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Forest-derived methane may contribute significantly to a vehicle fleet independent of fossil fuels by 2030. At present, there is sufficient technical knowledge about energy conversion methods and several Swedish actors have investigated and prepared investments in production facilities, but the technology is not commercially mature yet and it needs support during a development period. Investments in the technology have become less favorable because of the drop in the oil price in 2014. In addition, the predictability of the policy instruments supporting production and use of renewable energy are perceived as low by investors. This report emphasize that these factors combined are major reasons why potential investments are postponed. We have conducted a literature study and an interview study with three industry actors to answer the question “How can forest derived methane complement biogas from anaerobic digestion in the Swedish transport sector?” Interviews were mostly conducted in situ and in co-operation with the f3 project “Examining systemic constraints and drivers for production of forest-derived transport biofuels” (f3 2014-002370). The literature study included the recent development of renewable transport fuels in Sweden, existing and proposed policy instruments, and possible technical pathways from forest biomass to transport fuels. Sweden has accomplished a high share of renewables in the transport sector – 12 % based on energy content or 17 % when accounting in accordance with the EU Renewable Energy Sources Directive (RES). Thus, Sweden has the highest share of renewables in the transport sector among the member states and has with a good margin accomplished the EU-RES target of 10 % renewables by 2020. The use of electricity in plug-in electric vehicles is not included in these figures and the number of electric vehicles is increasing rapidly. The most common biofuels in transport are biodiesel, ethanol, and biogas. Biodiesel increases rapidly, mainly through low blend-in, and is now the most common biofuel in the Swedish transport sector. The majority is HVO (Hydrotreated Vegetable Oils), but the share of FAME (Fatty Acid Methyl Esters) is still considerable. The use of ethanol peaked during 2008 and has been decreasing since then. Ethanol is distributed through both low and high blend-in (E5 and E85). The use of upgraded biogas in the transport sector has increased continuously since its introduction 1996. Upgraded biogas is complemented by natural gas to meet the vehicle gas demand. A voluntary agreement among the distributors maintains a minimum biogas share that corresponds to 50 %. The biogas share is much higher today (74 % by volume, average Jan.-Aug. 2015) and some large end-users use pure upgraded biogas. Upgraded biogas is mainly distributed in compressed form through gas cylinders (79 %), but also through injection to the natural gas grid (21 %). Very little biogas is distributed in liquid form (LBG). Studies of the practical production potential shows that the current vehicle gas demand could be met entirely with upgraded biogas. However, an increased demand will eventually require other production pathways based on other feedstocks. Gasification of forest biomass is one such pathway. One alternative is that an increased demand is met with natural gas, resulting in fossil lock-in effects. Another alternative is a stagnated vehicle gas market. Production of upgraded biogas and use in the transport sector have been promoted in different ways, e.g., demand on handling of waste that will promote anaerobic digestion, investment support to production facilities, support to distribution infrastructure, environmental car premiums, and exemptions of energy and CO2 taxes. The tax exemptions are only granted until the end of 2015 but the Swedish government has applied for permission to the European Commission for a tax exemption until the end of 2020. A biofuel may only be compensated to a certain level to comply with rules set by the European Commission. If the renewable alternative is cheaper because of tax exemptions or tax reductions it is considered as overcompensation and illegal state aid and the compensation has to be adjusted. This has in Sweden occurred for FAME, E5 and E85, but since the cost for biogas is almost twice that of natural gas, it is not likely that the tax exemptions for biogas will be considered as illegal state aid. Among the suggested policy instruments in the FFF inquiry are the price premium model and the quota obligation. The government prepared for a quota obligation but it was later withdrawn because the European Commission considered it as illegal state aid when combined with Sweden´s current CO2 tax. These changes decrease the predictability for potential investors. The actors that we have interviewed propose different policy instruments to promote production of transport fuels from forest biomass: the price premium model, a quota obligation, or a system inspired by the tradable green certificate system. However, more important than the type of policy instrument is that the support is substantial and predictable during the pay back period of the investment. There is a large potential in forest biomass for transport fuel production in Sweden. Different pathways, which result in different transport fuels, compete not only for the feedstock and the end-users, but also for financing, research & development funds, and the policy makers’ attention. This study suggests that: In order to attract investments in forest-derived methane, the vehicle gas market must continue to increase. Increased policy support directed at the demand may be needed. This is because the gasification technology is sensitive to economies of scale and the size of the facilities that have been considered are equivalent to the entire market for upgraded biogas. To invest in such a facility implies too large a risk given the size of the current demand and the uncertainties of the future market. If methane should be able to play an increasingly important role in a future transportation sector, the gasification technology need policy support during a development period. The predictability of policy support is perceived as low. The predictability is more important than the specific type of policy instrument to attract investments. The interviewees in this report suggest the following policy instruments for the support of forest-derived methane: the price premium model, a quota obligation, or a system inspired by the tradable green certificate system. The current low oil price decreases the likelihood for investments. Policy instruments that compensate for the oil price risk are needed, e.g. the price premium model. Swedish industry actors can realize the potential in forest biomass through production of transport fuels if beneficial conditions are given. Such a development does not only contribute to a vehicle fleet independent of fossil fuels but also to regional development. QC 20160229

