BIOENERGY

  • Modern bioenergy provided 5.1% of total global final energy demand in 2019, accounting for around half of all renewable energy in final energy consumption.
  • Modern bioenergy for industrial process heat grew around 16% between 2009 and 2019, while bio-heat demand in buildings grew 7% over the same period.
  • In 2020, global biofuel production fell 5%, with ethanol production down 8%, while biodiesel production rose slightly to meet increased demand in Indonesia, the United States and Brazil.
  • Bioelectricity production grew 6% in 2020, with China the major producer.

Bioenergy involves the use of biological materials for energy purposes. A wide range of materials can be used, including residues from agriculture and forestry, solid and liquid organic wastes (including municipal solid waste (MSW)i and sewage), and crops grown especially for energy.1 Many different processes can convert these feedstocks into heat, electricity and fuels for transport (biofuels). While some of these processes are fully established, others are in the earlier stages of development, demonstration and commercialisation.2

Bioenergy Markets

The amount of

biomass used for heating

has grown 11% since 2009.

Biomass provides energy for heating in industry and buildings, transport and electricity production. Overall, bioenergy accounted for an estimated 11.6%, or 44 exajoules (EJ), of total final energy consumption in 2019 (latest available data).3 More than half of this total bioenergy came from the traditional use of biomassii, which provided around 24.6 EJ of energy for cooking and heating in developing and emerging economies, notably in Sub-Saharan Africa.4

Other more modern and efficient uses of bioenergyiii provided around half of all renewable energy in final energy consumption in 2019 – an estimated 19.5 EJ, or 5.1% of total global final energy demand.5 (See Figure 1.) Modern bioenergy provided around 13.7 EJ for heating (7.3% of the global energy supply used for heating), 4.0 EJ for transport (3.3% of transport energy needs) and 1.7 EJ for global electricity supply (2.1% of the total).6 Modern bioenergy use has increased most rapidly in the electricity sector – up 27% between 2010 and 2019 – compared to around 15% growth for transport use and less than 5% for bio-heat.7

FIGURE 17.
Estimated Shares of Bioenergy in Total Final Energy Consumption, Overall and by End-Use Sector, 2019
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Note: Data should not be compared with previous years because of revisions due to improved or adjusted data or methodology. Totals may not add up due to rounding. Buildings and industry categories include bioenergy supplied by district energy networks.

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

Bio-heat Markets

The use of biomass for heating has changed relatively little in recent years.8 ( See Figure 18.) The traditional use of biomass in developing and emerging economies is to supply energy for cooking and heating in traditional open fires or inefficient stoves.9 ( See Distributed Renewables chapter.) The amount of biomass used in these applications has decreased some 9% since 2009, from 27.0 EJ to an estimated 24.6 EJ in 2019.10

FIGURE 18.
Global Bioenergy Use for Heating, by End-Use, 2009-2019
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Source: Based on IEA. See endnote 8 for this section.

Because of the negative effects of the traditional use of biomass on local air quality and public health, as well as the unsustainable nature of much of the biomass supply, governments and international organisations are making significant global efforts to improve access to cleaner fuels for cooking and heating.11 These fuels include fossil-based liquefied petroleum gas (LPG), electricity, and cleaner forms of biomass, such as ethanol fuels and wood briquettes and pellets.12

Modern bioenergy can provide heat efficiently and cleanly for industry and for residential, public and commercial buildings. The final user can consume biomass directly to produce bio-heat in a stove or boiler. Alternatively, bio-heat can be produced in a dedicated heat or district heating plant (including through the co-generation of electricity and heat using combined heat and power (CHP) systems) and distributed through the grid to final consumers. 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.13

In 2019 (latest data available), modern bioenergy applications provided an estimated 13 EJ of direct heat, an 11% increase from 2009.14 In addition to the direct use of bio-heat in industry and buildings, bioenergy provided some 0.7 EJ to district heating systems in 2019; 51% of this was used in industry and agriculture and the remainder in buildings.15 Bioenergy is the major source of renewable heat in district heating systems, accounting for 95% of all renewable heat supplied.16 Its contribution grew 57% between 2010 and 2019.17

In 2019, 9.1 EJ of biomass was used to provide heat for industry and agriculture, meeting a combined 9.5% of these sectors’ heat requirements.18 Bio-heat demand in the two sectors has grown 16% since 2009.19 Modern bioenergy provided 4.7 EJ to the buildingsiv sector in 2019, or around 5.0% of its heat demand.20 The amount of bio-heat provided to buildings has increased 7% since 2009.21

