Biomass action plan for Scotland

8. BIOMASS SUPPLY

INTRODUCTION

8.1 In Europe, supply chains are well-developed. Some countries have developed standards, and the EU has recently published draft standards to facilitate trade, develop markets and increase consumer confidence. In Scotland there is a need for improved assessments of resource and capacity building and this has been identified as a barrier to growth and development of the sector.

FORESTRY

8.2 Forestry is already an extremely important part of Scotland's economy - forests currently cover around 17% of our land area and produce around 7 million m3 of timber a year, with this production set to increase over the coming decade.

8.3 Climate change is one of 7 key themes identified in the recently published Scottish Forestry Strategy ( SFS). The SFS identifies the key role that forestry can play in mitigating climate change through development of a strong biomass market. A large number of forests are located in rural areas where using wood as a local source of energy can provide new local markets for timber, generate sustainable employment as well as reducing timber haulage distances. Energy crops (such as short rotation coppice or short rotation forestry) can also provide local opportunities for rural diversification.

8.4 Between 2001 and 2005, 38,000 hectares of new planting has been achieved. Forestry Commission Scotland is currently looking at ways to boost these planting rates.

8.5 Wood can be used as a fuel simply as logs but more commonly it is now processed into a range of fuel products. The greater the uniformity and energy density of the product, the higher its value. Woodfuel products include logs, bales of residues from the forest; wood chip from sawmills or arboriculture, and pellets and briquettes made from sawdust. The drier the product the greater the energy content and the more value it has as a fuel product. Moisture content can vary from freshly felled wood at 50-60%; air dried at around 20-30% and oven dried at less than 5%.

8.6 The most recent production forecast for Scotland's forests estimated available volumes of 6.9 million m ³, peaking at 8.9 million m ³ in 2017-2021. Whilst much of this material is currently contracted to other markets, there are also other underused materials, such as forest residues from brash which could be available as biomass. Therefore it is currently estimated that the total potentially available volume of, so called, virgin biomass ( i.e. wood plus brash) taking into account other markets is approximately 323,000 odt (roughly 650,000 m ³) however, this volume estimate is subject to constant revision depending on new forecast data and price changes due to the relative demand for this material from the different wood using sectors. There is also a need to ensure that the level of residue removal does not lead to a loss of long term fertility.

8.7 The timber industry has a strong industrial presence in Scotland and a substantial amount of sawmill conversion products are also currently used for industrial on-site heat production. Much of this product has an existing market in the form of industries such as the wood panel sector. However, it is estimated that some might be available for energy production.

8.8 Short rotation coppice ( SRC) and short rotation forestry ( SRF) have been slow to expand in Scotland, with only around 200 ha planted to date, spread geographically from the Borders to Orkney. Proposals for around 5 times that area are currently in the pipeline, although it will be 3 to 5 years before a harvest can be achieved. The currently available harvest is estimated at around 600 odt. Although limited data is available on Short Rotation Forestry at present, Forest Research are developing a programme to look at the potential for developing this resource.

8.9 SEERAD's Analysis of Greenhouse Gas Life Cycle Emissions, Air Pollution Impacts and Economics of Biomass estimates that around 50,000 to 90,0000 ha of land would be suitable for SRC planting, although uptake will depend on incentives and relative values of crops.

8.10 Given the restricted availability of suitable land in Scotland for growing certain bespoke energy crops and the fact that, in some instances, crops could compete for the same ground there is a clearly established need to undertake a comparative analysis of the suitability, GHG impacts and economic benefits of specific biomass and biofuel crops for available sites.

Financial Support

8.11 The Scottish Forestry Grants Scheme ( SFGS), introduced in 2000, provides grants for the planting, restructuring and management of existing woodlands. Most grants available under the SFGS closed in August 2006, and will be superseded by new Land Management Contracts ( LMCs) in 2007. Under the LMCs forestry options will be available alongside other generic land management and agricultural measures.

8.12 On 12 September 2005 the Scottish Executive's grant aid for farmers to establish SRC willow or poplar as an energy crop was brought into line with the equivalent grant in England. The new grant now pays an all-inclusive, flat rate of £1,000 a hectare. Payments will be made to farmers who have a supply contract with an end user, such as a power generating company.

