The transport sector accounts for about 20% of EU’s GHG-emissions. Progress in emission reductions has been slow and primarily driven by biofuels promoted through national blending mandates. The mandates differ in whether they are measured in volume, energy, or emission reduction and in how gasoline and diesel are targeted. Due to this, national mandates and their effects have not previously been quantitatively compared on an EU level. In this article we convert the mandates for all EU member states between 2009 and 2020 to a common unit and study their impact on biofuel consumption, production, emission reductions and fuel prices. We find that mandates are driving biofuel consumption in the EU and correlates with emission reductions. Increased mandates have however often been fulfilled by blending biofuels eligible for double counting. We also find that reduction mandates have been effective in encouraging high-performance biofuels. For historical fuel prices, we do not see a clear correlation between countries’ shares of biofuel and consumer fuel prices while the global oil price has a considerable impact. For biofuel production, increased demand drive investments in the EU, but when it comes to localisation of new plants factors such as local infrastructure are more important than national mandates. 

Uncertain and unstable policy support has often been claimed to be a major cause of the slower than expected deployment of technologies for production of advanced biofuels. We investigate the economic rationale of this claim by applying a real options framework incorporating uncertainties regarding energy prices, investment costs, and prevalence of policy support, in terms of an economic support per produced unit of biofuel depending on the greenhouse gas (GHG) mitigation potential. Six industrially relevant forest-based technologies for production of drop-in biofuels were evaluated. The technologies were integrated with a pulp mill and an oil refinery and are at different stages of their technical development. The results show that there is a limited economic rationale behind the claim that policy uncertainties are a major source for the stalled deployment of forest-based biorefinery technologies. Only technologies that require very high policy support to become economically viable, with associated low likeliness of investment, showed any significant sensitivity to the policy uncertainty. The results show that the stalled deployment is mainly related to the uncertainties regarding investment costs and future energy prices — and not related to the specific policy uncertainty. The results show that the stalled deployment is mainly related to the uncertainties regarding investment costs and future energy prices. This results in technologies with lower sensitivity with respect to these uncertainties have a larger chance of becoming commercially relevant investment options. The findings show that reduced policy uncertainty will neither lead to earlier investments nor improve the commercial viability of emerging biorefinery technologies. Literature citing policy uncertainty as the main hindrance for commercial deployment cannot do so from an economic perspective without simultaneously investigating the impacts from investment cost and market price uncertainties. Additionally we find that if policy support is intended to promote investment in technologies with high GHG performance, it must be directed specifically to these technologies, otherwise, it is more beneficial to invest in technologies with more favourable conditions for investment and operational costs, but lower GHG performance. © 2022 The Authors

In Sweden, the iron and steel industry (ISI) is a major source of greenhouse gas (GHG) emissions. Most of the emissions result from the use of fossil reducing agents. Nevertheless, the use of fossil fuels for other purposes must also be eliminated in order to reach the Swedish emissions reduction targets. In this study, we investigate the possibility to replace fossil gaseous and liquid fuels used for heating in the ISI, with liquefied biomethane (LBG) produced through gasification of forest residues. We hypothesize that such utilization of fuels in the Swedish ISI is insufficient to independently drive the development of large-scale LBG production, and that other sectors demanding LBG, e.g., for transportation, can be expected to influence the economic potential for the ISI to switch to LBG. The paper investigates how demand for LBG from other sectors can contribute to, or prevent, a phase-out of fossil fuels used for heating purposes in the ISI under different future energy market scenarios, with additional analysis of the impact of a CO2 emissions charge. A geographically explicit cost-minimizing biofuel production localization model is combined with heat integration and energy market scenario analysis. The results show that from a set of possible future energy market scenarios, none yielded more than a 9% replacement of fossil fuels used for heating purposes in the ISI, and only when there was also a demand for LBG from other sectors. The scenarios corresponding to a more ambitious GHG mitigation policy did not achieve higher adoption of LBG, due to corresponding higher biomass prices. A CO2 charge exceeding 200 EUR/tonCO2 would be required to achieve a full phase-out of fossil fuels used for heating purposes in the ISI. We conclude that with the current policy situation, substitution of fossil fuels by LBG will not be economically feasible for the Swedish ISI.

In the endeavour to reduce CO2 emissions from the transport sector, biofuels from forest industry by-products are key. The adaptation of forest-based biorefinery technologies has so far been low which can partly be attributed to uncertainties in the form of policy instability, market prices, and technology costs. These uncertainties in combination with technology learning, which can be expected to reduce future investment costs, could make it favourable to postpone an investment decision. When applying real options theory, it is recognised that there is an opportunity cost associated with the decision to invest, since the option to wait for more favourable market conditions to occur is forfeited. In traditional discounted cash flow analysis, the impact of uncertainty and the value of reducing it (e.g. by waiting), is usually not taken into consideration. This paper uses a real options framework that incorporates the option to postpone an investment to reduce market uncertainties and wait for technology learning to occur. The focus is to investigate how the usage of an investment decision rule based on real options analysis affects technology choice, the economic performance, and when in time it is favourable to invest in pulp mill integrated biofuel production, compared with using a decision rule based on traditional discounted cash flow analysis. As an illustrative case study we examine a pulp mill which has the option, but not the obligation, to invest in either of two different biofuel production technologies that both use the pulp mill by-product black liquor as feedstock: (1) black liquor gasification followed by fuel synthesis, and (2) membrane separation of lignin followed by hydrodeoxygenation. With the usage of the real options framework and the inclusion of the uncertainties regarding future market prices and investment costs, the decision to invest is made later, compared with using traditional cash flow analysis. The usage of real options also reduces the likeliness of a net loss occurring if an investment is made, as well as increases the expected economic returns, showing the added economic value of flexibility in the face of uncertain future conditions. .