Although final data for 2020 were not available at the time of publication, total energy use for heating was expected to decrease around 3.1% due to the economic effects of the COVID-19 pandemic.22 The decline was expected to be highest in industry, down a projected 4.1%, due to the curtailment of industrial production in most regions (except China).23 The use of bioenergy for industrial heat was expected to fall by the same percentage, but to hold its market share.24 Heat use in buildings was projected to decrease 1.8%, with most of the decline occurring in commercial heating because of increased working and schooling from home.25 Total bioenergy consumption in 2020 was expected to remain at 2019 levels.26

Industry use of biomass for heat production is primarily in bio-based industries, such as paper and board, sugar and other food products, and wood-based industries. These industries often use their wastes and residues for energy, including the “black liquor” produced in paper manufacture.27

Bioenergy is not yet widely used in other industries. However, biomass and waste fuels met around 6% of the cement industry’s global energy needs in 2019.28 In Europe, these fuels provided around 25% of the energy used in cement making in 2019.29 The use of biomass and waste fuels for cement production in China is also growing.30

Bioenergy use for industrial heating is concentrated in countries with large bio-based industries, such as Brazil, China, India and the United States. Brazil uses large quantities of sugarcane residue (bagasse) from sugar and ethanol production to generate heat in CHP systems, producing an estimated 1.6 EJ in 2019.31 India, also a major sugar producer, was the second largest user of bioenergy for industrial heat (1.4 EJ), followed by the United States (1.3 EJ), which has an important pulp and paper industry.32

Biomass can produce heat for space heating in buildings 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 developed economies as well as in developing and emerging ones.33 This can be a significant source of local air pollution if inefficient appliances and/or poor-quality fuels are used.34 Stringent national regulations are being introduced to control emissions from small combustion facilities. Systems that can meet these requirements are commercially available, but at a higher cost.35 Larger-scale systems, such as those used for district heating, can meet air quality requirements more easily and economically.

Modern use of bio-heat in buildings has been concentrated in the European Union (EU), which accounted for 47% of this total use in 2019, increasing 2% during the year to 3.8 EJ.36 Policy measures that aim to promote renewable heat alternatives to meet the requirements of the EU Renewable Energy Directive (RED) – such as capital grants for biomass heating systems – have generated the growth in biomass use. Limiting the use of oil and natural gas for heating also plays an important role in stimulating alternative heat sources including biomass.37 France, Germany, Italy and Sweden accounted for around half of the EU’s bio-heat demand in 2019.38

Most of the biomass fuel used to heat buildings is in the form of logs and wood chips. However, the use of wood pellets for heating has been growing rapidly and was up 6% globally in 2019, to around 19.2 million tonnes (345 petajoules, PJ).39 The bulk of the pellets (77%) were used in residences, with the rest consumed at commercial premises.40 The EU remained the largest user (16.4 million tonnes or 294 PJ), with Italy still the world’s largest market for pellet heating (3.4 million tonnes), followed by Denmark and Germany (2.3 million tonnes each), France (1.8 million tonnes) and Sweden (1.2 million tonnes).41 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 2019.42

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North America was the second leading user of bioenergy in buildings in 2019. More than 1.8 million US households (1.4% of the total) relied on wood or wood pellets as their primary heating fuel, and an additional 8% used wood as a secondary heat source.43 Use was concentrated in rural areas, with one in four rural US households combusting wood for primary or secondary space heating.44 Total wood use in the US residential sector amounted to 0.55 EJ.45 In Canada, the residential heating sector used some 0.13 EJ of bio-heat from wood fuels in 2019.46 North America was the second largest regional market for pellets for building heating, up 4% in 2019 to 2.6 million tonnes (47 PJ).47 Smaller-scale markets were found in non-EU Europe (0.9 million tonnes) and Asia (0.3 million tonnes), principally in the Republic of Korea (0.2 million tonnes) and Japan (0.1 million tonnes).48

Europe leads in the use of bioenergy in district heating. District heating (from all sources) supplied around 12% of the EU’s heat demand in 2018.49 The residential sector was the major user of district heat (45%), followed by the industrial (33%) and commercial and services (21%) sectors.50 District heating meets at least 30% of heat demand in seven countries, including a 45% share in Denmark.51

This provides an important market opportunity for biomass, which supplied around 25% of all district heating in Europe in 2018 (620 PJ).52