AGRICULTURE

8.13 The agricultural sector is experiencing a high level of interest in the production of energy crops as an alternative market outlet for farmers who can utilise existing agronomy skills. In the medium term, uptake of energy crops has so far been limited but there is significant potential for increase in SRC on agricultural land as demand increases, as discussed above.

8.14 Oil Seed Rape ( OSR) will be the major biofuel feedstock crop grown in Scotland. It is most appropriate for biodiesel production in Scotland. It is already widely grown and yields are good. A total area of c. 35,000 ha of OSR was planted in Scotland in 2005 producing 124,000 tonnes, of which 9,000 ha was planted as non-food set aside and energy crop. However, it is a relatively expensive feedstock for biodiesel production. Used vegetable oil is the cheapest feedstock at present, but supplies are limited. As a consequence, little OSR is currently used to produce biodiesel in the UK.

8.15 Market confidence is building with recent announcement of two major biofuel processing plants in Scotland at Grangemouth and Rosyth. RTFO 5% biofuel inclusion by 2010 will continue demand.

8.16 Other agricultural material currently used for bioenergy includes animal tallow used in the Argent biodiesel production plant in Motherwell. A biomass power station using poultry litter has also been operational for several years at Westfield in Fife. There is also some interest in the use of agricultural by-products such as straw, however, as there is already a significant market in Scotland for straw as animal bedding and feed and it seems unlikely at present that straw would be a competitive feedstock material for combustion to produce energy. In the long term, second generation biofuels derived from straw may be another potential market. Other Scottish companies are progressing the installation of energy recovery facilities that use processed animal by-products, such as meat and bone meal, as the primary feedstock.

8.17 The Executive supports the sector in a number of ways. A Forward Strategy for Agriculture (Scotland Executive, 2006) gives a commitment to make business information on emerging and other opportunities (including energy crops and biomass) widely available to farm businesses.

8.18 The future of biomass supply from the agricultural sector is likely to follow a pattern of development where:

the main drivers will come from the market and will require a great deal of effort in building and maintaining healthy and profitable supply chains;

• the sector will need to look at different scales of production to encourage energy self sufficiency;
• developments will need to take a regional view;
• production of energy crops is more suited to the arable areas of Scotland and the reduction in transport costs by having the processing capacity within Scotland will be important;
• support for small scale (on farm) production of energy through the new LMCs.

Financial support

8.19 Aid is available to farmers through the Aid for Energy Crops for areas sown under energy crops at a flat rate of â'¬45 per hectare. Any agricultural raw materials (except sugar beet) may be grown on areas qualifying for aid provided that they are intended primarily for use in the manufacture of either biofuels or electric and thermal energy produced from biomass. The current position in Scotland is that the crop grown is exclusively Oil Seed Rape destined for biofuel manufacture.

WASTE

8.20 It is widely recognised that despite our best efforts to recycle as much waste as possible, there will always be some residual waste. All waste management technologies have some impact on climate change. Recycling materials generally uses far less energy (therefore emitting less greenhouse gases) than the extraction and processing of virgin materials and is ahead of incineration or landfill in the waste hierarchy. The National Waste Plan advocates that only residual waste i.e. that which is left after as much recyclable / compostable material as possible is extracted should be used for energy recovery.

8.21 There are an estimated 4.3 to 5.2 million tonnes of waste biomass generated each year in Scotland. Current developments are principally aimed at the domestic sector (subject to recycling and landfill diversion targets), accounting for around 0.8 to 1.6 million tonnes, leaving commercial and industrial sectors (3.6 to 4.4 million tonnes) largely underdeveloped.

8.22 The term Thermal Treatment can apply to a number of different practices e.g. recycling of construction and demolition waste wood as a fuel source, incineration with energy recovery, anaerobic digestion, pyrolysis, gasification, landfill gas capture and co-combustion of waste derived fuels in power plants and industrial facilities. Thermal treatment is widely practiced in Europe for the treatment of residual wastes. In Scotland SEPA has published Thermal Treatment Guidelines which indicate that for MSW thermal treatment is a viable option only where it forms part of an integrated approach and is used in such a way as not to impede waste prevention, re-use and recycling. The guidelines also offer strong support for the efficient capture of the energy embedded in waste. Any new thermal treatment facilities would be expected to be as efficient as possible e.g. Combined Heat and Power. Thermal treatment facilities for waste are regulated under the Waste Incineration (Scotland) Regulations 2003.

