 2019, with more than 3 billion litres of capacity coming online.165 Total (France) began production at its La Mède site, following an EUR 275 million (USD 308 million) conversion of its oil refinery to produce 640 million litres of HVO annually from vegetable oils (rapeseed, palm, sunflower, etc.) and treated waste (animal fats, cooking oil, residues, etc.).166

ENI opened a newly converted biorefinery in Gela, Italy that can produce nearly 1 billion litres of HVO per year, and planned to invest another EUR 93 million (USD 104 million) in a plant to pretreat waste feedstocks.167 In Sweden, the oil company ST1 invested SEK 1.5 billion (USD 160 million) in a hydrogen plant to produce 250 million litres annually of HVO, due to start operation in 2020.168 PKN Orlen (Poland) began producing HVO from used cooking oil and vegetable fats at its plants in Płock and Litvínov to help meet rising demand.169

Elsewhere in the world, Neste (Finland), the world’s largest HVO producer, began building a EUR 1.5 billion (USD 1.68 billion) renewable diesel production facility in Singapore, which was expected to add 1.7 billion litres of annual capacity and bring the company’s global production to 5.8 billion litres.170 ECB (Brazil) announced plans to build an HVO plant in Assuncion, Paraguay that would produce HVO from soya for export to Canada, Europe and the United States.171

Industry efforts to demonstrate the production and use of a wider range of advanced biofuels continued. Although production has remained limited, the industry aims to increase the development of biofuels that show improved sustainability performance and that benefit from the EU Renewable Energy Directive, the US RFS, RenovaBio and other schemes designed to encourage the uptake of low-carbon fuels.172 Some advanced biofuels can replace fossil fuels directly in transport systems (“drop-in biofuels”), including in aviation, or can be blended in high shares with conventional fuels in road transport.173

Many pathways are under development to produce advanced biofuels, including bio-based fuels (from an array of feedstocks) in the form of ethanol, butanol, diesel jet fuel, gasoline, biomethanol and mixed higher alcohols.174 The most advanced pathways include the production of ethanol from cellulosic feedstocks (such as cereal residues) by enzymatic processes, and the use of pyrolysis, gasification and other thermal processes. An increasing focus is on producing biofuels for aviation.

So far, few cellulosic ethanol production plants have reached their design output due to ongoing technical and commercial challenges.175 For example, the POET-DSM plant in Emmetsburg, Iowa in the United States halted routine production in 2019 to concentrate instead on research and development (R&D) to improve plant performance.176 Meanwhile, VERBIO (Germany) purchased DuPont’s commercial-scale cellulosic ethanol plant in Iowa, which ceased operations in 2017, and is converting the plant to produce methane from straw using anaerobic digestion, starting in 2020.177

More positive trends were observed elsewhere in 2019. In Europe, Clariant (Switzerland), which had been operating a demonstration cellulosic ethanol plant in Germany, announced that it was building a full-scale commercial plant in Romania.178 The company also licensed its technology for a large-scale plant in the Slovak Republic and negotiated licences in China and Poland.179 ENI (Italy) took over the Biochemtex cellulosic ethanol plant in Crescentino, Italy – which was closed following the failure of the parent com-pany in 2017 – and planned to restart production in 2020.180

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In Latin America, GranBio (Brazil), which commissioned an 82 million litre per year plant at Alagoas (Brazil) in 2014 but shut it down in 2016 due to technical problems, restarted production with a goal of 30 million litres in 2019 and 50 million litres in 2020.181 Raizen (Brazil) built up production levels at its plant in Costa Pinto, to around 12 million litres in 2017/2018 and an expected 40 million litres (the rated capacity) in 2018/2019.182

Commercialisation of thermal advanced biofuel processes, such as pyrolysis and gasification, continued as well. Enerkem (Canada) aimed to add to its portfolio of plants, which gasify waste to produce ethanol, by developing new projects in the US states of Massachusetts and Minnesota.183 Construction also was under way at the Red Rock Biofuels LLC biorefinery in Lakeview, Oregon, which will use Fischer-Tropschx technology to convert around 123,000 metric tonnes of wood waste annually into more than 57 million litres of renewable jet diesel and petrol blend-stock fuels.184

