Biomass Demand for Transport Fuels, Aviation and Shipping up to 2050 and Implications for Biomass Supply to the Chemical Sector

January 22, 2025

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(Renewable Carbon News) Current transport regulations provide a unique long-term horizon for sustainable aviation and shipping fuel through the defined quotas – what does this mean for the chemical sector? -- Following the Green Deal, the EU is leading the way in transforming its transport sector towards climate neutrality. The current transport regulations provide a unique long-term horizon for sustainable carbon-based fuels in aviation and shipping through the defined quotas, in particular for biomass covered by Annex IX, and synthetic CO2-based fuels.

A new report by the Renewable Carbon Initiative (RCI) develops and analyses three future scenarios for carbon-based fuel demand until 2050 – each a possible development under current policy rules. The results visualise that the demand for second-generation biomass biofuels will increase significantly, mainly due to the increasing quotas set for aviation fuels and shipping. This projection not only highlights potential risks to the ecological balance and resource sustainability that need to be managed carefully, but also poses significant barriers for other sectors that require renewable carbon to defossilise their products. In particular, the chemicals and materials sector has to rely on biogenic and captured carbon as a feedstock in the long term.

But in direct competition with the fuel sector and without comparable regulatory incentives, the sector will have severely limited access to second-generation biomass and captured carbon. However, the production of bio-based and synthetic fuels can also support the development of renewable carbon in chemicals, as some by-products of their production can be used as a chemical industry feedstock.

RCI commissioned experts from the nova-Institute (Germany) to prepare this report. It contains 11 tables and 9 graphics, as well as a detailed description of the latest fuel regulations in the European Union, which are of high value to stakeholders from other sectors with demand for biomass and CO2 utilisation. Although the focus is on Europe, the report also includes global scenarios and analysis. The main findings and conclusions are summarised below, for detailed analysis please see the report. You can download the full report for free here: https://renewable-carbon.eu/publications/product/eu-and-global-biomass-demand-for-transport-fuels-aviation-and-shipping-up-to-2050-and-implications-for-biomass-supply-to-the-chemical-sector-pdf/

The existing transport regulation directs second-generation biomass to aviation and shipping

In the current European regulatory situation, the chemical sector will not be able to compete with the SAF sector for second-generation biomass (Annex IX), because the binding quotas mean that SAF producers are willing to pay much higher prices for the same biomass. The high demand from the transport sector is likely to absorb almost all available second-generation biomass, with prices rising with demand, severely limiting the availability of second-generation biomass for use in the chemical sector.

A higher share of synthetic fuels, beyond the mandatory shares, could reduce the competition for bio-based feedstocks, and allow some of the second-generation biomass to be used in the chemical industry, thus creating a more level playing field.

There are significant potential synergies between transport and material sectors

The production of biofuels generates a number of valuable co-products that could be made available to the chemical industry. For example, the by-product of Fischer-Tropsch Sustainable Aviation Fuels (SAF) production is high-quality naphtha – with a share about 15% a perfect feedstock for steam crackers in the chemical industry. The modelling showed that, depending on the future technology mix, approximately 1 to 2 million metric tons of bio-based naphtha could be expected as a side-product of bio-based SAF production, within the already calculated biomass demand for SAF. Securing these streams for the chemical industry can help ensure that synergies between the sectors are fully exploited.

Industrial biomass utilisation should be based on scientific, objective arguments which include land-use efficiency

The objectively questionable exclusion of food and feed crops from future aviation fuels provides an opportunity to use these crops for the chemical sector. Reduced demand for food and feed crops from road transport allows the chemical sector to use more food and feed crops without additional land. Ethanol and biodiesel plants could be maintained and transformed into feedstock suppliers for the chemical industry, preserving the substantial existing infrastructure, innovation and employment that was created over past decades through significant investment. Modelling shows that it is possible to increase the supply of starch, sugar and vegetable oil to the chemical industry in 2050 under a moderate high-tech scenario without compromising food security, sustainability and biofuel/SAF production. Changing the image of the use of food and feed crops in industry and gaining long-term political acceptance would not only follow the scientific arguments, but would also support the chemical sector on its path towards defossilisation and sustainability.

