The Federal Government’s “Australia’s Bioenergy Roadmap” report outlines the benefits of bioenergy and the huge opportunity it offers for Australia, writes Paul Faraggi, principal, Enea Consulting, and John O’Brien, partner, Deloitte Australia.
Published at the end of 2021, the Federal Government’s “Australia’s Bioenergy Roadmap” report sets out the benefits of bioenergy, with key insights on its potential, market opportunities, resources and applicability to hard-to-abate sectors and other markets to 2050 and beyond.
Six months on, the Bioenergy Roadmap has certainly generated traction in the market.
In the 2020 EcoGeneration article, “Biogas: The energy wonder that’s under our noses”, former Enea Consulting principal Mendo Kundevski wrote: “As the world grapples to drive deeper and faster decarbonisation to limit global temperature increases to under 1.5 degrees Celsius, waste issues should not be overlooked. It can be easy to forget about waste once it is sent to landfill, but it’s a valuable resource that has inherent environmental and economic value.”
Indeed, using organic waste to generate renewable energy can help address climate change, support waste management, boost economic opportunities and provide significant decarbonisation potential across the economy.
But how exactly can we realise the potential of bioenergy in Australia, given our unique market characteristics and hard-to-abate sectors?
The Bioenergy Roadmap sets out the path.
What is bioenergy?
Bioenergy is a form of renewable energy generated from the conversion of biomass into heat, electricity, biogas and liquid fuels. Biomass is organic matter derived from forestry, agriculture or waste streams.
Biomass can even include human waste, but despite many of the understandings around it perhaps being influenced by the types of initiatives that tend to receive widespread media attention – such as the first bio airport bus in England that received the somewhat unfortunate, but technically accurate, nickname of the “poo bus” – the bioenergy sector is a complex industry, comprising different resources, technologies, products, co-products, stakeholders and markets.
In Australia, Bioenergy accounts for 47 per cent of Australia’s current renewable energy production and three per cent of total energy consumption, with modelling showing it has the potential to provide up to 20 per cent of Australia’s total energy consumption by the 2050s.
As the Bioenergy Roadmap demonstrates, there is considerable scope for expansion of the industry in Australia – and significant benefits to be realised – if commercial scale can be achieved and production costs can be reduced.
The Bioenergy Roadmap
Released in November 2021, Australia’s Bioenergy Roadmap, funded by the Australian Renewable Energy Agency (ARENA) and presenting the findings of Enea and Deloitte, sets out key insights on Australia’s bioenergy potential, bioenergy market opportunities, hard-to-abate sectors, other markets and bioenergy resources.
With the strategic aim of identifying where Australia’s comparative advantages in bioenergy could develop into an industry that is economically competitive with established technologies, while reducing emissions and unlocking new opportunities across Australia, it provides the framework to inform future policy and investment decisions across all levels of government and industry.
The benefits of bioenergy
As well as addressing low-emissions energy technologies, the Bioenergy Roadmap sets out the clear economic benefits of developing a strong bioenergy industry in Australia. Bioenergy has the potential to create around $10 billion in additional GDP and 26,200 new jobs by the 2030s, and $14 billion in extra GDP and 35,300 new jobs by the 2050s.
Bioenergy also has the potential to significantly enhance Australia’s fuel security and divert an extra seven per cent of waste from landfill.
The benefits for the community, including in regional areas of Australia, are also clear. With many bioenergy feedstocks coming from agricultural activities such as sugarcane waste and livestock industries, bioenergy has the potential to support long-term regional employment and provide additional revenue streams for farmers, both of which ultimately lead to national economic growth.
Australia’s bioenergy resource potential
Central to the realisation of Australia’s bioenergy potential is the efficient and sustainable use of its vast resources. According to the Bioenergy Roadmap, the nation’s theoretical bioenergy resource potential is significant – estimated to be more than 2600 petajoules (PJ) per year. This means if this potential is economically feasible, it would represent more than 40 per cent of Australia’s current primary energy supply and more than 10 times its current bioenergy production.
Within that potential, the Bioenergy Roadmap outlines:
- Organic wastes and residues are the largest resource opportunity for developing the bioenergy industry in the short-term, representing 37 per cent of Australia’s current potential. These are less expensive to produce as they have fewer competing uses than primary resources, and pose fewer social licence obstacles.
- Agricultural resources can complement the wastes and residues opportunity. While they have the largest potential at 41 per cent of Australia’s resource prospective, agricultural resources are more expensive to produce than wastes. They also have competing uses, but there is potential to improve the sustainable utilisation of these resources.
- The forestry sector accounts for 22 per cent of total resource potential, largely comprising plantation forests, most of which are certified sustainable forestry residues and wood processing wastes. Given the low community support for harvesting native forests, this resource is not feasible for the bioenergy industry.
The challenges of Bioenergy
As outlined in the Bioenergy Roadmap, growing the bioenergy industry to the levels required to realise the projected benefits will not come without significant work.
It will require careful consideration of the industry’s complexity and its many different resources, technologies, products, co-products, stakeholders and markets. It will also be important to consider that even though bioenergy can be cost-competitive in some markets, long-term production cost reductions can be limited due to the dispersed nature of bioenergy resources as well as mature technologies in all markets, except aviation.
While there is potential for bioenergy feedstock collection and transport costs to be reduced through supply chain improvements, such reductions will not be enough to make all bioenergy production pathways cost-competitive.
The Bioenergy Roadmap also shows that consistent, sustainable policy support, with industry partnerships, is integral to establishing and growing a bioenergy industry, cautioning that policy by itself is insufficient. It explains the industry needs to build its capabilities, develop innovative projects and business models, and clearly articulate where bioenergy has a comparative advantage against other low-emissions alternatives.
The Bioenergy Roadmap also points out these integrated efforts have proven to be successful in other jurisdictions, and how they are expected to foster equivalent benefits in Australia.
It also highlights the challenges around community awareness and perceptions of bioenergy, with many of the stakeholders consulted pointing out social acceptance as a significant consideration for the expansion of the bioenergy sector. Given perceptions have the potential to greatly impact the social licence for projects, it needs to be acknowledged. However, people also need to be empowered with detailed information about the sector and its benefits.
Opportunities and actions: four key themes
The Bioenergy Roadmap identifies several opportunities and possible actions for industry, state governments and the Federal Government. These are grouped under suggested timeframes of 2021-2024 and 2025-2030, with four key themes:
- Enabling market opportunities in hard-to-abate sectors.
- Enabling market opportunities where bioenergy can complement other low-emissions alternatives.
- Developing Australia’s resources.
- Building supportive ecosystems.
The way forward
Bioenergy has potential to complement other low-emissions energies to reduce emissions. It can also enhance regional development, reduce reliance on imported liquid fuels and assist waste recovery.
Its potential is underpinned by the fact that, globally, bioenergy production benefits from relatively mature technologies that have been technically and commercially demonstrated across most markets. New technologies are being developed to better use organic wastes and residues, and overcome resource constraints.
Bioenergy can easily be integrated into existing energy systems compared to other low-emissions technologies such as hydrogen or intermittent renewables. Hopefully all of this means that in Australia we will soon see bioenergy move from something that has been under our noses for so long to something increasingly in front of our eyes.
Download “Australia’s Bioenergy Roadmap” at enea-consulting.com/en/publication/australias-bioenergy-roadmap