Over the last twenty years, the European Union (EU) has sought to gradually reduce its dependence on fossil based fuels as part of its overall vision for a low carbon future. In 1997, the EU set the tone in a key White Paper [1
] for the encouragement of renewable energy sources (RES). This initiative was followed closely by the Renewable Electricity Directive [2
], the Biofuels Directive [3
] and the Strategic Energy Technology (SET) Plan [4
]. More recently, under the auspices of the Renewable Energy Directive (RED) [5
], the EU set out an ambitious agenda to increase the RES share of gross energy and transport fuel consumption by 2020 to 20% and 10%, respectively. Subsequently, Renewable Energy Action Plans [6
] for each of the Member States (MS) were introduced, with detailed roadmaps on how to achieve said objectives.
From the perspective of EU energy security, these targeted support policies have undeniably ushered in a more renewables intensive energy sector. Between 1990 and 2015, official data [7
] reveals an upsurge in the RES share of gross electricity generation from 12.6% to 29.9%, largely due to major investments in wind and solar. Importantly, the share of biomass in electricity generation (i.e., solid biomass and biogas) has also risen dramatically from 0.4% to 4.7% over the same period. Similarly, in the EU transport fuels sector, conventional- and advanced biofuels accounted for 4.0% and 1.2%, respectively, of the 7.1% RES share achieved in 2016 [8
The discussion on the viability of bioenergy, however, extends beyond energy security concerns to encompass sustainability criteria (i.e., responsible biomass allocation, indirect land use change (iLUC) and environmental ‘leakage’, reliable trade sources, feed and food security). Whilst measures such as the Fuel Quality Directive (FQD) [9
] seek to roadmap credible criteria for the adoption of sustainable biofuel usage, it is still claimed that EU imports of Asian (principally Indonesia and Malaysia) palm oil for conventional biodiesel result in significant deforestation [10
]. In addition, the promotion of biomass to meet internal EU energy requirements appears inconsistent with the central tenet of the bioeconomy strategy [11
] which prioritizes high value added material uses before eventual recycling and conversion to (lower value added) energy applications—the so-called ‘cascading’ principle [12
]. In contrast, proponents of conventional biofuels talk up the benefits of co-product protein-based animal feeds to livestock producers, which not only reduce EU dependence on essential sources of imported soybean meal [14
] but also alleviate iLUC impacts [15
Looking ahead, the renewable energy agreement to 2030, foresees a greater role for advanced biofuel technologies. More precisely, targets for RES shares in gross energy consumption and transport are increased to 32% and 14%, respectively [16
]. The expectation is that advanced biofuels, which rely on residues and non-food lignocellulosic biomass inputs, will play a key role in responding to sustainability concerns. Indeed, under auspices of the EU’s ‘European Advanced Biofuels Flightpath’ initiative, the promotion of advanced biofuel technologies even extends to the aviation sector. Conventional biofuels, in contrast, will face stricter sustainability requirements, which will favor bioethanol (vis-à-vis biodiesel) production.
The enumeration of these perceived benefits, risks and trade-offs requires a multisector analysis which characterizes the sources of, and constraints on, available biomass, the pervasiveness of rival biomass uses and the resource competition that arises from the links with the broader economy. Moreover, the model should also consider access to third country markets to meet internal biomass requirements. For these reasons, a multi-region computable general equilibrium (CGE) framework is an attractive option.