Sweden was the largest user of bioenergy for district heating (130 PJ) in 2018, followed by Germany, Denmark and Finland (75 PJ each) and France (69 PJ), where the use of bioenergy grew 35% between 2015 and 2019, promoted by the Fonds Chaleur support system.53 Lithuania has the highest share of district heat from biomass (65%, or 23 PJ); the country’s use of bioenergy for this purpose has grown three-fold since 2010, driven mainly by the need to reduce dependency on imported oil to lower costs and improve energy security.54 Bioenergy use has led to a 60% reduction in Lithuania’s carbon dioxide (CO2) emissions from heating.55

Transport Biofuel Markets

Global productionv of liquid biofuels decreased 5% in 2020, dropping from 4.0 EJ (161 billion litres) in 2019 to 3.8 EJ (152 billion litres), as overall demand for transport fuels fell as a consequence of the COVID-19 pandemic.56 While ethanol volumes declined sharply in 2020, biodiesel production and use held steady.57 Lower transport demand for diesel fuel was offset by higher blending requirements and other factors, and the production and use of hydrotreated vegetable oil (HVO)vi increased significantly.

The United States remained the world’s leading biofuel producer, with a 36% share in energy terms, despite a reduction in the country’s ethanol production.58 The next largest producers were Brazil (26%) followed by Indonesia (7.0%), Germany (3.4%) and China (3.0%).59 In total, in 2020, ethanol accounted for around 61% of biofuel production (in energy terms), fatty acid methyl ester (FAME) biodiesel for 33%, and HVO for 6%.60 ( See Figure 19.) Other biofuels included biomethanevii and a range of advanced biofuels, but their production remained low, estimated at less than 1% of total biofuels production.61

Although ethanol production dropped sharply in 2020,

biodiesel production

remained steady.

Global production of ethanol decreased 8%, from 115 billion litres in 2019 to 105 billion litres in 2020.62 Ethanol is produced primarily from cornviii, sugar cane and other crops. The United States and Brazil, the two leading producers, accounted for 51% and 32%, respectively, of global production, followed by China, India, Thailand and Canada.63

US ethanol production fell 11% in 2020 to 53.2 billion litres, the lowest level since 2014, from 59.7 billion litres in 2019.64 The country’s ethanol consumption fell 12%, mirroring the 13% decline in petrol use in transport as blending opportunities were constrained and ethanol prices fell.65 Many ethanol producers reduced output due to lower demand, negative operating margins and limited storage capacities.66

Ethanol production in Brazil decreased 6% to 34.0 billion litres, down from 36.0 litres in 2019.67 Overall, petrol consumption in the country fell some 11% due to declining demand.68 The drop in petrol use directly influences ethanol sales, as all petrol in Brazil contains 27% ethanol by volume.69 Low oil prices also affect the competitiveness of 100% ethanol, which is widely available in the country.70 Most Brazilian ethanol comes from sugar cane, with some 350 sugar ethanol mills operating nationwide.71

However, a growing share of ethanol is produced from corn, and as of mid-2020 some 16 corn ethanol production plants were in operation and 7 more under construction.72 Most of the plants can process both sugar cane and corn. Corn-based ethanol production in Brazil more than doubled in 2020, to 2.5 billion litres.73

China’s ethanol production increased 3% to 4.0 billion litres in 2020 to meet growing domestic demand.74 Petrol demand in the country fell some 7%, but growth in ethanol demand continued as 10% ethanol blends (E10) were extended to more provinces.75 Production capacity doubled between 2017 and 2020, and several large new plants were in development.76

Ethanol production in India fell some 8% in 2020 to 1.8 billion litres, as petrol demand dropped 13% and as lower oil prices reduced the affordability of ethanol relative to unblended gasoline.77 Canadian ethanol production remained stable in 2020, at 1.8 billion litres, while in Thailand, production fell 9% to 1.5 billion litres.78

Global production of biodiesel increased slightly (less than 1%) to 46.8 billion litres in 2020, up from 46.5 billion litres in 2019.79 Its production is more widely distributed than that of ethanol; 11 countries account for 80% of global biodiesel production, compared to just 2 countries for ethanol.80 This is due to the wider range of biodiesel feedstocks that can be processed, including vegetable oils from palm, soy, and canola, and a range of wastes and residues, including used cooking oil. In 2020, Indonesia was again the lead biodiesel producer (17% of the global total), followed by the United States (14.4%) and Brazil (13.7%).81 The next largest producers were Germany (7.4%), France (5.0%) and the Netherlands (4.6%).82

Despite an estimated 12% reduction in demand for diesel for transport, Indonesia’s biodiesel production grew 11% in 2020, to 8.0 billion litres.83 In the face of growing dependency on imported oil, the blending level in the country is being increased gradually to prioritise domestically produced biodiesel, primarily from palm oil. The diesel blending level was increased from 20% to 30% in January 2020 and was expected to rise to 40%.84

FIGURE 19.
Global Production of Ethanol, Biodiesel and HVO/HEFA Fuel, by Energy Content, 2010-2020
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Note: HVO = hydrotreated vegetable oil; HEFA = hydrotreated esters and fatty acids; FAME = fatty acid methyl esters

Source: See endnote 60 for this section.

