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1. Introduction

1.1 The Need for new Energy Sources

Climate change, brought about by increasing atmospheric concentrations of carbon dioxide and other heat-trapping greenhouse gases, has been described by the UK's Chief Scientist, Sir David King, as "the most severe problem that we are facing today - more serious even than the threat of terrorism" (King 2004). Present carbon dioxide concentrations stand in excess of 370 parts per million (ppm), whereas pre-industrial concentrations were in the region of 280 ppm ( IPCC 2001). The burning of fossil fuels is the primary cause of increased carbon dioxide concentrations, thought to be responsible on a global scale for up to 80% of annual emissions. International recognition of the global impact of increasing CO₂ emissions has come in the form of the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which sets a target for reducing emissions by 5.2% of the 1990 emissions rate by the 2008-2012 period and came into effect in February 2005. Alternative, carbon neutral energy technologies will be key to reducing greenhouse gas emissions. Among these, the so-called renewable energy technologies are important and include wind, marine energy, hydropower, solar energy, geothermal energy and energy from waste, as well as biomass energy ( FREDS 2005a).

Allied to the need to cut emissions of greenhouse gases is the need to ensure a sustainable energy supply in the future, which is not possible by relying exclusively on finite fossil fuel resources, especially in the face of continuously increasing energy demand. Oil production is expected to peak at some time in the near future, although there is considerable debate as to exactly when this will occur (Kopelaar 2005). In Scotland, North Sea oil production peaked in 1999 and is expected to decline at a rate of 7% per year. As for natural gas, the North Sea's production is currently declining at a rate of approximately 2% annually ( UKOAA 2005). Renewable energy resources will help form part of a portfolio of technologies that will safe-guard future energy security.

Most experts agree that because of the different characteristics of renewable energy resources, a mixture of different technologies will be necessary to best meet Scotland's energy demand (Scottish Affairs Committee 2005). Renewables (including hydro) currently provide only about 9% of Scotland's electricity (Scottish Executive 2005), so the short to medium term future energy mix will consist of both renewable and conventional sources. Biomass will be one of the energy options contributing to this diverse portfolio and understanding the relative benefits and trade-offs associated with its utilisation is essential for strategic exploitation of its potential.

1.2 Policy Framework

1.2.1 European Union

Biomass energy is currently being promoted through a range of national and international policies and incentives. On a European Scale, the EU recently launched its Biomass Action Plan, where targets were set to effectively double the area dedicated to energy crops by 2010 ( EC 2005). The reform of the Common Agricultural Policy has decoupled payments of subsidies to individual crops in favour of the single farm payment scheme which allows farmers greater flexibility in what crops they choose to grow, with energy crops included among these. This may facilitate realization of the Biomass Action Plan goals. The reformed CAP includes a special payment for energy crops and the possibility of growing energy crops on set-aside land ( EC 2003a). Further support from the EU comes from the directives on renewables, which set a target of 22.1% renewable electricity by 2010 and biofuels, where the EU set an indicative target of a 5.75% biofuel share of the transport fuel market by 2010 ( EC 2001, 2003b). The establishment of the European Union Emissions Trading Scheme ( ETS) has also created a market mechanism by which carbon dioxide emissions can be traded, providing a strong economic instrument to support the production of renewable energy, including that from biomass.

1.2.2 United Kingdom

On a UK level, several initiatives are in place to promote the development of biomass energy systems. From a climate change perspective, the UK government has set a greenhouse gas emission target of 12.5% reduction of 1990 greenhouse gas emissions by 2008-2012, contributing to an overall 8% reduction target for the EU under the burden sharing agreement (Smith et al. 2000). The main incentive, however, has been the Renewables Obligation Order in the UK and north of the border, the Renewable Obligations Order for Scotland (2002). These orders commit energy utilities to provide a specific and increasing proportion of electricity from renewable sources, with penalties for non-compliance. Further support for biomass energy has been generated by the establishment of several grant schemes including the Defra Energy Crops Scheme and Bioenergy Infrastructure Scheme (Defra 2003, 2004), and the DTI-sponsored Bioenergy Capital Grants Scheme, for which a new round of applications has just been announced to support biomass heat and CHP schemes ( UK Government 2006). As far as transport biofuels are concerned, the UK government recently announced plans to introduce a Renewable Transport Fuel Obligation which will require major oil companies and importers to ensure 5% of their fuel sales come from renewable sources by 2010 (Department for Transport 2005.)