There are a number of insightful studies assessing EU biofuel policy [17
] although the resulting impacts on agricultural prices, production and land use, vary considerably, largely due to differences in (inter alia) the time frames of each study and the scenario designs. Typically, modelling applications which recognize extensive margin cropland conversion (i.e., from pastures or forests) and/or enhanced modelling assumptions on land transfer and availability [22
] report greatly reduced land market pressures resulting from biofuels policies. Moreover, modelling improvements in the representation of land yields, explicit accounting for second generation biofuels [25
] and agricultural residue potentials [25
] have also been found to reduce the reported impacts on land pressures and associated food prices and production effects arising from biofuels policies. In other studies [19
], conventional biofuel co-products are also explicitly modelled, the absence of which has been found to overstate cropland conversion estimates arising from biofuel policies [23
To the best of our knowledge, only one EU bioenergy foresight modelling exercise for The Netherlands [27
] expands the scope of bioenergy, encompassing not only bioelectricity and advanced biofuel technologies, but also recognizing the competition for sources of non-food lignocellulose biomass with latent biochemical and thermochemical material technologies. A further refinement of this research is the explicit incorporation of expected technological advancements in nascent bio-based sectors of the CGE model, which are taken from specialized bottoms-up partial equilibrium models of the biobased energy (IMAGE-TIMER [28
]) and chemicals sectors (MARKAL-UU-NL [28
In taking an EU-wide bioenergy focus, this research builds on [27
]. Our study further deepens the sector coverage to include biokerosene for aviation, whilst the electricity generation sectors in the model now also includes non-biologically renewable, nuclear and fossil alternatives. To improve the rigor of the study, official EU energy projections are incorporated into our contemporary baseline to 2030. In the context of the policy debate alluded to in the discussion above, the aim of the research is to examine key aspects on the current policy debate surrounding bioenergy, through the careful design and implementation of medium-term scenarios. Thus, the objective is to enumerate the trade-offs and market tensions between food, feed, material, energy, land and other biomass markets that arise from an advanced biofuels plan and two exploratory scenarios consisting of more sustainable conventional biofuels within the current RED. A final stylized simulation examines the elimination of all EU bioenergy support, with a particular focus on the implications for EU energy self-sufficiency. A key underlying hypothesis is whether the current study concurs with more recent literature, which suggests that the impact of bioenergy policies on relevant agricultural, land, feed and biomass markets is potentially overstated.
The rest of this paper is structured as follows: Section 2
describes the data, modelling framework and scenario design. Section 3
reports the results. Section 4
provides further discussion and concludes.
A full discussion of the baseline results is given in [34
]. In this section, results are presented for the scenarios in comparison with the baseline for the period 2020–2030. The value estimates are in 2011 constant prices. From a macroeconomic perspective, the AB proposal, plus the exploratory POE and ETH scenarios lead to small relative real EU GDP falls (approximately −0.01%). There is an estimated baseline EU biofuels budgetary cost of €9971 million in 2030 associated with the current RED (Table 5
). The encouragement of advanced generation biofuels under the AB plan, requires a significant additional EU investment of €8232 million of public support compared with the baseline (Table 5
), although this figure is very much dependent on the assumptions of the costs for the different bioenergy pathways and fossil fuel prices adopted in this study. Similarly, POE and ETH scenarios result in marginal total biofuel budgetary cost increases of €112 million and €986 million, respectively. In contrast the efficiency gains arising from the removal of all biofuels support (NoS, i.e., €10 billion budget saving) increases EU real growth, although in proportional terms, this effect is small (i.e., less than 0.05%).
3.1. Output and Market Prices
The production volume impacts in each of the scenarios compared with the baseline are presented in Table 6
Under the advanced biofuel proposals, conventional biofuel production falls 46.2%, with a concomitant advanced biofuel output expansion of 136.7%. This reorientation is reflected clearly in the feedstock markets. EU output volume falls in oilseeds (−3.9%) and sugar beet (−1.9%) and animal feed co-products (−8.7%). This is accompanied by strong output volume rises (from smaller bases) in non-food lignocellulosic biomass such as pellets, residues and energy crops (63.5%, 23.3% and 6.1%, respectively), although alternative material uses of said biomass are crowded out. For example, relative output reductions are observed for polylactic polymers (−0.3% or −€0.35 million) and polyethylene polymers (−1.0% or −€0.09 million) and thermochemical biomass conversion technologies (−3.9% or −€0.42 million), as well as biokerosene (−0.5% or −€4.7 million) and bioelectricity (−7.1% or −€1.2 billion). The output gap in electricity generation is met by non-biological renewables and fossil fuels in equal measure (approximately 1%). Advanced thermal and biochemical fuel technologies volumes rise by over 130% (equivalent to a relative rise of 2684 million liters—Table 5
Examining market prices, the effects are moderate, largely due to access to third-country biomass trade (see next section). Thus, price rises are observed for EU advanced biofuels (2.5%) and price falls for conventional biofuels (−2.1%). Similarly, the price variations in upstream feedstocks for both advanced and conventional biofuels are muted (i.e., no greater than 5%). Resulting cost push effects are witnessed in the bio-kerosene and bioelectricity markets (3.6% and 2.0%, respectively), whilst electricity price impacts are insignificant.