While total US diesel demand fell 5% in 2020 due to the impacts of the COVID-19 pandemic, biodiesel production in the country rose more than 3% to 6.8 billion litres, boosted by the federal Renewable Fuel Standard (RFS2) and by California’s Low Carbon Fuel Standard (LCFS).85 In addition, the federal Biodiesel Blender’s Tax Credit was reintroduced.86 Increased duties on biodiesel imports from Indonesia and Argentina also favoured US domestic biodiesel production.87

In Brazil, biodiesel production rose 9% to a record 6.4 billion litres to meet increased domestic demand.88 The country’s biodiesel blending requirement increased from 11% to 12% and was scheduled to rise to 15% by 2023.89

In Germany, reduced diesel fuel use limited biodiesel demand, and production fell an estimated 9% to 3.5 billion litres in 2020, down from 3.8 billion litres in 2019.90 Production in France also declined slightly to 2.4 billion litres, while production in the Netherlands stayed stable at 2.1 billion litres.91

Argentina dropped from fifth to ninth place among producers as biodiesel production decreased some 35% to 1.6 billion litres, with US duties on biodiesel imports discouraging trade.92

HVO production, a process of hydrogenating bio-based oils fats and greases, continued to grow sharply in 2020, rising 12% to an estimated 7.5 billion litres, up from 6.5 billion litres in 2019.93 While early production capacity was concentrated in Finland, the Netherlands and Singapore, HVO capacity in the United States has increased rapidly in recent years, in line with the surging US market for these fuels.94 HVO use in the country is heavily incentivised by the RFS2, by California’s LCFS and by the availability of an investment tax credit.95 US use of HVO under the RFS2 grew some 48% in 2020, to 3.5 billion litres (114 PJ).96

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The United States and Brazil, the two leading producers of biofuels, account for around 80% of

global production.

Biomethane is used as a transport fuel mainly in Europe and the United States (the largest producer and user of biomethane for transport).97 US production and use of biomethane is also stimulated by the RFS2 (which includes biomethane in the advanced cellulosic biofuels category) and by California’s LCFS, thereby qualifying for a premium.98 US biomethane use under the RFS2 increased 24% in 2019 to around 41 PJ.99

In Europe, the use of biomethane for transport increased 74% in 2019 to 14 PJ (latest data available).100 Sweden remained the region’s largest biomethane consumer, using nearly one-third of the total, followed by the United Kingdom (where biomethane use increased five-fold in 2019), Germany and Italy (where use rose from nearly zero to 1.7 PJ in 2019).101

Although efforts to develop other “advanced biofuels” continued, and some new production capacity was installed ( See Industry section in this chapter.), these fuels have been produced and used only in small quantities to date. For example, the contribution of cellulosic ethanol under the US RFS2 scheme declined by a factor of five in 2020 to below 0.2 PJ.102

Bio-power Markets

Global bio-power capacity increased an estimated 5.8% in 2020 to around 145 gigawatts (GW), up from 137 GW in 2019.103 China had the largest capacity in operation by the end of 2020, followed by the United States, Brazil, India, Germany, the United Kingdom, Sweden and Japan.104

Total bioelectricity generation rose some 6.4% to around 602 terawatt-hours (TWh) in 2020, from 566 TWh in 2019.105 ( See Figure 20.) China remained the leading producer of bio-power, followed by the United States and then Germany, Brazil, India, the United Kingdom and Japan.106

FIGURE 20.
Global Bioelectricity Generation, by Region, 2010-2020
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Source: See endnote 105 for this section.