In Europe, Green Fuel Nordic Lieksa Oy (Finland) announced plans to invest EUR 100 million (USD 112 million) in BTG’s (Netherlands) pyrolysis technology to produce heating oil from wood waste produced by a local sawmill in Lieska.185 BTG aims to build a plant in Rotterdam, the Netherlands, in partnership with GoodFuels (Netherlands) to produce fuels for shipping.186

In Sweden, in a joint venture, the timber producer Sodra and the oil company Preem (both Sweden) will produce pyrolysis oil using 35,000 to 40,000 tonnes of wood residues annually, which will be processed at an oil refinery into bio-based gasoline and diesel fuels for use in transport.187 Shell (Netherlands) announced funding for further development of the company’s IH2 process with Biotin (Norway) and Preem to produce biocrude in Norway from 1,000 tonnes of wood residues per day.188

Although biofuels replaced only 0.1% of aviation fuel in 2018, developments in the sector in 2019 aimed to reduce emissions and to boost collaboration among potential aviation biofuel producers, airlines and airports, driven by industry carbon reduction targets.189 SkyNRG announced plans to develop Europe’s first dedicated sustainable aviation fuel plant, using regional waste and residue streams in the Netherlands.190 Amsterdam’s Schiphol airport pledged to invest in the facility, and the Dutch airline KLM committed to purchasing 75,000 tonnes annually from the plant for 10 years; in addition, SHV (Netherlands), a leader in distribution of liquefied petroleum gas, said it would buy the bioLPG produced as a by-product.191

Elsewhere in Europe, Lufthansa was collaborating with Neste (Finland) to use sustainable aviation fuel blended with fossil jet fuel on flights from Frankfurt, Germany.192 Norway’s state-owned airport operator Avinor partnered with Quantafuel (Norway) to buy sustainable aviation fuel produced in a pilot plant funded in part by the Norwegian investment bank ENOVA. If successful, the facility, which uses wood chips and sawdust as feedstocks, would be expanded to a full-scale plant producing 7-9 million litres a year.193

In the United States, Shell Aviation and HVO producer World Energy agreed to develop a scalable supply of sustainable aviation fuel. World Energy would produce the fuel from agricultural waste fats and oils at its new refinery in Paramount, California and then supply a total of 1 million gallons (3.8 million litres) to Lufthansa Group at San Francisco International Airport for use on flights from San Francisco to Frankfurt, Munich and Zurich.194 The airline Jet Blue (United States) agreed to purchase sustainable aviation fuel from Neste in New York starting in 2020; the fuel would be shipped via fuel pipeline to the airport, where it would be blended with regular fuel.195

Also in 2019, Delta Airlines (United States) invested USD 2 million in Northwest Advanced Bio-Fuels (United States) to study the feasibility of a facility to produce sustainable aviation fuel and other biofuel products in Washington state.196 The company also agreed to purchase 10 million gallons (38 million litres) per year of advanced renewable biofuels from Gevo (United States).197 United Airlines (United States) agreed to purchase up to 10 million gallons (38 million litres) of sustainable aviation fuel in 2020 and 2021, and committed USD 40 million to a new investment vehicle focused on accelerating the development of sustainable aviation fuels and other decarbonisation technologies.198

In Canada, the Green Aviation Research and Development Network, Sky NRG, Waterfall Group and Vancouver Airport Authority jointly announced the launch of BioPortYVR, an industry-led project to increase the country’s supply of sustainable aviation fuel.199

Gaseous Biomass Industry

Industry involvement in the gaseous biomass sector relates mainly to the production and use of biogas, which until recently was used mainly for electricity production, stimulated by favourable feed-in tariffs and other support mechanisms.200 The industry, particularly in North America, Europe and China, is diversifying by refining increasing amounts of biogas to biomethane for use as a transport or heating fuel.201

Biogas can be upgraded to biomethane by removing the CO2 and impurities, facilitating its injection into natural gas pipelines when appropriate quality standards can be met.202 Increasingly, policy makers have considered this as an important route to decarbonising the heating and transport sectors.203 Systems for producing and converting biogas to biomethane were widely deployed in 2019, with the refined biomethane either being injected into natural gas pipelines for use for heating or being used directly for transport.

