Evaluating the UK policy frameworkfor Bio-energyR. Slade (*), C. Panoutsou and A. Bauen

The policy context

The UK energy system is evolving rapidly; drivers for change include:

Climate changeMarket liberalisationResource depletionInfrastructure replacement

Nevertheless, high level policy objectives have remained remarkably consistent:

“UK policy aims to ensure secure,

diverse and sustainable energy

supplies at competitive prices1”

Bio-energy has the potential to address

multiple policy objectives

Rural development

policy

Renewable energypolicy

Waste management

policy

Biomass

Rural development

policy

Renewable energypolicy

Waste management

policy

Biomass

Bio-energy Group, Imperial Centre for Energy Policy and Technology, Imperial College, Mechanical Engineering building 3rd floor, Exhibition Road, London, SW7 2AZ; www.imperial.ac.uk/icept; (*) email: r.slade@imperial.ac.uk.

Initial conclusions

In 2003 the UK Government introduced the reduction of CO2 emissions as a core objective of UK energy policy. Increased use of bio-energy is expected to make a significant* contribution to meeting this objective. An extensive framework of targets, incentives, economic and regulatory instruments is in place to drive

the development of the sector; nevertheless, progress is slow. This paper reviews the UK policy framework for bio-energy, proposes criteria by which policy effectiveness may be evaluated and draws initial conclusions.

The UK energy sector had been subject to a large number of policy initiatives, originating both domestically and via the EU.

Bio-energy policy

A basis for evaluation

Introduction

External constraints are surmountable

Objectives are unambiguous and agreed

A direct relationship exists between cause and effect

Outcomes are quantifiable; compliance reporting is reliable

Preliminary results

Notes and references: *The Carbon Trust: Biomass sector review, 2005. estimates that the proportion of UK energy supplied by biomass could increase from 1.5% to 3% in the short term and up to ~5% in the long term ;1Runci, P.J., Energy R&D in the United Kingdom. 2000, Pacific Northwest National Laboratory Battelle Memorial Institute ; 2Adapted from McCormick, J., Environmental policy in the European Union, p142-14, PALGRAVE.

Acknowledgements: We gratefully acknowledge the support provided for this work by the joint research councils through their sponsorship of the TSEC-BIOSYS project: Natural Environment Research Council (NERC), Engineering and Physical Sciences Research Council (EPSRC) and the Biotechnology and Biological Sciences Research Council (BBSRC).

Incentive schemes target all stages of the supply chain and innovation chain.

Multiple organisations are responsible for administration

The bio-energy policy arena is crowded: there is an extensive legislative framework, multiple initiatives, and multiple actors.

With the exception of heat, the coverage of Incentive schemes is comprehensive, but not necessarily optimal from a cost, land use or energy perspective.

Anticipated policy outcomes are poorly quantified: assessing policy effectiveness is thus a major challenge.

Evaluating whether the existing policy mix is sufficient to meet high level objectives requires a whole-systems approach.

A wide range of legislation impacts the development of UK biomass sector both driving it forward as well as restricting its development. Policy interactions are complex, subject to rapid change and frequently perceived as giving rise to perverse incentives. Aspects of plant development including: location, biomass production, transport and visual impacts may all be restricted by planning permission. The Pollution Prevention and Control regime, which restricts emissions to air, water and land on a site by site basis may also apply to large conversion plants. Over 17 incentive schemes exist that can be considered to promote bio-energy; regional variations also exist.

A basis for assessing policy effectiveness can be developed from studying past successes and failures. Effective policy initiatives are likely to embody the following principles2:

Resource extraction DistributionConversion

R&D

Knowledge transfer

Commercialisation

Supply chain

Innovationchain

17 incentive schemes identified3 including:

• Energy Crops Scheme

• Bioenergyinfrastructure scheme

• DTI technology programme

• Community energy

• ROCs

• Community renewablesinitiative

In addition to the legislation and consultative processes affecting the whole of the renewable energy sector, a number of recent high-profile policy reports have sought specifically to inform and influence the bio-energy policy debate in the UK. These reports include:

Royal Commission: ‘Biomass as a Renewable Energy Source’ UK Government: ‘Non-food Crops Strategy (& progress report)’ Biomass Task Force: ‘Report to Government’ UK Government: ‘response to the Biomass Task Force’ The Carbon Trust; ‘Biomass Sector Review’

Effective co-operation / minimal interdependence between implementing agencies

Adequate time and resources are available

A mechanism exists for enforcing compliance

Implementation should be considered at the same time as policy formation

If future UK bio-energy policy is to be effective, evidence of these principles should be manifest in existing policies and the current policy debate.

Pre-conditions for successful policy implementation

Recent policy reports fail to address all pre-conditions for effective implementation

2000

2001

2002

2003

2005

2004

EU ETS starts

Climate Change Programme Review Launched

Stern Review on Economics of Climate Change

Energy white paper published

UK Emissions Trading Scheme (ETS) Launched

Renewable Obligation on electricity suppliers introduced

Climate Change Levy introduced

Royal Commission for Environmental pollution recommends 60% CO2 reduction by 2050

Climate Change Programme sets framework for emission reduction (Kyoto-12.5% GHG by 2012; domestic -20% CO2 by 2010)

2006Renewable Transport Fuel Obligation (RTFO) announced

EU landfill of waste directive [99/31/EC] restricts landfill of biodegradable waste

Disposal of cooked meat waste to landfill banned from December 2005

EU Animal By-Products Regulation bans the disposal of raw meat wastes to landfill

EU strategy on biofuels published [COM(2006)34]

EU biomass action plan published [COM(2005) 628]

Utilities Act 2000 provides legal basis for Climate Change Levy and Renewable Obligation

EU Biofuels directive sets indicative targets for bio-fuels sales [2003/30]

Year Policy

TSEC BiosysTSEC Biosys

TSEC BiosysTSEC Biosys

RCEP: ‘Biomass as a Renewable Energy Source’

Non-food Crops Strategy

Biomass Task Force

UK Govt’: ‘response to the Biomass Task Force’

The Carbon Trust: ‘Biomass Sector Review’

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