Greenhouse gas balances and new business opportunities for biomass-based transportation fuels and agrobiomass in Finland

The aim of the project was to assess energy and greenhouse gas balances as well as greenhouse gas emission reduction costs for biomass-based fuels used in transportation and combined heat and power production (CHP) compared to selected reference fuels. New business opportunities were identified based on the results. Both commercial technologies and technologies under development were assessed. The most suitable large-scale technologies for Finnish conditions were selected for the evaluation. Technologies utilising field crops and forest biomass as raw materials were evaluated. The main option's were barley-based ethanol, biodiesel (RME) from turnip rape, forest residue and reed canary grass-derived synthetic fuels, and forest residues and reed canary grass as a fuel for CHP production. The whole utilisation chain from fuel production to end-use was evaluated. The overall energy input per output ratio was less than one for all assessed transportation biofuel chains, which means that more energy was produced than consumed. This energy consumption per energy content of the fuels was, however, 3 to 5 fold compared to fossil fuel chains. Hence, the consumption of primary energy cannot be reduced by substituting fossil fuels by biofuels. Regardless, the consumption of petroleum based energy can be remarkably reduced as typically only minor part of energy consumed in biofuel production is based on crude oil. The results indicated that the production and use of barley-based ethanol or biodiesel from turnip rape does not necessarily reduce greenhouse gas emissions, but can on the contrary increase the greenhouse gas emissions compared to fossil-based reference fuels, when the whole production and utilisation chain is considered. Use of fertilizers is significant compared to the energy content of the barley and turnip rape yield in Finland. Production and use of nitrogen fertilizers cause emissions of nitrous oxide, which may be very significant. The cultivation of uncultivated or set-aside lands to produce barley-based ethanol or biodiesel from turnip rape may increase the absolute emissions of greenhouse gases, regardless of the fact that fossil fuels are replaced by the produced fuels. Greenhouse gas emissions in absolute terms can be reduced by optimising cultivation chains producing currently surplus yield. The achievable emission reduction would, however, probably be larger by reducing surplus cultivation than producing ethanol or biodiesel. Utilisation of straw in energy production to substitute emission intensive fuels and measures to increase soil carbon balance and reduce nitrous oxide emissions could remarkably decrease greenhouse gas emissions of cereal crop chains. Second generation biofuels produced using forestry residues or reed canary grass as raw materials seem to be significantly more favourable in reducing greenhouse gases cost-effectively. It is possible to reduce greenhouse gas emissions by up to 70-80% compared to fossil fuels when both production and utilisation chains are considered. The more favourable result is mainly due to significantly lower fertilization demand per energy content of particular raw materials compared to cereal crops. Production of transportation biofuels is currently 30-100% more expensive than production of fossil fuels. The emission reduction costs for the second generation biofuels under development were assessed to vary from 30 to 100 is a member of the set of /t CO2-eq with current crude oil price level. An increase in the crude oil price results in a strong decrease in emission reduction costs. However, mitigation of greenhouse gases in the energy sector can be implemented more cost-effectively than in transportation sector.