Three weeks ago we released our Climate Bonds Bioenergy Standard for public consultation. Bioenergy is energy made available from materials derived from biological sources such as wood, manure or other agricultural byproducts. Using waste products is preferred due to reduced social and environmental risks. The focus of the proposed criteria is on liquid biofuels, biogas, and solid biomass used for heat and electricity.
We’ve had some interesting responses, including suggestions that climate change benefits from biofuels – one of the forms of bioenergy addressed – are “a fallacy”. Well, that’s not quite right.
There is good and bad bioenergy generation; and the bad can mean as high a level of greenhouse gas emissions (GHG) as fossil fuels.
However, if we can limit bioenergy to responsibly produced feedstocks or waste streams, then bioenergy has a place in the transition to a low-carbon economy. The Intergovernmental Panel on Climate Change (IPCC) backs this up.
In fact, according to the International Energy Agency (IEA), bioenergy will be an essential energy source for that transition because in some areas alternative energy sources are still a long way off: aviation, shipping, long-distance road transport, and high heat industrial applications. As a result, the IEA suggests that, by 2050, biofuels could provide 28% of total transport fuel, 7.5% of global electricity production and 15% of global heat production. WWF estimates even higher potential for bioenergy; its 2011 WWF Energy Report concluded that by nearly 50% of global energy consumption could be bioenergy based.
While we see an important role for bioenergy in certain sectors, we think additional measures are required. Better public transport, walking, cycling, and electric or hydrogen-powered vehicles will have to be part of the solution. We can’t simply shift to biofuels and maintain current transport patterns; we need a complete shift towards a more sustainable transport system. This is because the pool of sustainably produced feedstock for bioenergy is relatively limited at this stage, and the limited amount should be put to use to replace fossil fuels as a priority where other alternatives are lacking – in aviation, shipping and so on. The pool of sustainable feedback for bioenergy will expand as advanced biofuels are developed; but some these remain in R&D for the moment.
To help investors navigate through this tangled mess, especially to help them avoid those forms of bioenergy that can have negative environmental and social impacts, we need clear guidelines backed up by the scientific community.
That’s what our Climate Bond Standard Bioenergy Technical Working Group has been working on: a simple way to ensure that bioenergy bonds in the market ticks all the boxes on environmental performance. Members are leading academic experts and representative from international bodies such as the UN Food & Agriculture Organisation (FAO) and the International Institute for Sustainability Analysis and Strategy (IINAS).
Three key points to understand how biomass can be good, not bad – i.e. why we are bothering to develop bioenergy standards at all!
- With the right feedstock, bioenergy can have a much lower emissions profile than fossil fuels and can be a good alternative to those fuels, especially where alternative fuels are hard to find: for instance, aviation and shipping. This does not mean that bioenergy is necessarily zero-carbon: it most often involves some GHG emissions – it depends on how and where the feedstocks were produced and how much energy is needed to process the raw material into useful energy carriers. Waste products are likely to perform well. But even with dedicated feedstocks that are produced primarily for bioenergy, if best management practices are followed emission will be reduced in comparison with fossil fuels.
- Fossil carbon emissions are always additional, sustainable bioenergy carbon emissions should not add on long term to the World’s carbon burden. When burning fossil fuels the carbon emissions will always lead to additional carbon in the atmosphere. In case of sustainable bioenergy the carbon model is circular and the carbon emitted during bioenergy use can be recycled by the growing plants. Obviously there are a number of complicating factors, including how much fossil fuels input is required to produce the feedstocks, but it is our intention to incentivize best practice and promote those options that have the highest climate change mitigation potential.
- Not burning biomass for energy does not necessarily mean the emissions from that biomass will be zero. Biomass releases greenhouse gases also when it decays naturally over time. That applies to a range of agricultural and urban waste feedstocks — for example, roadside leftovers, agricultural residues, trees and bushes cut to free land for urbanisation. Some of these waste feedstocks are also burned right away to get rid of them, releasing emissions without harnessing the energy to replace fossil fuels.
Principles behind the draft bioenergy climate bond criteria:
- Bioenergy must demonstrate substantial emissions improvements over competing fossil fuels: at least 60% (liquid biofuels) or 70% (solid biomass).
- Conservation, biodiversity, ecosystem values have to be maintained.
- Water, soil and air resources have to also be maintained or enhanced.
- Direct impacts on food security are avoided. That means that bioenergy feedstocks must not compete with local food crops.
Be aware, though: the science around bioenergy is dynamic, and there remain uncertainties, especially around indirect impacts and around lifecycle analysis. But this is not a reason to ignore the benefits, and lots needs to urgently be done in areas such as sustainability of supply chains. The Climate Bonds Bioenergy Technical Working Group believes eligibility criteria are essential to clarify good and bad investments; but it has taken a conservative approach to inclusion to ensure as robust an approach as possible. Our standard will of course be updated over time as the science improves even further.
The consultation process on the Bioenergy Standard is open until 17 May; please do comment.