In line with the provisions of the country’s 13th Five-Year Plan (2016-2020), China’s bio-power capacity rose 26% to 22.5 GW in 2020, up from 17.8 GW in 2019.107 Generation increased 23% to more than 111 TWh.108 In 2020, 77 additional projects, with a combined capacity of 1.7 GW, were approved for financial support in 20 provinces.109 They included projects using municipal waste (1.2 GW), agroforestry raw materials (0.5 GW) and biogas power generation (21 megawatts, MW).110

The United States had the second highest national bio-power capacity and generation in 2020.111 The country’s 16 GW capacity did not change significantly.112 Generation fell 2.5% to 62 TWh, continuing the trend of recent years.113

Brazil was the third largest producer of bioelectricity globally, with most of the country’s generation based on sugarcane bagasse.114 Brazil’s generation fell an estimated 10% to 50 TWh in 2020, as sugar production and the related electricity generation was reduced.115

In the EU, bio-power capacity grew around 4% in 2020 to 48 GW, and generation increased 4% to 205 TWh, providing 6% of all generation.116 This increase occurred as countries pushed to meet the region’s mandatory national targets for 2020 under the RED.117 Germany remained the region’s largest bioelectricity producer, mainly from biogas: capacity increased 400 MW in 2020 to 10.4 MW, and generation rose 0.8% to 51 TWh.118 Generation surged in the Netherlands (up 90%) to 11 TWh as the volume of wood pellets co-fired in large power stations increased significantly, supported by the SDE feed-in premium scheme and to help the country meet its obligations under the EU RED.119

In the United Kingdom, bio-power capacity grew 135 MW to 8.0 GW.120 Generation rose 5.5% to 39.4 TWh, with increases in large-scale pellet-fired generation, biogas and MSW plants.121

In Asia, Japan’s growth in bio-power capacity and generation grew slowly during 2020, with capacity rising 9% to 5.0 GW, and generation increasing to 25 TWh.122 In the Republic of Korea, bio-power capacity rose 3% to 2.7 GW, with generation up 30% to 12.3 TWh, supported by the Renewable Energy Certificate Scheme and feed-in tariffs.123 In India, bio-power capacity increased marginally to 10.5 GW, and generation remained stable at 45 TWh.124

The use of internationally traded pellets produced from wood and agricultural by-products for power generation continued to grow. In 2019, 18 million tonnes of pellets were used for power generation, up 7% from the previous year.125 Nearly three-quarters of the pellets were used in the EU, particularly in the United Kingdom (8.5 million tonnes), Denmark (2.0 million tonnes) and the Netherlands, where use more than doubled to 0.8 million tonnes.126 The rest were used in Japan (1.5 million tonnes) and the Republic of Korea (0.9 million tonnes).127

Bioenergy Industry

Solid Biomass Industry

The companies that make up the solid biomass industry range from small, locally based entities that manufacture and supply smaller-scale heating appliances and their fuels, to major regional and global players involved in the supply and operations of large-scale district heating and power generation technology.

Most solid biomass projects rely on local feedstocks, such as wood residues and sugarcane bagasse, which can be used where they are produced. The growth in biomass pellet production to serve international markets for heat and electricity production is an important development in the sector, enabling countries to scale up the use of bioenergy even when they have limited national biomass resources.

In 2019, global production of biomass pellets reached an estimated 59 million tonnes.128 Production data for China are uncertain but reached an estimated 20 million tonnes in 2018.129 Production in the rest of the world grew 9% to 39.4 million tonnes in 2019.130 The EU remained the largest regional producer (17 million tonnes), with production rising 5% that year.131 Production from other European countries rose 17% to over 4 million tonnes, with production in the Russian Federation up 21%.132 North American production increased 12% to 12.4 million tonnes.133

Excluding China, 19 million tonnes (5,326 PJ) of biomass pellets were used worldwide to provide heat in the residential and commercial sectors.134 Pellets also provided an estimated 7.5% of the biomass used to heat buildings.135 Worldwide, 18 million tonnes (31 PJ) were used for power generation, CHP production and other industrial purposes in 2019.136

The United States was the world’s largest exporter of wood pellets in 2020.137 While US pellet production decreased 2% to 9.3 million tonnes, exports rose 1% to 6.8 million tonnes.138

The wood pellet market for power generation continued to grow in the EU, where power producers can co-fire pellets with coal or convert coal plants, or build new plants that operate entirely on pellets.139 The market also expanded in Japan and the Republic of Korea, stimulated by favourable support schemes.140 By the end of 2020, Japan’s Ministry of Economy, Trade and Industry had approved 70 projects with a capacity of nearly 8 GW under the feed-in tariff.141

Debate continues regarding the carbon savings and other environmental impacts related to pellet production from forestry materials and their use in power generation.142 Starting in 2020, the sustainability provisions in the EU’s RED included solid biomass, setting tighter sustainability criteria; as of 2021, minimum greenhouse gas reduction thresholds also were set for new projects seeking national support.143 Sustainability criteria are being put in place in Japan as well, which is expected to reduce the use of palm-based products but increase the use of certified wood pellets.144

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Liquid Biofuels Industry

The liquid biofuels industry produces ethanol, FAME biodiesel and increasingly HVO. Together, these comprise nearly all current global biofuels production and use. In addition, the industry is developing and commercialising new types of biofuels designed to serve new markets, notably for the aviation and marine sectors. These offer improved results in terms of greenhouse gas footprints and other sustainability criteria. There is a growing interest in the production of bio-materials and chemicals as part of the shift to a broader bioeconomy.145 ( See Box 6.)