Electrification of the transport system in combination with transforming carbon-reliant industries enable a sustainable system that utilises biomass

Combining the decarbonisation of energy and transport with the defossilisation of carbon-dependent sectors offers a holistic approach to sustainability. This integrated strategy creates a net-zero vision that encompasses the widespread adoption of electric vehicles alongside the transformation of carbon-dependent sectors like aviation and chemicals. Such an approach would minimise carbon demand in transport while establishing sustainable carbon cycles in industries that inherently require carbon. Moreover, it opens up opportunities for innovation and prompts a re-evaluation of using food crops in chemicals and materials production.

The future transport fuel mix will be significantly influenced by the ambitious regulatory framework in the EU, leading to significant and increased demand for bio-based and CCU-based carbon feedstocks. Ensuring a sustainable supply of second-generation biomass to meet the high demand for biofuels, particularly in aviation, while balancing the needs of the chemical industry, will require further strategic policy interventions to ensure a level playing field, enforce a circular economy and aligning the policies with the principle of cascading use. A holistic approach to these challenges is essential to ensure sustainable and resilient transport and chemical industries for decades to come. By addressing these interconnected challenges simultaneously, a more cohesive and sustainable industrial ecosystem can be created, balancing the needs of various sectors while moving towards a defossilised future.

“Our research reveals a critical need for balanced policies that support both the transport and chemical sectors in their transition to renewable carbon sources,” says Michael Carus, Executive Manager of the Renewable Carbon Initiative. “Without coordinated and strategic approaches, we risk creating unintended barriers for the chemical industry’s defossilisation efforts.”

The findings of this report underscore the urgent need for policymakers, industry leaders, and stakeholders to collaborate on carbon management by developing a holistic approach to renewable carbon and its allocation. We call on EU legislators to consider these insights in upcoming policy reviews, and invite industry players to engage with RCI to explore innovative solutions. Download the full report to learn more about how we can create a sustainable future for both the transport and chemical sectors.

Disclaimer

RCI members are a diverse group of companies addressing the challenges of the transition to renewable carbon with different approaches. The opinions expressed in these publications may not reflect the exact individual policies and views of all RCI members.

About RCI

The Renewable Carbon Initiative (RCI) is a global network of more than 60 prominent companies dedicated to supporting and accelerating the transition from fossil carbon to renewable carbon (bio-based, CO2-based and recycled) for all organic chemicals and materials. Its work focuses on scientific background reports, position papers, advocacy and networking. READ MORE

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Study Confirms Biomass Can Meet 20% of Carbon Demand in Chemicals Sector by 2050 without compromising food and feed supply (Renewable Carbon Initiative)

Excerpt from Reneawble Carbon Initiative: New study by Renewable Carbon Initiative and Biobased Industries Consortium reveals potential for significant defossilisation of the chemical industry using biomass

A new study commissioned by the Renewable Carbon Initiative (RCI) and the Biobased Industries Consortium (BIC) reveals that meeting 20% of the total global carbon demand of the chemicals and derived materials sector by 2050 from biomass is achievable and sustainable. This key finding highlights the potential for defossilising the industry, which currently relies on fossil resources for over 90% of its carbon needs.

The chemicals and derived materials industry is heavily dependent on carbon, with more than 90% of this embedded carbon today coming from fossil resources such as oil, natural gas, and coal, which are major contributors to climate change. To achieve climate neutrality by 2050, the embedded carbon in chemicals and materials must be defossilised and replaced with renewable alternatives from biogenic carbon, carbon from CO2, and recycling. Various reports estimate the share of biomass to be around 20%. However, there is scepticism about how much biomass is actually available in addition to food and feed needs.

RCI and BIC commissioned a study to address the core question: Can agricultural and woody biomass together provide enough biomass to sustainably meet 20% of the future carbon demand of the chemical and derived materials industries in 2050, up from 5.5% (EU27) and 10% (global) in 2023? The study was carried out by nova-Institute (DE) in collaboration with EuroCARE Agricultural Policy Research (DE) and the Thünen Institute of Forestry (TI-WF, DE).

To investigate this question in an objective, scientific manner, the study established a baseline of current biomass use and developed different future scenarios to model a range of possible developments. These scenarios consist of one Business-as-usual (BAU), two Green Low Resource Depletion (LRD) and three Green High Technology (HT) scenarios. Together with EuroCare and Ti-WF, the developments of biomass availability were then analysed for these scenarios, both for agriculture and for forestry.