In both the POE and ETH scenarios, food price and macroeconomic impacts are negligible, whilst the market impacts in the POE scenario are largely restricted to the first-generation biofuel production chain. In the POE scenario, EU biodiesel output volume falls 3.4% compared with the baseline (−146 million liters (Table 5
)), with a concomitant rise in bioethanol output volume of 5.5% (35 million liters (Table 5
)). In the baseline, it is estimated that bioethanol and biodiesel production reaches 635 million liters and 4.3 billion liters, respectively, by 2030. Similarly, baseline advanced generation biofuels production under an assumed 1.5% mandate is approximately 2 billion liters in 2030. This compares with 2017 estimates of conventional biofuel production of approximately 2.6 billion liters [8
]. This same report also states that by 2021, advanced biofuels could reach 200 million liters, although for the reforms to the RED, “the consumption of advanced biofuels must increase significantly from 2020” [8
], (p. 3). Despite the fall in biodiesel output, the loss of imported crude vegetable oil from Asia is substituted with EU produced oilseeds and crude vegetable oil feedstocks, which increase 1.6% and 4.6%, respectively. The expansion in bioethanol production has only moderate effects on upstream sugar beet production (0.3%), suggesting greater import dependence (see next section). With the rise in EU crude vegetable oil and bioethanol production, EU oilcake and distillers dried grains and soluble (DDGS) co-products output rises 4.4% and 5.4%, respectively. With increased internal demand for first generation feedstocks of oilseeds, crude vegetable oil and sugar beet, market prices rises are moderate (0.7%, 1.1% and 0.2%, respectively), which slightly pushes up costs in biodiesel (0.6%) and bioethanol (2.0%).
In the ETH scenario, there is four-fold increase in EU bioethanol production (420%, or 2666 million liters (Table 5
)) with a concurrent collapse in (the larger) biodiesel sector (−4319 million liters (Table 5
)), leading to a 29.4% contraction in EU conventional biofuel production. EU oilseed and crude vegetable oil production declines 7.4% and 17.7%, respectively. Similarly, increased bioethanol demand for biomass feedstock has a marked effect on EU sugar beet production (24%) and even cereals production (1.5%). An associated resource-conflict that arises is that less bioethanol is reserved for biochemical applications (e.g., polyethylene polymer output volume declines −6.6%), whilst increased processed sugar uptake in bioethanol is consequently diverted away from polylactic polymer production (−1.5%), part of which is met by increased supply of lignocellulosic sugar (8.0%—from a small base). In all the experiments, there are strong impacts on animal feed co-products. As a bioethanol by-product, rising DDGS production (402%) does not compensate crude vegetable oil co-product oilcake falls (−16.7%), generating an aggregate animal-feed by product production fall of −6.3%.
As expected, EU bioethanol prices rise 15.1%, reflecting the cost increases in sugar beet (8.1%) and cereals (0.6%) feedstocks, whilst the ethanol using polyethylene sector exhibits a price rise of 5.6%. Biodiesel, crude vegetable oil and oilseeds market prices fall −4.1%, −5.0% and −3.1%, respectively. DDGS market prices fall 53%, although with 9% rises in oilcake prices, composite co-product animal feed prices rise 6.9%.
In the NoS scenario, there is an output value loss of €11.4 billion in combined conventional and advanced biofuels and close to €945 million in the bio-kerosene sector (Table 6
). As a result, output contractions are observed in conventional biofuels feedstocks (oilseeds, sugar), advanced biofuel feedstocks (e.g., energy crops, residues, pellets), and biofuel by-product animal feeds. Elsewhere, there is evidence of a redistribution of biomass into nascent EU bio-chemical (polyethylene, polylactic acid) and thermochemical lignocellulose biomass conversion technologies, although in value terms, the relative increase is limited (€7 million and less than €1 million, respectively).