The publication of the Biomass Task Force Report (2005) led by Sir Ben Gill resulted in a series of recommendations which have been instrumental in the development of the biomass sector in England and Wales in the last year. These recommendations included the introduction of a large capital grants scheme for biomass and CHP boilers, removal of the bureaucratic arrangements in co-firing and the requirement that all new government building and refurbishment consider fully the use of biomass heating. The UK government published a response to the Task Force report in April 2006, in which it outlined the actions taken and to be taken to meet the recommendations set out in the report ( UK Government 2006). Although the Biomass Task Force was aimed at England and Wales, the government response included an Annex outlining the action being taken to develop and support the biomass industry in Scotland.

1.2.3 Scotland

In Scotland, the Scottish Executive has set the target of generating 18% of its electricity from renewable sources by 2010, and aims for 40% by 2020 (Finnie 2003). Biomass energy spans several policy areas. These include, among others, the Scottish Sustainable Development Strategy (2005b) and the Scottish Climate Change Programme, published in 2006, in which the Scottish Executive made the commitment of reducing its carbon emissions by 2.7 million tonnes by 2010 (Scottish Executive 2006). Additionally, Scotland's Green Growth strategy (Scottish Executive 2005c) highlighted the new business opportunities arising from the development of the renewable energy sector, including biomass. The revised Scottish Forestry Strategy, soon to be issued for consultation, and the recently published The Forward Strategy for Scottish Agriculture: Next Steps (2006) define the relative contributions the forestry and agriculture sector can make to mitigating climate change, and emphasize the opportunities that will arise from the development of the biomass energy sector in Scotland.

The Scottish Executive has, through its Forum for Renewable Energy Development in Scotland ( FREDS), established the Biomass Energy Group ( BEG) to advance the development of biomass energy technologies in Scotland ( FREDS 2005b). The FREDSBEG group made a series of recommendations in the 2005 report Promoting and Accelerating the Market Penetration of Biomass in Scotland, many of which have already been implemented. This included the establishment of a Bioenergy Network, which has now been set up and is being coordinated by Scottish Renewables Forum (Scottish Renewables Forum 2005).

Although there is still a low market penetration of biomass energy in Scotland, much is being done on the policy front to guide the sector forward. In its efforts to develop the biomass industry in Scotland, the Scottish Executive is currently seeking to produce a Biomass Action Plan by the end of 2006, develop a Renewable Heat Strategy by the end of 2007 and develop a support scheme for biomass heat and CHP projects ( UK Government 2006).

1.3 Biomass: Advantages and Drawbacks

Biomass energy is assumed to be carbon neutral in that the combustion of biomass fuels liberates the same amount of carbon dioxide that plants absorb during photosynthesis. In reality, however, there will be carbon emissions from fossil fuel input during the life cycle of the fuels and there may be additional emissions of other greenhouse gases such as nitrous oxide (N ₂O) from, for example, fertiliser use, so that biomass energy is not completely carbon neutral. The carbon costs of individual technologies vary, therefore, according to their specific production, processing and transport requirements (see Chapter 4).

Compared to other renewable energy sources, biomass has several potential advantages:

• It is controllable and its use can be adjusted to meet demand;
• It is a potential source of heat as well as electricity and can thus be used as an option to ease the strain on the National Grid, especially in more inaccessible areas;
• Biomass can be used to produce energy continuously and therefore does not have the same problems of intermittency associated with other renewables such as wind;
• Biomass technology is flexible and can be applied at a variety of different scales;
• Biomass involves much more complex supply chains than other renewable energy systems, possessing the potential to create many jobs and hence stimulating rural development.
• Biomass provides an opportunity for energy costs to be recycled within the regional economy, rather than distributed over an extended fossil-fuel supply chain.
• In many cases, biomass can provide an economic alternative to fossil fuels, particularly under current high oil prices.

There are, however, some potential disadvantages associated with the utilisation of biomass in relation to other renewable energy sources:

• Biomass fuels have relatively low energy density compared to fossil fuels such as coal, which increases the energy costs for transport of raw material;
• Many biofuel resources are dispersed and the logistics of their utilisation can be difficult;
• Like fossil fuel sources, biomass sources have costs associated with them such as transportation and processing costs.
• Biomass installations tend to be more capital-intensive and require more space than their fossil fuel equivalents.
• Biomass is less convenient than some fossil fuel alternatives, such as gas.

As fuels that require burning, biomass energy feedstocks may also have an impact on regional air quality, with obvious implications for smokeless zone legislation in urban areas. In addition, there may also be emissions arising from the application of fertilisers, such as ammonia which may have further acidification impacts, or from the plants themselves, such as VOCs from forestry sources (Chapter 5). Increased production of biomass feedstocks will in many cases involve the need for land to be allocated specifically to their production. Not only will this mean increased competition with other land uses, but it may also mean increased environmental impacts in response to land use change. The tillage requirements of transport biofuel crops, for example, could lead to increased risk of soil erosion. The net environmental impacts, however, will depend on the land use system which is being replaced.