In 2020, the industry was negatively affected by the lower demand for transport fuels during the COVID-19 pandemic, which constrained production and reduced profitability. At the height of the 2020 crisis, more than half of US ethanol industry production capacity was idled.146 For example, ADM announced that it would idle four of its plants for at least four months in mid-2020.147 Global ethanol prices fell 28% between January 2020 and April 2020, before recovering to within 5% of the January value by year’s end.148 In Brazil, ethanol demand was constrained and prices fell as much as 19% in 2020, with more sugar cane used for sugar than for ethanol production.149

By contrast, markets for FAME biodiesel were less affected by the pandemic. Although fossil diesel demand also fell, biodiesel levels were maintained due to higher incentives or increased blending mandates in key producing countries, such as the United States, Brazil and Indonesia.150 Biodiesel production in Argentina was affected by import duties in the United States.151

HVO production capacity rose sharply in 2020, driven by attractive market incentives, particularly those provided by the US RFS2 and California’s LCFS and under the EU’s RED.152 Many plans for new capacity were announced.153 Total HVO production capacity reached an estimated 9.2 billion litres (0.3 EJ) in 2020.154 When taking into account both the expansion of existing facilities and new production sites, the additional capacity under construction or being planned was estimated to reach more than 41 billion litres (equivalent to 1.1 EJ per year) at the end of 2020.155 With these new projects, total existing and planned HVO capacity is expected to exceed that of FAME biodiesel and to equate to around 60% of 2020 ethanol production, underscoring a significant evolution of biofuels in transport.156

Most of the existing and planned capacity is based on treating vegetable oils, animal fats and other by-products with hydrogen to produce HVO/HEFA, which then can be refined to produce fuels with the same properties as fossil-based diesel, jet fuel and other hydrocarbon products, including biopropane. When these feedstocks are wastes or by-products (such as used cooking oil, animal fats or tall oil), the greenhouse gas savings associated with their use are much higher than for virgin vegetable oils, such as palm or canola oil.157 The fuels then qualify for higher credits under biofuels support schemes. For example, under the California LCFS, HVO from used cooking oil qualifies for a credit up to twice that for HVO produced from soy oil.158 Under the EU RED, waste- and residue-based fuels are counted twice towards national targets and can earn double credits under national support schemes in member countries.159

In 2020, several companies that produce HVO fuels announced that new capacity was available or planned. For example, Phillips 66 (US) announced plans to extend production capacity at its UK Humberside plant from 57 million litres to 460 million litres per year and to convert the Rodeo facility at its San Francisco oil refinery to produce HVO and jet fuel.160 The Rodeo facility would be one of the world’s largest such plants, producing 4 billion litres of the fuels from used cooking oils, fats, greases and soy oils starting in 2024.161

Other oil majors are undertaking similar refinery conversions. Total (France) announced plans in 2020 to convert its Grandpuits refinery in the Seine-et-Marne department of France to produce biojet fuel, with an investment of EUR 500,000 (USD 0.6 million).162 This complements Total’s La Mède plant, which was converted in 2019 to produce 570 million litres of HVO and biojet from palm oil and waste fats and oils.163 ENI (Italy) converted its refineries in Venice and Sicily to make HVO and is more than doubling its capacity in Venice to more than 1.6 billion litres.164 Marathon Oil (US) planned to convert its North Dakota plant to HVO by the end of 2020, with an annual production capacity of 700 billion litres, along with its Martinez refinery (California), which is expected to reach an HVO capacity of some 3 billion litres by 2022.165 While most HVO projects are in the United States and Europe, Pertamina (Indonesia) is developing two projects in Indonesia, which will produce a combined 1.5 billion litres of HVO from palm oil under the country’s strategy to increase the share of biofuels in diesel to 40%.166

In addition to these projects, which hydrogenate oils and fats, several other technological approaches that use a wider range of feedstocks are being demonstrated and commercialised. Projects designed to produce HVO and jet fuels by gasifying MSW or forestry residue feedstocks and synthesising the resulting gas via the Fischer-Tropsch process are under development. Their aggregate capacity is over 1 billion litres of fuel and includes the use of feedstocks such as forestry and timber residues and processed MSW, which is less expensive and thus produces cheaper fuel.167

Production of

HVO biodiesel

rose sharply in 2020, driven by attractive market incentives in the United States and Europe.