The key result of the study: Yes – meeting 20% of total global carbon demand of the chemicals and derived materials sector in 2050 from biomass is achievable and sustainable. Under the moderate HT scenario, which is the most likely development, the 20% share can be delivered without compromising food and feed supplies and biofuel demand. Providing much more than 20% of carbon demand from biomass would be unreasonable under existing biofuel policies and only a moderately high-tech agricultural system; stronger high-tech scenarios could provide up to 40%.

Agriculture: Across all scenarios, it is expected that agricultural biomass production will grow steadily until 2050. The main driver of this is the additional demand for food and feed, due to population growth from 7.7. to 9.6. billion humans by 2050. Depending on the type of scenario – Business-as-usual (BAU), Green Low Resource Depletion (LRD) or Green High Technology (HT) – growth rates range from 24% to 53%, for BAU the projected increase is 31% or up to 5.07 billion tonnes.

The projected future demand for starch, sugar and vegetable oil – still the dominant feedstocks for the chemical industry in 2050 – can be met in the high-tech scenarios: The additional yield required is around 10% (compared to BAU), so the moderate HT+10 scenario is fully sufficient to meet the demand. Stronger high-tech scenarios in agriculture, e.g. through AI, precision farming, drones or GMO, can even provide enough biomass to significantly exceed the 20% target, up to 40%.

Technological innovation therefore appears to play the most important role in achieving the 20% target. At the same time, the more efficient production and use of biomass in HT scenarios allows more land to be set aside and used for nature restoration.

To increase the share of available biomass, more lignocellulosic feedstocks such as straw, wood and biowaste can be used. However, access to these particular feedstocks faces strong competition from Sustainable Aviation Fuels (SAF) with strong political support through quotas.

The amount of straw available for use could be greatly increased if in addition to wheat, barley, rye and oat straw, also corn and rice straw were tapped into. If these volumes became available, it could turn straw into an important feedstock.

Forestry: Global supply and demand of industrial roundwood (coniferous and non-coniferous) will globally increase by an estimated 38% between 2020 and 2050, from 0.9 to 1.3 billion tons dry matter (t dm) per year. The largest increase in supply is expected in Asia (69%), including China and Russia, but a significant increase of 32% is also seen for Europe. The differences between the scenarios are comparatively minor compared to the agricultural sector.

The additional demand from the chemical and materials industries is comparatively small compared to the fast-growing traditional applications of wood, mainly construction and furniture. This means that, in principle, it is very feasible to meet the chemicals and materials demand in the long-term. There are several options for achieving this: (1) use a relatively small proportion of total industrial roundwood supply (evaluate cost-effectiveness), (2) use of by-products from industrial roundwood processing (problem of high competition), or (3) divert a relatively small proportion from the fuelwood sector.

Taking a holistic view, the additional demand of the chemical industry for biomass to cover 20% of its production by 2050 is comparatively small, even for Europe: The demand for European primary agricultural biomass would require about 8% of the total supply (30 out of 390 million t dm) and approximately 3% of European forestry supply (industrial roundwood, fuelwood and industrial roundwood by-products, 12.6 out of 398 million t dm).

Read the full report at https://renewable-carbon.eu/publications/product/is-there-enough-biomass-to-defossilise-the-chemicals-and-derived-materials-sector-by-2050-a-joint-bic-and-rci-scientific-background-report/

Or explore an in-depth presentation here: https://renewable-carbon.eu/publications/product/joint-webinar-hosted-by-bio-based-industries-consortium-bic-and-the-renewable-carbon-initiative-rci-february-2025-pdf/

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Biomass Demand for Transport Fuels, Aviation and Shipping up to 2050 and Implications for Biomass Supply to the Chemical Sector

The existing transport regulation directs second-generation biomass to aviation and shipping

There are significant potential synergies between transport and material sectors

Industrial biomass utilisation should be based on scientific, objective arguments which include land-use efficiency

Electrification of the transport system in combination with transforming carbon-reliant industries enable a sustainable system that utilises biomass

Disclaimer

About RCI

Disclaimer

About RCI

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