8.23 The type of feedstock used for thermal treatment facilities varies and therefore so do the CO2 emissions and calorific values. Waste may often include a percentage of biomass i.e. plant and animal matter but may also include non-renewable elements such as plastics. Under the Renewables Obligation (Scotland) Order 2006 only waste containing 90% or more biomass will be eligible to receive Renewable Obligation Certificates. Exceptions to this rule include the biomass element of waste treated by advanced conversion technologies such as gasification or in combined heat and power plants. Mechanical and Biological Treatment ( MBT) processes can produce refuse derived fuel ( RDF) but a clear market for rdf is yet to emerge.

8.24 SEPA Project R50090/PUR Analysis Of Current Waste Biomass Arising And Treatment Methodologies In Scotland details the potential for expansion. SEPA are currently commissioning two further studies, the first to evaluate the energy potential in waste biomass in Scotland and the second, part funded by SNIFFER, to review the available policy instruments to maximise the recovery of value from waste biomass contained in residual commercial and industrial waste streams.

8.25 The current infrastructure for the production of energy from waste includes:

• 77,844 tonnes (2.3%) of municipal waste was incinerated in Scotland in 2005-06 at two plants - one in Shetland and one in Dundee. The Shetland plant serves a district heating scheme but does not generate any electricity. The Dundee plant generates electricity for the national grid although plans are underway to investigate the potential for heat use from this facility.
• Using the Strategic Waste Fund, Comhairle nan Eilean Siar (Western Isles Council) has recently built an Anaerobic Digestion plant which treats source separated household bio-waste. This produces a bio-gas which fuels a 290kW Combined Heat and Power engine. One is also under construction in Moray which will use animal waste.
• Seven on-farm digesters dealing with cattle slurries as part of diffuse pollution reduction. All generate biogas for internal use (not connected to the grid).
• Over 90 composting plants mostly treating green waste but increasingly animal and food waste are being considered. Biomass treatment by composting currently is in the order of 500,000 tonnes from all sectors (domestic, commercial and industrial).
• Scottish Power are currently in the process of developing a 21.2 MWe waste incineration directive compliant biomass power station at Longannet which will come into full commercial operation in 2010. Once operational this plant will require approximately 135,000 tonnes of biomass per annum comprising approximately 60,000 tonnes of wood waste ( e.g. chemically treated timber, plywood, chipboard, demolition waste etc.) and 75,000 tonnes of sewage sludge pellets.

Financial support

8.26 The Strategic Waste Fund ( SWF) is the main source of funding for local authorities wanting to develop infrastructure to treat residual waste. SWF funding is only available for municipal solid waste treatment in line with the National Waste Plan. Bids (Strategic Outline Cases) to the Strategic Waste Fund have been received from local authorities for the treatment of residual waste. Many of these bids include proposals for Energy from Waste facilities and these are currently being considered by Ministers. The Waste and Resources Action Programme ( www.wrap.org.uk) can advise on business opportunities arising from recycling and composting, including occasional capital grant schemes to support recycling and composting infrastructure, which can include support for Anaerobic Digestion.

SUPPLY CHAIN

8.27 Local small-scale woodfuel supply chains are well-developed in a number of areas, particularly in the Highlands & Islands where assistance has been available through the Highlands & Islands Woodfuel Development Programme. Supply chain development has also been supported by grant awards through the SFGS Developing Farm Woodland Energy and DEFRA Bioenergy Infrastructure Scheme. Through these schemes, funding of over £750,000 has been awarded to 18 businesses for supply chain infrastructure to local woodfuel markets and to large-scale CHP and power projects.

8.28 The new Scottish Biomass Support Scheme will extend this funding support for further development of the supply chain for biomass across Scotland.

8.29 It is vitally important for customer confidence to have fuel which is fit for purpose and delivered to a quality standard and specification. This has been demonstrated time and time again internationally. Clear technical specifications are needed which can be incorporated into supply contracts. The European Union has developed specifications and standards: CEN TC335 for solid biofuels and CEN TC343 for solid recovered fuels.

8.30 There is a need to build capacity in the supply chain and the Executive is supporting skills development through the IGNITE training programme run by the Rural Development Initiative. In 2006, the Programme has assisted around 50 businesses to gain accredited training in woodfuel. However there is a role for industry to lead on accreditation.

