The role of biomass in the UK's energy sector and the net zero transition

More clarity on this issue will be provided when the Government’s Biomass Strategy is published in late 2022.

The Government’s Biomass Policy Statement, published on 4 November 2021, nevertheless gives some strong indications as to the likely direction of travel. Indeed, it provides a strategic view on the role of biomass across the economy in the medium- to long-term and, in doing so, touches on a wide range of issues. 

_{Finite biomass resources}

Biomass stocks are finite. Sustainable biomass stocks are too. Demand for both is expected to increase during the 2020s and beyond. However, the Policy Statement confirms that the UK Government is committed to using sustainable biomass only, whether derived from international or domestic sources. 

In turn, we expect that domestically sourced (UK) stocks will likely have to play the central role under the

Business Strategy unless and until a more robust global sustainability governance regime is put in place to evidence international stocks’ sustainability. 

In any event, there is uncertainty about the amount of sustainable biomass that will be available in both the near and long-term future (both domestically in the UK and from abroad). In this regard, the Biomass Strategy is expected to set out the results of a review of the amount of sustainable biomass available to the UK (including domestically grown perennial energy crops and short-rotation forestry), and how such resources (volumes and types) could be best deployed to help the Government achieve its net zero commitment. 

Of course, steps will be, and are already being, taken to try to increase the available amount of stocks. For example, the Government is providing GBP 4 million in funding to support innovation in the production of sustainable domestic biomass through its “Biomass Feedstocks Innovation Programme”. As the Net Zero Strategy itself observes, the increased supply of biomass for bioenergy conversion (eg derived from projects supported by the Innovation Programme) will be a critical factor for the success of bioenergy with carbon capture and storage (BECCS). It remains to be seen, however, how successful these measures will be.

_{Prioritised uses}

In light of the finite quantity of feedstocks, the Biomass Policy Statement emphasises that their use should be prioritised in accordance with certain core principles, including (especially from the medium term onwards):

• “compliance with [current and emerging] sustainability criteria and waste hierarchy principles; 
• contribution to carbon budgets and net zero considering feedstock availability, life-cycle greenhouse gas emissions, and cost-benefits; and 
• [use in connection with] carbon capture utilisation or storage where feasible, otherwise used only in hard-to-decarbonise sectors with limited or no low carbon alternatives.”

In other words, the Government expects that hard-to-decarbonise energy intensive areas (aviation and industry are explicitly named) will (in time) be given priority, especially where the stocks will be used to help with wider decarbonisation efforts (eg the production of sustainable aviation fuel and hydrogen production).

Projects which provide circular economy benefits and which use materials from towards the bottom of the waste hierarchy will also seemingly be prioritised. 

When published, the Biomass Strategy is expected to expand on these concepts, and to present a detailed priority use framework which sets out the best use of biomass across the UK’s economy (i.e. with the objective of achieving not only net zero but also wider environmental goals). BECCS can be expected to be favoured within this framework.

_{Role of BECCS}

The Net Zero Strategy confirms that the 2022 Biomass Strategy will set out the role which BECCS can play in reducing carbon emissions and how the underpinning technologies could be deployed in the UK moving forward. It further notes that, given the limited supplies of sustainably sourced biomass, the UK may need to prioritise its biomass stocks where they can be combined with BECCS projects which result in negative emissions. 

The Policy Statement expands upon this. It confirms, for instance, that future large-scale biomass-based electricity generation will not be supported unless carbon capture and storage techniques are also utilised. It also outlines that the Government intends to develop a business model to support BECCS in the power sector and to develop a BECCS policy that only rewards genuine negative emissions (ie that applications for new BECCS projects must only use sustainable biomass which removes more emissions from the atmosphere than it creates). The assessment in this regard will need to include all emissions (including methane and nitrous oxide) from the entirety of the BECCS supply chain. The application of appropriately constructed and applied sustainability standards will be central to this.

_{Carbon pricing}

BECCS can be deployed alongside various technologies, including conventional combustion technologies, sustainable fuels production, and anaerobic digestion (amongst others). Where used, it can deliver negative emissions. However, existing policies and emissions markets are not designed to value such negative emissions at present. We expect this will change.

The Government has committed to consulting on business models for engineered greenhouse gas removals (GGRs) in Spring 2022. The consultation will set out its preferred support mechanisms to incentivise negative emissions from BECCS (and other carbon reduction technologies). One possible approach (which has been acknowledged by the Government) would be to bring such projects within the operational ambit of the UK’s Emissions Trading Scheme (ie to generate credits which could then be sold to third parties). Other approaches could, however, be used.

_{Role of waste}

The majority of biomass sourced from the UK comes from biogenic wastes and residue resources (eg in the transport sector, where wastes and residues already account for more than two thirds of the stocks used to produce renewable fuel supplies). Such wastes are expected to continue to play a key role moving forward.

Stocks can be expected to grow in the short term, as initiatives such as mandatory obligations on local councils to collect food waste are introduced. In the longer term, however, waste supplies may reduce as a consequence of wider waste reduction efforts.

_{Environmental issues}

Various environmental issues may arise as a consequence of the increased use of biomass (for use in BECCS or otherwise). 

In connection with the production of arable feedstocks, for example, careful consideration will need to be given to matters such as biodiversity loss and water usage (set against a backdrop of increasing global water scarcity in a changing climate). Certain stocks (eg maize) may further risk soil health. We expect further colour on these points to be provided within the Biomass Strategy.

The combustion of feedstocks as fuels may also present issues, particularly in light of the UK’s air quality commitments. Emissions of particulate matters will have to be carefully managed in particular. The exact impacts on air quality will, of course, vary greatly from project to project, where they are located and the types of technologies that are being used. We anticipate, however, that, with the growing deployment of biomass, regulatory requirements that apply to their use (primarily through environmental permitting and Best Available Techniques) will need to be further developed and refined. 

_{Other matters}

The Policy Statement re-affirms that biomass will continue to play a material role in connection with a wide range of other sectors and purposes not described in detail here. These include, for instance, more stringent targets in the Renewable Transport Fuel Obligation regime, the development of sustainable aviation fuels and their role in connection with the Hydrogen Strategy. Further research and innovation will also be necessary. We do not explore these issues further here, but note (as should other interested parties) that the Biomass Strategy should be seen as merely one, albeit sophisticated, piece in a much wider jigsaw.

_{Next steps}

The Biomass Policy Statement confirms that the Biomass Strategy will be published in late 2022. It is expected that this will set out clear actions that will be taken vis-à-vis biomass over the coming decade. Ahead of this, the Government plans to complete a range of actions. These include:

• engaging further with stakeholders, particularly around the priority use framework principles described above;
• identifying key policy gaps that need to be addressed, and developing frameworks to support these policies; 
• reviewing both the amount of sustainable biomass available, and the current sustainability criteria (taking into account environmental and social aspects); and
• assessing the regulatory landscape more generally for pollutant emissions from biomass to ensure that any gaps are addressed (and considering further the case for tightening emissions standards).

Options will also be presented at some point during 2022 for a post-subsidy market where the impact of carbon pricing needs consideration.

Parties with an interest in the UK biomass space will, therefore, need to pay close attention over the course of 2022 as the final Biomass Strategy is finalised.