US biomethane production capacity grew strongly during the year, with several new projects under development by US companies. RNG Energy Solutions was involved in building two new anaerobic digesters in Pennsylvania and New Jersey, each capable of processing 1,100 tonnes of organic waste daily to produce 3.2 terajoules of renewable natural gas (RNG), equivalent to 26,000 gallons (100,000 litres) of petrol.204 The utility Dominion Energy invested USD 500 million to convert methane from pig farms to RNG, as well as USD 200 million in a project with Vanguard Renewables to produce RNG from dairy waste in five states.205 Threemile Canyon Farms and Equilibrium opened a USD 55 million facility in Oregon that produces RNG from dairy waste; the plant uses manure from 33,000 dairy cows to feed an anaerobic digestion system, followed by a biogas clean-up system that injects RNG into the grid for use as transport fuel in California.206

Biomethane installations also have grown rapidly in Europe. Seventy new plants were installed in the region in 2018, bringing the European total to 660 plants producing some 90 PJ (2.3 billion cubic metres) of biomethane.207

Although the United States and Europe are the main centres of biomethane production, India’s minister of petroleum and natural gas announced plans to build some 5,000 compressed biogas plants across the country by 2023, using agricultural residues, cattle dung and municipal solid waste to produce 750 PJ (15 million tonnes) of biomethane annually.208

The move to biomethane has stimulated the active interest of large international players. ENGIE (France) had a portfolio of more than 80 biomethane projects in 2019; the company planned to produce some 18 PJ annually by 2020 and to invest EUR 2 billion (USD 2.24 billion) in the technology by 2030.209 The industrial gas supplier Air Liquide (France) has attributed the 30% growth in revenue of its Global Markets and Services Division in 2018 (to USD 494 million) to the company’s biogas-related activities in Europe and North America.210

Although anaerobic digestion accounted for nearly all of the biogas and biomethane used in 2019, biomethane also can be produced through the thermal gasification of biomass. The technology has been demonstrated technically at scale, but no commercial plants were in operation by year’s end.

However, a EUR 175 million (USD 195 million) commercial-scale plant, developed by the clean energy company Progressive Energy (United Kingdom), was approved for Ellesmere Port in the United Kingdom and will use unrecyclable wood and refuse-derived fuel to produce biomethane.211

Bioenergy with Carbon Capture and Storage or Use

Many low-carbon scenarios depend on the capture and storage of carbon dioxide emitted when bioenergy is used to produce heat, electricity or transport fuels.212 Removal from the atmosphere of CO2 produced in bioenergy production, which is considered part of the carbon cycle, is seen as having a double benefit that leads to “negative emissions”.213 Although policy makers and analysts have shown rising interest in such options, in the absence of strong policy drivers that might make projects economically attractive, very few projects demonstrating these technologies have operated at scale so far.214

Examples exist of CO2 from bioenergy projects being separated and used for various industrial applications, but only around five commercial-scale projects using bioenergy with carbon capture and storage (BECCS) were in operation at the end of 2019.215 These included a large-scale project at an Archer Daniels Midland (United States) ethanol distillery in the US state of Illinois, which captured around 1 million tonnes of CO2 per year, and four other projects that were linked to ethanol distilleries in Canada and the United States.216

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Additional pilot-scale projects demonstrating carbon capture were pursued during the year. Drax Power, working with C-Capture (United Kingdom), invested GBP 400,000 (USD 525,000) in a pilot carbon capture project at its large-scale bio-power plant in the United Kingdom – the first such project in Europe.217 CO2 Solutions (Canada) installed a carbon capture unit at the Saint Félicien pulp mill in Quebec, Canada; the unit uses an enzymatic technology to capture 30 tonnes of CO2 per day, which is then reused at an adjacent greenhouse complex.218

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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

iiModern bioenergy is any production and use of bioenergy that is not classed as “traditional use of biomass”.ii

iiiExcluding the contribution to building heating from district heating; see discussion later in this section.iii

ivThis section concentrates on biofuel production, rather than use, because the available data on production are more consistent and up-to-date. Global production and use are very similar, and much of the world’s biofuel is used in the countries where it is produced, although significant export/import flows exist, particularly for biodiesel.iv

vThe word “corn” has various meanings depending on the geographical region. 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 48 for this section.v

viThe RenovaBio initiative introduces emissions reduction targets for fuel distributors, who can demonstrate compliance by buying traded emissions reductions certificates awarded to biofuel producers.vi

viiMunicipal 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”.vii

viiiTorrefaction of biomass is a mild form of pyrolysis at temperatures typically between 200 and 320 degrees Celsius (°C). which changes biomass properties to provide a better fuel quality for combustion and gasification applications.viii

ixHVO/HEFA fuels are often referred to as renewable diesel, especially in North America.ix

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

Geothermal Power and Heat

  • An estimated 0.7 GW of new geothermal power generating capacity came online, with Turkey, Indonesia and Kenya leading new installations.
  • Direct use of geothermal energy for thermal applications grew most rapidly in space heating, with China, Turkey, Iceland and Japan representing 75% of direct geothermal use.
  • As in previous years, the geothermal Industry was inhibited by challenges of high project costs and lack of adequate funding. Research into new and innovative technologies and processes helped fuel optimism for the future.

