Monitoring framework and the KPIs for advanced renewable liquid fuels (RESfuels)

This report is the first of a series in monitoring reports of the ADVANCEFUEL project. The objective of this report is to inform the stakeholders (i) on the status of advanced renewable fuels (RESFuels), related investments, policies in different countries, and the developments on feedstock prices, and (ii) on the preliminary outcomes of the ADVANCEFUEL project related to cost reduction potential of dedicated cropping systems and the identification of good practices and policies. The results presented here are based on a monitoring framework of selected key performance indicators (KPIs) previously presented in the ADVANCEFUEL deliverable D1.2.

Globally, the total lignocellulosic ethanol production capacity is currently ~ 300 kt/a. Brazil holds the largest installed production capacity, with a total of 30%, followed by 25% in the US. In Europe, the installed production capacity is around 11% of the overall capacity. There are, in total, 10 operational commercial-scale, first-of-a-kind (FOAK) demonstration plants. The largest ones are in the US (POET-DSM) and Brazil (GranBio). There is currently only one operational FOAK demonstration plant in Europe, termed: ChemCell Ethanol from Borregaard Industries AS in Norway. This plant utilises sulphite spent liquor from spruce wood pulping. In recent years, difficult market conditions coupled with high operational costs and financial difficulties have resulted in the closure of several lignocellulosic ethanol plants, including the Beta Renewable plant in Italy (which began operation in 2013 as the world’s first commercial-scale cellulosic ethanol facility). The total installed production capacity would increase by 90% in the case where the existing idle plants become operational again. In comparison with lignocellulosic ethanol, the production of biodiesel using lignocellulosic feedstocks is negligible. The only operational renewable diesel plants in Europe (Finland and Sweden) use tall oil as the main feedstock. Renewable fuel production from non-biological (refers to synthetic fuels produced from CO2 and H2. H2 can be produced via water electrolysis using renewable energy) is in a pilot and demonstration phase, and the total installed capacity in Europe is estimated to be around 6 kt/a.

The US and Italy were the first two countries to introduce dedicated mandates for advanced biofuels. In the US, a cellulosic biofuel mandate became a part of the revised Renewable Fuel Standard (RFS), which was announced in 2007, while the Italian advanced biofuel mandate was announced in 2014. In Europe, the revised Renewable Energy Directive ((EU) 2018/2001) introduced an EU-wide obligation to fuel suppliers in Europe. This directive also introduced a sub-mandate for advanced biofuels. The sub-mandate regarding advanced biofuels will be 0.2% in 2022, 1.0% in 2025, and 3.5% in 2030.

Investments to advanced biofuels have been relatively small when compared with the investments to conventional biofuel. Biofuels experienced a steady growth in new investments from 2005 to 2007, when growth in first-generation biofuels was increasing. After 2008, investments in biofuels started to decline and fluctuate at lower levels. New investments to advanced biofuels started in 2008 and has since followed a steady path.

Feedstock prices next to the capital costs are the dominant cost factor effecting the advanced biofuel production costs (feedstock costs comprise ~40% of the total production cost of biofuels). However, there are currently no established markets to define feedstock prices dedicated to advanced biofuels.

A thorough literature survey was performed to identify innovations that can help reduce production costs of dedicated crops. The production costs of those innovations were compared to reference scenarios (before innovation implementation) in order to identify the cost reduction potential. Biomass cost reduction can be carried out at a rate of 7-25% when innovative approaches such as: propagation by seeds and/or by stem segments, increasing the planting density, economy of scale, and learning effects are considered. Cropping on marginal lands may, however, increase the production costs (in the range of 10-17%) rather than reduce.