Bioenergy feedstock market prices fall for EU oilseeds (−3.2%) and sugar beet (−2.1%), although cereals price changes are negligible. Elsewhere, non-food lignocellulosic biomass prices fall between −2.5% (pellets) to −9.0% (energy crops). Falling feedstock prices result in market price falls in contracting biofuels sectors, whilst the increased availability of rechanneled biomass reduces per unit costs in advanced biochemical sectors, most notable in the case of the polyethylene sector (−8.8%). In contrast, reduced availability of animal feed co-products increases market prices for oilcake (9.3%) and DDGS (83.7%). The removal of all biofuel mandates registers non-trivial impacts in the energy market. With the fall in EU bioelectricity output volume (−26.8%), electricity generation from wind/solar renewables (in the EC baseline [38
], it is expected that hydroelectricity will not expand beyond current physical capacity limits (see also [38
], p. 974)), whilst for political reasons, nuclear power capacity does not expand (see Supplementary Materials
), coal-fired and gas-fired power stations rises 4.3%, 3.6% and 2.7%, respectively, without any significant market price rises (i.e., below 1%).
3.2. Trade Effects
shows the value changes in trade in millions of euros (2011 constant prices) compared with the baseline. The extra EU trade balance is calculated as exports minus imports. A positive change in this trade balance indicates increases in exports and/or decreases in imports. Under AB, conventional biofuel extra-EU imports fall between 40–50%, with an associated trade balance improvement of €484 million and a total trade balance improvement in conventional biofuel feedstocks of cereals, oilseeds, sugar beet and crude vegetable oil totaling €1325 million. As an essential element in meeting to EU’s increased advanced biofuels mandate, extra-EU imports of pellets and processed advanced biofuels results in trade balance deteriorations of −€250 million and −€1233 million, respectively, whilst the crowding out of EU produced biokerosene production leads to a −€554 million to maintain the kerosene mandate. Fossil fuel trade balances are largely unaffected. The loss of EU produced oilcake feed is compensated by a 6% increase in extra-EU imports leading to a €220 million trade balance deterioration.
In the POE scenario, the elimination of extra-EU palm oil imports from Asia results in a 22.0% fall in total extra-EU imports of crude vegetable oil and an associated trade balance improvement of €732 million. To bridge the shortfall, there are relative rises in extra-EU imports of oilseeds (4.7%), sugar beet (0.9%), bioethanol (5.4%) and biodiesel (1.1%). Interestingly, the total associated trade balance deterioration from these import rises (−€459 million) is less than the EU trade balance saving noted above. Intra-EU trade trends for bioethanol and biodiesel follow the output trends noted in Section 3.1
above, whilst reduced EU biodiesel capacity and greater EU import dependence on bioethanol stifle extra-EU exports of both. The output volume rise in EU produced animal feed co-products leads to a trade balance improvement of €113 million.
In the ETH scenario, intra-EU trade and extra-EU imports of biodiesel disappear, with an associated EU trade balance improvement of €762 million (Table 7
), although this is accompanied by a rise in extra-EU imports of bioethanol of 810.4% and an EU trade balance deterioration of €1656 million. Extra-EU imports fall (EU trade balances improve) for crude vegetable oil 29.9% (€1000 million) and oilseeds 16.4% (€1422 million) respectively; whilst internal EU surpluses are diverted onto world markets. In contrast, notable rises in extra-EU imports of bioethanol feedstocks of raw sugar (50.8%) and cereals (4.4%) lead to trade balance deteriorations of €505 million and €196 million, respectively. With the production drop in EU oilcake animal feed (from biodiesel), extra-EU import dependence on this protein based animal feed rises 11.3%, with an associated €416 million trade balance deterioration.
In the NoS scenario, intra-EU trade and extra-EU imports of conventional biofuels, advanced biofuels and biokerosene collapses, with associated external balance improvements of €1033 million, €1290 million and €1102 million, respectively. In conventional biofuel feedstock of oilseeds, crude vegetable oil and sugar beet, as well as pellets, the same aforementioned trends arise, with resulting trade balance improvements of €1388 million, €1006 million, €283 million and €353 million, respectively. Unlike the AB scenario, EU cereals trade remains unaffected due to the real income driven rises in internal EU cereals demand. In the case of protein-based oilcake, there is an additional reliance on extra-EU imports (13.7%) to meet internal EU shortages resulting in a trade balance deterioration of −€503 million.