Geothermal Markets

Bio-heat Markets

Transport Biofuel Markets

Bio-power Markets

Geothermal Industry

Solid Biomass Industry

Bioenergy with Carbon Capture and Storage or Use

Liquid Biofuels Industry

Gaseous Biomass Industry

HYDROPOWER

  • The global hydropower market contracted in 2019, continuing a multi-year trend of deceleration.
  • Hydropower generation increased, reflecting new capacity as well as shifting weather patterns and other operational conditions.
  • Brazil took the lead in new hydropower capacity, marking the first year since 2004 that China did not maintain a wide lead over other countries for new installations.
  • The hydropower industry is grappling with a web of challenges, ranging from technical and economic aspects of the industry to hydropower’s relationship with other renewable energy sources.

Hydropower Markets

Hydropower Industry

OCEAN POWER

  • Ocean power generation rose substantially in 2019, surpassing 45 GWh.
  • The industry began moving from small-scale demonstration and pilot projects towards semi-permanent installations and arrays of devices.
  • Maintaining revenue support to ocean power technologies is considered paramount for allowing the industry to achieve greater maturity.

Ocean Power Markets

Ocean Power Industry

Solar Photovoltaics (PV)

  • Solar PV markets saw more capacity installed than ever before, with the strong demand in Europe, the United States and emerging markets making up for a substantial decline in China.
  • Corporate purchasing expanded considerably, and self-consumption (increasingly with battery storage) was an important driver for new distributed systems in some countries.
  • The industry continued to face strong competition which, coupled with policy uncertainties, resulted in extremely low bids at some auctions and thin margins for developers and manufacturers; at the same time, competition and price pressures encouraged more efficient manufacturing and ongoing innovation.
  • Solar PV accounted for high shares of electricity generation in countries including Honduras (10.7%), Italy (8.6%), Greece (8.3%), Germany (8.2%) and Chile (8.1%).

Solar PV Markets

Solar PV Industry

Concentrating Solar Thermal Power (CSP)

  • Global CSP capacity in operation again grew exclusively in emerging markets and spread to new countries including Israel, Kuwait and France.
  • An estimated 21 GWh of thermal energy storage was operating in conjunction with CSP plants across five continents.
  • Levelised costs of energy from CSP continued to decline, with CSP being built increasingly alongside both solar PV and wind power to lower costs and raise capacity value.

CSP Markets

CSP Industry

SOLAR THERMAL HEATING AND COOLING

  • China remained the world’s largest national market for solar thermal systems, followed distantly by the United States, Turkey, Germany and Brazil.
  • Outside China, new additions in the largest solar heating and cooling markets were stable, with growth in some markets balancing declines in others.
  • The year saw record-high additions of solar industrial heat capacity, led by Oman, China and Mexico.
  • The largest collector manufacturers stabilised their production volumes on average, but small and medium-sized collectors faced increased pressure.

Solar Thermal Heating and Cooling Markets

Solar Thermal Heating and Cooling Industry

Wind Power

  • The global wind power market saw its second largest annual increase, with offshore wind accounting for a record 10% of new installations.
  • Market growth reflected surges in China and the United States in advance of policy changes, and a significant increase in Europe despite continued market contraction in Germany.
  • At least 102 countries had some level of commercial wind power capacity, enough to provide an estimated 5.9% of global power generation; the highest shares of generation were in Denmark (57%), Ireland (32%), Uruguay (29.5%) and Portugal (26.4%).
  • Falling prices are opening new markets, but the global transition to auctions and tenders has resulted in intense price competition, reducing the number and diversity of participants and leading to further attrition among turbine manufacturers.

Wind Power Markets

Wind Power Industry

BOX 1. Small-scale Wind Power