Some of the drawbacks associated with biomass energy can be overcome, however, through development of the biomass fuel supply chain and strategic utilisation of resources. In a recent report, the Royal Commission on Environmental Pollution (2004) identified the primary reasons for the slow uptake of biomass in the UK:

• Excessive focus by the government on high-technology electricity generation;
• No co-ordination among grant schemes;
• Lack of facility for sharing information.

The main difficulties associated with the utilisation of biomass for energy in the UK have therefore been policy-related rather than fuel-related. The FREDS report (2005) identified a series of actions that would help to promote biomass market penetration in Scotland. These include:

• Review of the level of support needed to encourage energy crop growers;
• Increased support of the innovation and development of the biomass fuel supply chain in Scotland.
• Improved government commitment to public sector support, especially for infrastructure and CHP plants.
• Improved regulatory framework where planning guidance to support biomass development would be revised and where planning authorities issue clear and unambiguous guidance.

1.4 Report Aim and Structure

1.4.1 Aims

The last few years have seen an upsurge in the number of reports addressing different facets of biomass utilisation for energy. The 2004 Royal Commission on Environmental Pollution (2004) report presented a general overview of different biomass sources, conversion systems, environmental impacts and costs, while the Carbon Trust published an analysis of the economics of different biomass options for the UK (Carbon Trust 2005). A report by Bauen et al. (2004) proposed a strategy for the generation of electricity from biomass sources up to 2020, while the potential of biomass for renewable heat was recently reviewed in a report by AEA Technology (2005). More specific reports have assessed the greenhouse gas impacts of different bioenergy systems (Elsayed et al. 2003) and the environmental impacts of biofuel crop systems (Turley et al. 2003). Additionally, reports published over the last two year have investigated the potential for the development of the wood fuel market for heat in Scotland ( SDC 2005, Rippengal 2005), as well as the potential for production of biodiesel from rapeseed (Booth et al. 2005) and an analysis of the biomass options of most relevance to Scotland (Towers et al. 2004). Besides these, there have been several publications in the scientific literature addressing several environmental aspects of biomass energy, including life cycle assessments studies of the global warming and air pollution impacts of biomass systems. The aim of this document is to review and summarise the available information on utilisation of biomass for energy and to assess the findings of these studies in light of their applicability to Scotland.

This report is the product of a scoping study on different facets of the production and consumption of biomass for energy in Scotland. In particular, the focus is on the energy generation potential, greenhouse gas balance, environmental impact, with special reference to air quality, and costs associated with different biomass energy options for Scotland. The report has the following specific aims:

• To review studies on the aspects of biomass energy mentioned above and assess them in terms of their relevance to Scotland.
• To highlight information deficiencies and indicate the level of uncertainty associated with the current data.
• To make recommendations on what further studies are needed and what information they are likely to yield.
• As far as is possible based on the available information, to make recommendations on the best options for a sustainable bioenergy industry in Scotland.

This report does not provide detailed new analyses of the economics or environmental impacts of biomass production and utilisation, but does review the data already available and present it in a manner that favours comparison between different biomass options, and with other renewable and conventional energy generation technologies.

1.4.2 Structure

This report will be divided into an executive summary and seven chapters, as follows:

• Chapter 1 is an introductory chapter, providing information on the various drivers for adoption of biomass as an energy source.
• Chapter 2 introduces the various biomass sources that have been suggested as suitable for Scotland. Information on their properties as fuels and issues related to their use for energy production will be presented here
• Chapter 3 provides Scottish-specific information on the current and future availability of individual biomass sources as well as specific constraints associated with their utilisation in Scotland.
• Chapter 4 provides a critical review of existing studies which evaluate the total primary energy inputs and total greenhouse gas emissions associated with different biomass sources of energy.
• Chapter 5 assesses the impact of different biomass systems on air quality and other environmental parameters such as water quality, soil structure and biodiversity.
• Chapter 6 provides an overview of the economics of biomass energy systems, including costs to producers, plant economics, delivered costs of heat/electricity, carbon abatement costs and available grants and credit systems for the promotion of bioenergy in Scotland.
• Chapter 7 presents the conclusions of the report, highlighting where further information is necessary for each of the topics covered in the report. Where sufficient information exists, recommendations will be made to inform policy makers in the Scottish Executive on potential strategies to promote the rational utilization of Scotland's biomass resources.

References

AEA Technology (2005). Renewable heat and heat from combined heat and power plants - study and analysis. A Report to DTI and Defra.