Reduced bioenergy and associated biomass usage is accompanied by extra-EU import rises of 2.8%, 1.5%, 0.7% and 0.4% in coal, crude oil, gas and refined petroleum extra-EU imports, respectively. In value terms, this equates to trade balance deteriorations of −€419 million, −€5133 million, −€564 million and −€459 million, respectively. Netting out these energy related trade balance shifts, the EU requires an additional €253 million in extra-EU imports from the abolition of bioenergy support instruments.
3.3. Land Use
The impacts on land usage (in km2
) are shown in Figure 2
. As a general observation, neither the AB proposal, nor the three exploratory scenarios have a major impact on aggregate land usage in the EU. On the other hand, there is evidence that, at the margin, biofuel policies have a clear impact on EU and global land usage for oilseeds (for biodiesel) and raw sugar (for bioethanol) cropping areas.
The AB results reveal the land use savings resulting from these proposals. Increased advanced fuel volumes require an estimated 4.2% increase in EU land area devoted to non-food lignocellulose energy crops. In absolute terms, however, the change in land area of energy crops is small (40 km2
) (not shown in Figure 2
), as most of the extra biomass for advanced fuels is coming from residues (see Table 6
for the relative sizes of different biomass sources). Concomitantly, land pressures are alleviated as EU land usage in oilseeds and sugar beet activities falls −3371 km2
(−2.7%) and −206 km2
(−1.4%), respectively. Once again, land is principally reassigned to cereals usage (2085 km2
or 0.3%), or even extensive livestock (1220 km2
or 0.1%), although the total EU land area witnesses a negligible fall of −459 km2
. Reduced EU dependency on third-country sources results in a global reduction in oilseeds and sugar land areas sown of −18,128 km2
(−0.7%) and −357 km2
On eliminating extra-EU Asian imports of palm oil (POE), the need for domestic substitutes (and imports) has clear implications for land usage in the EU. Thus, oilseeds land usage rises 1442 km2 (1.1%) to fill the gap from lost Asian palm oil imports. The relatively minor impact of increased bioethanol production on EU sugar beet land area (31 km2 or 0.2%) is indicative of the EU’s preferred dependence on third-country sources of raw feedstocks and processed bioethanol. With a strong rise in oilseeds area, there is a switch away from cereals land (despite increased uptake from bioethanol) and from livestock land to cropland. As a result of the import ban, in the non-EU regions, the reduction in oilseeds land area in the ROW region (includes Asia) is −1522 km2 or −0.2% (not shown). On the other hand, higher extra-EU imports of oilseeds from substitute third-countries increases the global area sown by 4816 km2 (0.2%).
In the ETH scenario, the EU land area devoted to oilseeds falls −7074 km2 (−5.6%). On the other hand, in cereals and sugar beet cropping areas there is an additional estimated EU land uptake of 7268 km2 (1.1%) and 2034 km2 (13.5%), respectively. As indicated in the POE scenario, there is an output gap in EU bioethanol production, which is bridged by third-country imports. Consequently, an additional 874 km2 (0.5%) of sugarcane land is sown in South and Central America (not shown), with a corresponding global increase of 3000 km2 (0.8%). Similarly, there is a relative reduction in third country oilseed land area sown, such that global oilseeds land area contracts by −38,714 km2 (−1.4%).
In the NoS scenario, the EU land areas sown for oilseeds and sugar beet decline by −6050 km2 (−4.8%) and −383 km2 (−2.5%) respectively (in the EU, these land use falls are slightly less than the ETH scenario because of demand driven rises for agrifood products due to the slight rise in EU macroeconomic growth in the NoS scenario). Despite the collapse of bioethanol, a portion of this land reduction is re-diverted into cereals (2479 km2 or 0.4%), whilst the livestock sector also witnesses greater uptake of land (2699 km2 or 0.3%) at the expense of cropping activities. Lignocellulose energy cropland area contracts by −104 km2 (−10.9%), although overall, total EU land usage is reduced by a (moderate) 908 km2 (−0.1%). As expected, oilseed land areas in non-EU regions falls by a similar magnitude to the ETH scenario, whilst sugarcane land area in South and Central America falls by 318 km2 (−0.2%). Globally, oilseed, sugar and lignocellulose energy cropland contract −1.3%, −0.2% and −3.7%, respectively; whilst land reallocation effects lead to a very slight rise (0.2%) in the cereals land area.
