Do current energy policies in Germany promote the use of biomass in areas where it is particularly beneficial to the system? Analysing short- and long-term energy scenarios

Background

Policymakers are tasked with both driving the rapid expansion of renewable energy technologies and, additionally channelling the limited national potential of biomass into areas where it can provide the greatest benefit to the energy system. But do current policy instruments promote the use of biomass in these areas? As biomass is limited, its use must be sustainable without leading to further biodiversity loss or depleting forest or soil resources. In this study, short-term energy scenarios are generated using the BenOpt model, which take into account both current and alternative policy instruments under limited biomass utilisation. The results are compared with long-term, cost-optimal energy scenarios for the use of biomass.

Results

The analysis reveals that the instrument of a GHG quota does not promote the use of biofuels in hard-to-electrify areas of the transport sector, where they should be cost-optimally allocated according to long-term energy scenarios. Biofuels are promoted for use in passenger road transport and not in the shipping or aviation sector. In contrast, alternative policy scenarios indicate that the sole instrument of a high CO2 price is more conducive to direct electrification and could displace more fossil fuels by 2030 than the GHG quota alone. This instrument also promotes the optimal use of biogas plants in the power sector in accordance with long-term cost-optimal developments.

Conclusions

The instrument of a GHG quota might lead to counterproductive developments in passenger road transport, but it also helps to ramp up the biofuel capacities required in shipping and aviation in the long term. However, it does not provide the necessary incentives for the ramp-up of battery electric vehicles, which would be the cost optimal solution in passenger road transport according to the long-term scenarios. Even though alternative policy scenarios show that the sole instrument of a high CO2-price is more conducive to direct electrification, a high CO2 price alone is not enough (e.g. in the heat sector) to promote the efficient use of biomass instead of simply covering the base load demand.