The Red Rock Biofuels (US) project in Lakeview, Oregon (US) will convert 166,000 dry tonnes of waste woody biomass into 60 million litres of drop-in jet, diesel and petrol fuels to be supplied under eight-year off-take agreements with FedEx and Southwest Airlines.168 The project is based on gasification and Fischer-Tropsch technology provided by Velocys (UK). Velocys has launched a project at Immingham (UK) in collaboration with British Airways PLC and Shell (Netherlands) to produce jet fuels from MSW and is developing another in the US state of Mississippi that will use paper and timber residues from local industries.169 In 2020, Fulcrum Energy (US), which is developing two MSW projects in the United States, began work to produce jet fuel from MSW in Japan, in collaboration with Japan Airlines Marubeni, JXTX Nippon OIL and JGC Japan.170

Three projects involving pyrolysis of wastes and other feedstocks were under way in Canada and in the Netherlands at year-end 2020.171 The Lieksa plant of Green Fuel Nordic Oy (Finland), with a capacity of 24 million litres per year, also began supplying fuel oil (for heat) produced by the pyrolysis of wood residues.172

Biomethane production

is rising, and accounts for around 1% of total global fossil gas demand.

Other approaches include the conversion of ethanol to fuels such as biojet. In 2020, the FLITE consortium, led by SkyNRG (Netherlands)and Lanzatech (US), initiated a project in the Netherlands to build an ethanol-to-biojet facility to convert waste-based ethanol to sustainable aviation fuel, producing more than 30,000 tonnes per year.173 The project received EUR 20 million (USD 23 million) in grants from the EU’s Horizon 2020 programme.174

Only a small number of facilities producing ethanol from cellulosic materials were operating successfully worldwide by the end of 2020.175 During the year, construction was under way at Clariant’s (Switzerland) planned plant in Romania, and the company also has licensed its technology for projects in Bulgaria and China.176

Despite the sharp drop in air travel and related fuel use in 2020, the market for sustainable aviation fuels (SAF) – biofuels tailored for use in aircraft engines – continued to expand, with seven fuel pathways approved for use by year’s end.177 As of 2020, 45 airlines had used SAF, and 7 airlines were actively investing in SAF production capacity.178 Some 100 million litres of SAF was expected to be available for use in 2021.179 The availability of these fuels has increased at airports, with continuous supply established in 2020 at San Francisco International Airport and at London Luton Airport.180

Gaseous Biomass Industry

The gaseous biomass industry is involved mainly in producing and using gas produced by the anaerobic digestion of biomass feedstocks, which produces biogas, a mixture of methane, CO2 and other gases.181 The same process occurs in waste landfills, and the resulting landfill gas can be collected and used – providing energy while also reducing emissions from the landfill site. The gases can be used directly for heating or power generation. Alternatively, the methane component can be separated and compressed and used to replace fossil gas by injecting it into gas pipelines or for transport purposes. Biomethane production totalled an estimated 1.4 EJ in 2018, or just over 1% of total global fossil gas demand.182

Biogas can be used at a small scale in developing economies as a sustainable fuel source for cooking, heating and electricity production and to improve energy access. ( See Distributed Renewables chapter.) In developed economies, most biogas is used for power generation or in CHP systems, often stimulated by favourable feed-in tariffs and other support mechanisms.183 The energy content of biogas upgraded to biomethane and used for transport or injection into gas grids, primarily in the United States and Europe, rose to around 170 PJ in 2020.184 Stimulating this development are incentives that favour biomethane production over power production, notably under the US RFS2 and the California LCFS, which offer larger incentives than those for power or heat generation.185

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US biomethane production capacity rose sharply in 2020, with many new projects based on landfill gas, cattle waste, and other wastes and residues. In total, 157 production facilities were in operation during the year (up 78% from 2019), with another 76 projects under construction and 79 projects in the planning phase.186 The total operating production capacity in 2020 was more than 60 PJ.187