Fast pyrolysis of lignocellulosic biomass constitutes a promising technology to reduce dependence on fossil fuels. The product, pyrolysis liquids, can either substitute heavy fuel oil directly, or be upgraded via e.g. hydroprocessing to diesel and petrol. This study presents a systematic evaluation of production costs and CO2 mitigation potentials of different fast pyrolysis value chain configurations. The evaluation considers types of localisations, emissions from electricity and hydrogen production, biomass feedstocks, and final products. The resulting production costs were found to be in the range of 36–60 EUR/MWh for crude pyrolysis liquids, and 61–90 EUR/MWh upgraded to diesel and petrol. Industrial integration was found to be favoured. The CO2 mitigation potential for the pyrolysis liquids was in the range of 187–282 t-CO2/GWh biomass. High variations were found when upgraded to diesel and petrol –best-case scenario resulted in a mitigation of 347 t-CO2/GWh biomass, while worst-case scenarios resulted in net CO2 emissions. Favourable policy support, continued technology development, and/or increased fossil fuel prices are required for the technology to be adapted on an industrial scale. It was concluded that integration with existing industrial infrastructure can contribute to cost reductions and thus help enable the transformation of traditional forest industry into biorefineries.

Biorefineries for the production of fuels, chemicals, or materials can be an important contributor to reducing dependence on fossil fuels. The economic performance of the biorefinery supply chain can be increased by, for example, industrial integration to utilise excess heat and products, increasing size to improve economy of scale, and using intermediate upgrading to reduce feedstock transport cost. To enable a large-scale introduction of biorefineries it is important to identify cost efficient supply chain configurations. This work investigates a lignocellulosic biorefinery concept integrated with forest industry, focusing on how different economic conditions affect the preferred supply chain configurations. The technology investigated is black liquor gasification, with and without the addition of pyrolysis liquids to increase production capacity. Primarily, it analyses trade-offs between high biomass conversion efficiency and economy of scale effects, as well as the selection of centralised vs. decentralised supply chain configurations. The results show the economic advantage for biomass efficient configurations, when the biorefinery investment is benefited from an alternative investment credit due to the replacement of current capital-intensive equipment at the host industry. However, the investment credit received heavily influenced the cost of the biorefinery and clearly illustrates the benefit for industrial integration to reduce the cost of biorefineries. There is a benefit for a decentralised supply chain configuration under very high biomass competition. However, for lower biomass competition, site-specific conditions will impact the favourability of either centralised or decentralised supply chain configurations.

A large amount of energy is required in the production of steel where the preheating of blast in the hot blast stoves for iron-making is one of the most energy-intensive processes. To improve the energy efficiency of the steelmaking it is necessary to investigate how to improve the hot blast stove operation. In this work a mathematic model for evaluating the performance of the hot blast stove was developed using a finite difference approximation for the heat transfer inside the stove during operation. The developed model was calibrated and validated by using the process data from hot blast stove V26 at SSABs plant in Oxelösund, Sweden. The investigation shows a good agreement between the measured and modelled data. As a case study, the developed model was used to simulate the effect of a new concept of OxyFuel technique to hot blast stoves. The investigation shows that, by using this OxyFuel technique, it is possible to maintain the blast temperature while removing the usage of coke oven gas (COG). The saved COG can be used to replace some fossil fuel, such as oil and LPG. Furthermore, the effect of the cycle time on the single stove was studied. As expected, both the hot blast and flue gas temperatures are increased when increasing the cycle time. This shows that it is a good strategy for the hot blast stove to increase the blast temperature if the stove is currently not operated with the maximum allowed flue-gas temperature.

The paper presents some research work on applying the oxygen enrichment technique to hot stoves that was carried out in one European RFCS project. In the presented work, both theoretical and practical work was studied. A dynamic model was used to investigate the effects of oxygen enrichment on hot stoves' performance under the condition that only blast furnace gas was used as the fuel gas. The modelling results showed that SOE will enhance the combustion process in hot stoves by increasing hot blast temperature and shortening the on-gas time, which were further verified by industrial trials performed at an iron-making plant. In addition, CFD modelling was performed by simulating different oxygen levels and lance positions at the burner to avoid the hot spot formation during the combustion.

A large amount of energy is required in the production of steel where the preheating of blast in the hot blast stoves for iron-making is one of the most energy-intensive processes. To improve the energy efficiency it is necessary to investigate how to improve the hot blast stove operation. In this work a mathematic model for evaluating the performance of the hot blast stove was developed using a finite difference approximation to represent the heat transfer inside the stove during operation. The developed model was calibrated by using the process data from the stove V26 at SSAB Oxelösund, Sweden. As a case study, the developed model was used to simulate the effect of a new concept of OxyFuel technique to hot blast stoves. The investigation shows that,by using the OxyFuel technique, it is possible to maintain the blast temperature while removing the usage of coke oven gas. Additionally, the hot blast temperature increases while the flue gas temperature decreases, which allows for an increase of the blast temperature, leading to improved energy efficiency for the hot stove system.