INFORMATION PROVISION

8.31 Forestry Commission Scotland ( FCS) publishes a wide range of information for growers of biomass. The Scottish Forestry Strategy has laid out a vision for the future of Scotland's forests and biomass production is an important component of that vision.

8.32 FCS has a network of Woodfuel Information Officers providing advice and support to business, funded in partnership with the Scottish Executive, EU, Scottish Enterprise and Scottish Borders Woodland Partnership. FCS has also developed the Woodenergy website ( www.usewoodfuel.co.uk) to make information on woodfuel widely available. In addition, numerous seminars and workshops have been held across Scotland to promote biomass to a range of audiences.

8.33 FCS is undertaking a variety of research activities to improve data on biomass including an annual woodfuel usage survey, a market intelligence briefing on biofuels and a report to assess current installations. FCS also liaises at a UK level to promote sharing experiences and dissemination of best practice.

8.34 The Executive is committed through its Forward Strategy for Scottish Agriculture to provide farm businesses with information on emerging opportunities for energy crops and biomass. FCS is also working with the National Farmers Union Scotland to promote fuel biomass within the farming community.

8.35 The forestry and agricultural industries also have a key role to play in developing the biomass sector. The Scottish Forest Industries Cluster has developed a range of publications and briefings on woodenergy and industry groups such as Scottish Renewables and CONFOR are engaging in market development.

8.36 WRAP provides advice, which can include financial support on anaerobic digestion and the use of compost to grow energy crops such as short rotation coppice.

SUMMARY

Development of the biomass sector will require an improved assessment of the available resource. FCS are looking at ways to boost planting rates and how to utilise underused materials from forest residues to facilitate the development of the woodfuel sector. Significant potential exists to increase short rotation coppice on agricultural land to meet growing demand and provide an alternative market outlet for farmers. Alongside that, market confidence is building for oil seed rape, assisted by the support announced for biofuel processing plants and implementation of the RTFO. Given the existing potential of Scotland's forest, this is a key area to focus on in developing the biomass sector. In addition, there are significant biomass resources in the agricultural sector, such as energy crops and tallow, and also in the waste sector. Ongoing financial support, supply chain development and information provision are critical to the development of the biomass resource across all these sectors.

ACTION TABLE

Lead Department	Action	Timing	Indicators/Outputs
ERAD - Agriculture	Continue to provide targeted grant aid for the establishment and management of bespoke energy crops	2007	Implementation of Land Management Contracts
ETLLD - Renewables	Ensure biomass forms part of a Renewable Heat Strategy	2007	Renewable Heat Strategy
Forestry Commission Scotland	Support biomass use for renewable energy by facilitating development of an efficient and reliable wood fuel supply chain	ongoing	Number of biomass supply businesses Volume of biomass
Forestry Commission Scotland	Encourage increased wood fuel usage to help achieve the Climate Change Programme targets	ongoing	Volume of biomass used Woodfuel Usage
Forestry Commission Scotland	Continue to monitor woodfuel usage	ongoing	Woodfuel Usage Survey
ERAD - Agriculture	Provide advice and information to landowners on planting, growing, managing and marketing energy crops	Jan 07	Study into commercial viability of alternative crops and biomass
ERAD - Waste	Strategic Waste Fund - evaluation of Strategic Outline Cases	ongoing	Infrastructure for treating residual and biodegradable municipal waste
ERAD - Waste	Offer support via WRAP Organics Capital Support Programme for Scotland, for composting and anaerobic digestion	closing date for capital programme 6 Feb 07	Recycling and composting infrastructure (including anaerobic digestion for processing biodegradable waste)
ERAD - Waste	Encourage, through the framework of the National Waste Plan, partnership working, particularly between neighbouring local authorities, and/or others, to jointly develop appropriate thermal treatment plants where this has been identified as Best Practicable Environmental Option ( BPEO)	ongoing	Increase in thermal treatment plans covering more that one local authority area
SEPA	Evaluate the energy potential in waste biomass in Scotland and review available policy instruments to maximise the recovery of value from waste biomass in commercial and industrial waste streams.	June 2007	Report on energy potential of waste biomass and policy options for the management of residual commercial and industrial wastes