In June 2018, the European Union (EU) finalized an agreement to further decarbonize its energy sector. Under the auspices of the advanced biofuels (AB) plan, biomass will continue to contribute as a part solution, although it must balance energy security concerns with sustainability criteria. From the broad perspective of EU food security, all bioenergy scenarios are consistent with previous studies in that they exert only limited impacts on EU agricultural land usage [42
] and EU agrifood production [43
]. Indeed, this finding supports the observation made in the introduction regarding the impacts of explicitly accounting for second generation biofuels, biofuel by-products, extensive land transfer, land yields and (non-food) residue potentials in economic modelling studies.
Examining the AB proposal, the study supports the sustainability claim that increased usage of non-food cellulosic feedstocks in advanced biofuels necessitates only moderate increases in land uptake, alleviates land use pressures both in the EU and non-EU regions through reductions in cultivated oilseeds and sugar beet areas and improves the EU’s biomass and conventional biofuels trade balance. The AB scenario does require significant capacity increases in high-energy crops, pellets and residues, although the evidence here corroborates the analysis of [42
]. More precisely, if EU supply chains for biomass develop satisfactorily (i.e., respect biodiversity, conservation and erosion), coupled with available EU access to third-country imports of non-food cellulosic feedstocks, the resulting price rise for advanced biofuels is not expected to generate prohibitive bottlenecks in reaching EU mandates. This result therefore challenges fears of overoptimistic expectations of technological enhancements in advanced biofuels [47
], although further research into ‘bottoms-up’ engineering estimates of technological change would help ensure a more solid basis for setting out plausible ‘real’, rather than (double-counted) ‘virtual’, mandates.
The AB does, however, face potential challenges. Firstly, subject to the technology change assumptions of this study, the implementation of a more sustainable energy plan is found to carry a significant taxpayer cost, although this is potentially overstated since the fossil fuel price assumptions by 2030 are toward the lower end. Moreover, there are stakeholder concerns that a strategy of premature substitution of conventional biofuels with advanced biofuel alternatives could irrevocably harm investor confidence in the entire biofuels sector [15
]. Another issue relating to AB is the broader notion of public policy incoherence. Contrary to the EU’s current strategy toward innovative high-value biomass conversion technologies [11
], a resource trade-off is observed as nascent biochemical and thermochemical material conversion technologies contract, although this effect is not unduly strong. Furthermore, a bio-energy trade-off is observed, as increases in advanced biofuels volumes compromise bioelectricity production through the rechanneling of pellets, although this finding does not account for the compensating role of organic and municipal waste in (bio-) electricity production.
In the two exploratory conventional biofuels scenarios of conventional ethanol only (ETH) and palm oil elimination (POE), as with AB, there is little evidence to support biomass bottlenecks (i.e., significant price rises) in the EU. Again, this result is dependent upon the agricultural productivity assumptions and continued smooth EU access to third country sources of raw and processed biomass. In first-generation feedstock crop activities (i.e., oilseeds, crude vegetable oil and sugar beet sectors), whilst market impacts are more visible, particularly in the ETH scenario, the promotion of more sustainable bioethanol production is not found to incur any stress on cereals markets. Indeed, in the ETH scenario, there is even evidence of a redistribution of oilseeds land into cereals activities. Curiously, the hypothesized sustainability improvement of the POE scenario is in doubt since the net oilseed land impact at the global level is positive, which suggests that biodiesel feedstock sourced from Asia has, on average, a lower land requirement than the rest of the world.