Biomass Taskforce (2005). Biomass Task Force report to government. October 2005.

Booth E, Booth J, Cook P, Ferguson B and Walker K (2005). Economic evaluation of biodiesel production from oilseed rape grown in North and East Scotland. Scottish Agricultural College Consultancy Division, October 2005.

Carbon Trust (2005). Biomass sector review. Available at : http://www.thecarbontrust.co.uk/carbontrust/about/publications/Biomass%20Sector_FINAL.pdf

Defra (2003). Energy crop schemes establishment grants. Available at www.defra.gov.uk

Defra (2004). Bioenergy infrastructure scheme - explanatory booklet. Available at www.defra.gov.uk

Department for Transport (2005). Press release : Darling takes action to make transport fuels greener. November 10, 2005. Available at : www.dft.gov.uk

DTI (2002). Preliminary information on the bioenergy capital grants scheme. Available at : www.dti.gov.uk

Elsayed MA, Matthews RW and Mortimer ND (2003). Carbon and energy balances for a range of biofuels options. Report URN 03/086, Project No. B/B6/00748/REP for DTI.

European Commission (2001). Renewables Directive 21/77/EC. Available at www.europa.eu.int

European Commission (2003a). Biofuel Directive. Directive 2003/30/EC, May 8, 2003. Available at: www.europa.eu.int

European Commission (2003b). EC Council Regulation No 1782/2003. September 29, 2003. Available at : www.europa.eu.int

European Commission (2005). Biomass Action Plan. Published December 7, 2005. Available at: www.europa.eu.int

Finnie R (2003). Securing a renewable future: Scotland's renewable energy. Available at: http://www.scotland.gov.uk/library5/environment/srfe-00.asp

Forum for Renewable Energy Development in Scotland - FREDS (2005a). Scotland's Renewable Energy Potential: Realising the 2020 Target. FREDS Future Generation Group Report, June 2005.

Forum for Renewable Energy Development in Scotland - FREDS (2005b). Promoting and Accelerating the market penetration of biomass in Scotland. FREDS Biomass Energy Group Report, January 2005.

House of Commons Scottish Affairs Committee (2005). Meeting Scotland's future energy needs: second report of session 2004-2005, Volume II - oral and written evidence.

IPCC (2001). Climate change: the scientific basis. IPCC Third Assessment Report.

King D. (2004). Science, Vol 303, Issue 5655, 176-177, 9 January 2004.

Kopelaar RHEM (2005). World oil production and peaking outlook. Report available at the Oil Depeletion Analyis Center website: www.odac-info.org

Renewables Obligation Order, Statutory Instrument 2002.

Rippengal R (2005). Scoping study: the commercial opportunities of wood fuel heating in Scotland. A report for Scottish Enterprise, December 2005.

Royal Commission on Environmental Pollution (2004). Biomass as a renewable energy resource.

Scottish Executive (2005). Key Scottish Environmental Statistics 2005.

Scottish Executive (2005b). Choosing our future: Scotland's Sustainable Development Strategy. Available at: http://www.scotland.gov.uk/Publications/2005/12/1493902/39032

Scottish Executive (2005c): Going for green growth: a green jobs strategy for Scotland. Available at: http://www.scotland.gov.uk/Resource/Doc/54357/0013160.pdf

Scottish Executive (2006). Changing our ways: The Scottish Climate Change Programme. Available at: http://www.scotland.gov.uk/Publications/2006/03/30091039/0

Scottish Executive (2006b). A forward strategy for Scottish agriculture: next steps. Available at: http://www.scotland.gov.uk/Publications/2006/03/01142456/0

Scottish Renewables (2005). Bioenergy in Scotland: realising its potential. Scottish Renewables Briefing, November 2005.

Smith P, Powlson DS, Smith JU, Falloon PD and Coleman K (2000). Meeting Europe's climate change commitments: quantitative estimates of the potential for carbon mitigation by agriculture. Global Change Biology 6:525-539.

Sustainable Development Commission for Scoltand (2005). Wood fuel for warmth. Edinburgh, June 2005.

Towers W, Birnie R, Booth E, Walker K and Howes P (2004). Energy from crops, timber and agricultural residue. SEERAD Report MLU/926/03.

Turley DB, Boatman ND, Ceddia G, Barker D and Watola G (2003). Liquid biofuels - prospects and potential impacts on UK agriculture, the farmed environment, landscape and rural economy. Report prepared for DEFRA.

United Kingdom Offhore Operators Association - UKOAA (2005). Gas - the UK's fuel of choice. Available at: http://www.ukooa.co.uk/issues/gas/

United Kingdom Government (2006). The government's response to the Biomass Task Force report.

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