Recent projects illustrate that both specialist companies and energy majors are involved in the rapidly growing US biomethane sector.188 In August 2020, Republic Services and Aria Energy (both US) announced a start-up project to process and purify landfill gas from the South Shelby (Tennessee) landfill site; BP will then inject the gas into the interstate natural gas pipeline grid and market it to renewable energy customers.189 In September 2020, Fortistar and Rumpke Waste and Recycling (both US) started building a landfill gas project in Shiloh, Ohio that will extract and capture waste methane and transform it into biomethane for distribution to natural gas vehicle fuelling stations.190

In 2020, Aemetis (US) completed construction of two dairy digesters and a pipeline to supply biomethane to provide fuel for biomethane trucks and buses.191 Verbio (Germany) announced the installation of an anaerobic digester at the former DuPont cellulosic ethanol plant in Nevada, which will now use 100,000 tonnes of corn stover annually to produce biomethane with the energy equivalent of 80 million litres of petrol.192

Biogas and biomethane installations also have grown rapidly in Europe, which in 2020 was home to at least 18,855 biogas plants producing 176 TWh, as well as 726 biomethane plants with a total capacity of 64 PJ (an increase of 66 biomethane plants and 4 PJ compared to 2019).193 Recent projects include Gasum’s (Finland) construction of two new biogas plants in Sweden: a 120 gigawatt-hour (GWh) plant that will produce liquefied biogas from manure and food waste slurry from a local pretreatment plant, and a 70 GWh plant established alongside a local farmer co-operative that will use manure and other agricultural waste products.194 Weltec Biopower (Germany), working with Agripower France, a local agroindustrial firm, commissioned a EUR 11 million (USD 13 million) biomethane plant in Normandy, France that processes around 70,000 tonnes of substrates to produce biogas, which is then refined into biomethane.195 The plant’s raw material mix, comprising inexpensive waste and other byproducts from the agriculture and food industry, is gathered from within a seven-kilometre radius.196

The market continued to expand in China, where the national energy plan prioritises the growth of biogas and biomethane. Construction was under way on two EnviTec Biogas projects: one in Henan province, where the state-run PowerChina Group is the prime contractor, and the other operated by Shanxi Energy & Traffic Investment in Qinxian province.197 Once completed, the Qinxian plant’s four digesters are expected to convert agricultural waste such as corn stover into around 0.5 PJ of biogas per year, which then will be upgraded into biomethane.198

Growing demand from delivery companies for clean fuels is boosting the biomethane market. The UK supermarket company ASDA ordered 202 biomethane-fuelled Volvo FH tractors in 2020 and aims to convert all of its trucks from diesel to biomethane by 2024, after in-house trials showed that biomethane reduced CO2 emissions more than 80%.199 Air Liquide (France) also will provide biomethane at six of its sites.200

Bioenergy with Carbon Capture and Storage or Use

The capture and storage of carbon dioxide emitted when bioenergy is used is a key feature of many low-carbon scenarios.201 Removing from the atmosphere the CO2 that is produced during bioenergy production, which is considered part of the carbon cycle, offers a dual benefit resulting in net negative emissions.202 Although policy makers have shown increasing interest in such options, strong policy drivers that might make such efforts economically attractive are lacking. Thus, very few projects demonstrating these technologies have operated at scale to date.203

Additional pilot-scale carbon capture projects were conducted during 2020. Drax Power (UK) successfully demonstrated carbon capture using a novel technology at its large-scale bio-power plant in the United Kingdom and has begun planning for large-scale application.204 In the United States, Power Tap is producing hydrogen for use as a transport fuel by reforming biomethane and capturing the CO2 that is released.205

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

iiThe traditional use of biomass for heat involves burning woody biomass or charcoal, as well as dung and other agricultural residues, in simple and inefficient devices to provide energy for residential cooking and heating in developing and emerging economies.ii

iiiModern bioenergy is any production and use of bioenergy that is not classified as “traditional use of biomass”. See footnote ii on previous page.iii

ivExcluding the contribution to building heating from district heating; see discussion later in this section.iv

vThis section concentrates on biofuel production, rather than use, because available production data 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 do exist, particularly for biodiesel.v

viHydrotreated vegetable oil is also referred to as hydroprocessed esters and fatty acids (HEFA). It is also called renewable diesel, especially in North America.vi

viiOften referred to as renewable natural gas (RNG), especially in North America. See Glossary.vii

viiiThe meaning of the word “corn” varies by 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.viii

GEOTHERMAL POWER AND HEAT

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SOLAR PHOTOVOLTAICS (PV)

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CONCENTRATING SOLAR THERMAL POWER (CSP)

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