In the animal feed market, the loss of EU sourced protein-rich oilcake from the contraction of the biodiesel sector is clearly observable in the AB proposal and the ETH and NoS scenarios, although this does not carry significant marginal cost-driven implications for EU livestock producers in any of these scenarios. Indeed, whilst there are increases in EU imports for oilcake feed of between 6% (AB) to 14% (NoS), the trade data reveals that it does not impact significantly on the EU’s already high dependence on protein feed imports, a sentiment echoed by [48
]. Furthermore, the contraction in non-EU region oilseed land area in the three scenarios (i.e., reduced ‘leakage’), shows that reduced extra-EU import demand for conventional biofuel feedstocks outweighs shortfalls on the EU’s internal market for protein-based animal feeds. This result is of interest in the currently ongoing debate on a European strategy for the promotion of protein crops to reduce the dependency from protein imports.
Finally, under the extreme scenario of eliminating EU bioenergy support (NoS), both nascent and conventional bioenergy sectors remain heavily dependent on EU policy support, a result supported by other studies [27
]. Thus, this market mechanism is an important ingredient for sustaining incomes, employment and development in rural areas, as bioenergy (feedstock) production is especially located in these areas. On the other hand, a macroeconomic efficiency gain is reported under NoS, although this may provide little solace for rural livelihoods, particularly the associated frictional unemployment impacts arising from structural changes between ‘market equilibria’.
EU energy security is also compromised under the NoS scenario, although the energy price impact is very limited contingent upon assumptions of unfettered third-country trade access and available compensating capacity in the EU’s wind and solar sectors. A caveat of this conclusion, however, is that the study does not contemplate the contribution of organic and municipal biomass waste streams in (inter alia) biogas, bio-heating and electricity, which are component parts of the NREAPs. In terms of sustainability, NoS undoubtedly bestows beneficial environmental effects, as agricultural land pressures, particularly in oilseeds, are relieved in all regions, although in proportional terms, the reductions are relatively small (<5%).
As with any modelling endeavor, there are caveats, chief among them being the deterministic (i.e., non-stochastic) behavior of agents, the assumption of equilibrium market clearing and optimal allocation of resources in initial situation and given available technologies, the stylized representation of investment, and the conditionality imposed on model results by the choice of model closure. A further important omission is the lack of treatment of forestry land and associated carbon stocks, which has pertinence when examining issues of iLUC. Finally, an improved characterization of available natural fossil based resources, which endogenously reflect expected rates of extraction and depletion conditions under changing market conditions (i.e., price changes), would also improve the veracity of the model results. Despite these caveats, it is found that the features of the MAGNET model and extensions to the new and old bio-economy sectors, makes it extremely useful to reduce uncertainties and to get insights into pull directions of production, trade and land use changes resulting from EU bioenergy policies.
Employing a state-of-the-art bio-based variant of the MAGNET computable general equilibrium model, and comparing with a carefully designed medium-term status quo baseline, this study examines four exploratory EU bioenergy policy scenarios which reflect aspects of the currently policy debate. The aim is to re-assess the energy market implications, as well as identify and enumerate potential resource bottlenecks, with a particular focus on economic efficiency, land use, competing biomass availability and food security. A general conclusion is that none of the scenarios considered presents significant challenges to EU food-security or agricultural land usage—a result which is consistent with recent literature.
Subject to the assumptions of the study, the advanced biofuels (AB) scenario is arguably an attractive (part-) solution from a sustainability criterion, although this policy initiative carries a notable taxpayer cost, whilst it also diverts biomass away from higher-value bio-chemical and thermochemical material conversion technologies.
Restricting EU conventional biofuels to bioethanol only (ETH), there are notable impacts in associated EU bioethanol and biodiesel feedstock markets, particularly in the EU sugar markets. On the other hand, the ETH scenario does not introduce market stresses in cereal (feedstock) markets, in part due to the reallocation of land dedicated to oilseeds, to cereals activities. With the loss of access to EU palm oil imports from Asia (POE), the market impacts on EU sources of crude vegetable oil and oilseeds are mild, whilst (perhaps surprisingly) global usage of land dedicated to oilseeds rises.
Finally, the removal of all forms of bioenergy support (NoS), whilst bestowing a considerable budgetary saving to the EU taxpayer with resulting market efficiency gains, inevitably causes some disruption to the EU’s energy security, mainly in the electricity generation market. This market impact, however, is compensated by capacity increases in non-biological renewable sectors and small increases of EU imports of fossil alternatives.