Forest industry portfolio diversification into transport fuels is important for Swedish climate and energy policy goal achievement, and for Swedish forest industry competitiveness. This paper presents the research background and methodologyfor a project that examines constraints/drivers to the expansion of Swedish forest-derived transport biofuels. It focuses on the interaction of innovation niches with the incumbent socio-technical regime, and the interplay of innovators as they seek to advance their technology systems. The study is on-going and about to enter field interviews using this preparatory work as a base. Literature reviews, interviews and web-survey(s) are to deliver improved understanding of the positions/views and activities of transportation biofuel producers, heavy transport motor platform developers, and incumbent petrochemical industry actors. Theinvestigation addresses a) synergies or competition for resources or political support; b) proponent strategies in forest, biofuel and petrochemical sectors; c) general ‘viability perceptions’ for leading fuel-engine systems/pathways. It is to provide improved knowledge for decision-making to policy makers, industry, and researchers, regarding the structural function of important regime level drivers and constraints – and where policy interventions are a help/hinder to desired progress. This article delivers the theoretical considerations, research approach, and a mapping of research targets., Proceedings of the 23rd European Biomass Conference and Exhibition, 1-4 June 2015, Vienna, Austria, pp. 1610-1620

This thesis deals with some challenges related to the mitigation of climate change and the overall aim is to present and assess different possibilities for the mitigation of climate change by: • Suggesting some measures with a potential to abate net greenhouse gas (GHG) emissions, • Discussing ideas for how decision-makers could tackle some of the encountered obstacles linked to these measures, and • Pointing at some problems with the current Kyoto framework and suggesting modifications of it. The quantification of the net CO2 effect from a specific project, frequently referred to as emissions accounting, is an important tool to evaluate projects and strategies for mitigating climate change. This thesis discusses different emissions accounting methods. It is concluded that no single method ought to be used for generalisation purposes, as many factors may affect the real outcome for different projects. The estimated outcome is extremely dependent on the method chosen and, thus, the suggested approach is to apply a broader perspective than the use of a particular method for strategic decisions. The risk of losing the integrity of the Kyoto Protocol when over-simplified emissions accounting methods are applied for the quantification of emission credits that can be obtained by a country with binding emissions targets for projects executed in a country without binding emission targets is also discussed. Driving forces and obstacles with regard to energy-related co-operations between industries and district heating companies have been studied since they may potentially reduce net GHG emissions. The main conclusion is that favourable techno-economic circumstances are not sufficient for the implementation of a co-operation; other factors like people with the true ambition to co-operate are also necessary. How oxy-fuel combustion for CO2 capture and storage (CCS) purposes may be much more efficiently utilised together with some industrial processes than with power production processes is also discussed. As cost efficiency is relevant for the Kyoto framework, this thesis suggests that CCS performed on CO2 from biomass should be allowed to play on a level playing field with CCS from fossil sources, as the outcome for the atmosphere is independent of the origin of the CO2. QC 20101015

Synthetic fuels based on electricity, water, and carbon dioxide (CO2) may be necessary to cover the fuel demand in a sustainable transport sector based on renewable energy sources. The aim of this paper is to compare hydrogen, methane, methanol and diesel produced in this way. The main parameters for the analysis are well to wheel energy efficiency and costs, and the fuels are analysed in a Swedish context. The results indicate that methane and diesel could have the potential to be cost competitive in the near term, at least if common incentivesfor renewable transportation fuels are applied. Moreover, that hydrogen is the best option in terms of well to wheel energy efficiency, and that it in the longer term also may be cost competitive to the other fuels.