1. EXECUTIVE SUMMARY
1.1 The aim of the Biomass Action Plan is to set out a coordinated programme for the development of the biomass sector in Scotland. It summarises the various existing activities, and provides a framework under which they will be coordinated and also supplemented by further actions.
1.2 The Scottish Biomass Action Plan has been informed by the EU Biomass Action Plan, and shares its aims of promoting economic growth, commitment to renewables and diversification of supply.
1.3 Studies looking at the potential for electricity generation have suggested that Scotland's renewable resources could sustain 60GWe of generating capacity, of which 450 MWe could be derived from biomass. The Scottish sector is starting to grow, with major developments such as E.ON in Lockerbie ( 44 MWe), Balcas in Invergordon ( 8 MWe) and UPM in Irvine ( 25 MWe) all under way now, supported by public funds. The number of smaller heat-only installations is also increasing. But there is still huge potential to develop the market share of biomass and maximise its contribution to the Scottish Climate Change Programme. This development must take account of the range of biomass resources - not only the forestry-derived fuel highlighted in the FREDS (Forum for Renewable Energy Development Scotland) report on biomass, but also from agriculture and waste. Similarly, the demand side comprises not only electricity use, but heat and transport.
1.4 Heat energy can be produced very efficiently from biomass and deliver significant carbon savings, and indeed over half of the renewable heat supplied to homes and buildings across Europe is from biomass. But in Scotland, while a third of our primary energy consumption is for heat, only a fraction of this comes from biomass. The main limiting factors to the further expansion of this sector are equipment capital costs and the availability of trained professionals and accredited installers, while the domestic sector has had an additional barrier of lack of local pellet production. We are or will be addressing these issues.
1.5 The Executive will produce a Renewable Heat Strategy, encompassing bioenergy and other technologies, by the end of 2007, including targets for production of renewable heat up to 2020. In addition, action is currently being taken on a number of fronts to develop biomass heat. This includes:
- Awareness raising and information provision, including web-based advice and the networks of Forestry Commission Scotland Woodfuel Information Officers, and SCHRI Development Officers. The sector itself provides a focus for industry discussion through the Scottish Renewables Forum Bioenergy Network, as well as through regional initiatives. Accreditation of installers is encouraged through various measures, but there is clearly a need to increase this activity;
- Regulation and planning, notably the update of Scottish Planning Policy paper SPP6. This guidance outlines a strategic framework for renewables development, and encourages the identification of sites for new biomass plants through the development plan process;
- Public procurement. Exemplar projects can already be found across the public sector, but more will need to be done to encourage investor confidence.
- Financial support through the Scottish Community & Householder Renewables Initiative ( SCHRI) which has to date assisted 20 woodfuel-fired installations at community scale, and 70 household installations. Other schemes include the Highlands and Islands Woodfuel Development Programme, the Carbon Trust's Biomass Heat Acceleration Project, the Renewables Fuel Poverty Pilot, Regional Selective Assistance, demonstrator projects, and the new Scottish Biomass Support Scheme.
1.6 Electricity from biomass is significant and contributes to the Executive's long term targets for generation from renewables. Indeed electricity generation through co-firing is currently the largest user of biomass energy in Scotland, although the feedstock is principally imported material in the form of pellets. Electricity from biomass is well supported through a variety of mechanisms. The main source of financial support is the Renewables Obligation (Scotland) and the current review of the Obligation will seek to increase biomass use. The Executive recognises the benefits of generating heat and power together and is keen to encourage the further development of CHP, where we are already performing better than the UK average.
1.7 The transport biofuels industry in the UK as a whole is still very young, but large-scale production is established and increasing. The main types of biofuel in use in the transport sector are liquid biodiesel and liquid bioethanol, with a much smaller market for biogas.
- The key incentive for growth in the biofuels sector is the Renewables Transport Fuels Obligation ( RTFO) with the UK target for transport biofuel sales of 5% by 2010. The Scottish Executive has adopted this target and supports the introduction of the RTFO.
- Regional Selective Assistance, the Executive's main scheme of financial assistance to create and safeguard employment in the Assisted Areas of Scotland, supported the establishment of the UK's first large scale biodiesel production facility using vegetable oils and animal tallow (Argent Energy), and will help to fund one of Europe's largest biodiesel production facilities ( INEOS) at Grangemouth - with the capacity to meet some 35% of the UK's biodiesel needs.
- Support for biofuel crops will be available under the Land Management Contracts to be implemented as part of the Rural Development Plan for Scotland in the course of 2007.
- On procurement, the public sector is leading the way through the Forestry Commission's biofuels programme which now has 120 vehicles running on biofuels blends.
1.8 Biomass supply is a key issue in Scotland. In Europe, supply chains are well-developed. But here there is a need for improved assessment of available and future resource, and capacity building; this has been identified as a barrier to growth and development of the sector:
- In the forestry sector, Forestry Commission Scotland are looking at ways to boost supply to meet the anticipated demand in the burgeoning biomass sector, with a particular focus on underused materials such as forest residues from brash. Care has to be taken not to displace existing commercial markets, and signposting developers to private sector supply will be key to meeting future demand. Short rotation coppice ( SRC) and short rotation forestry ( SRF) have been slow to expand in Scotland but Forest Research will be addressing this issue in forthcoming research. Financial support is available to support both conventional forestry planting and SRC.
- There is a high level of interest from the farming sector in the production of energy crops, with oil seed rape being the major biofuel feedstock grown in Scotland. Market confidence should grow further with the announcement of two major biodiesel processing plants in Scotland - at Grangemouth (above) and Rosyth. While there is financial support available to farmers to grow energy crops (through the Aid for Energy Crops scheme), the main drivers for future growth are expected to be market-led.
- The waste sector is also an important element of supply. Thermal treatment facilities cover a range of processes including incineration with energy recovery, anaerobic digestion, pyrolysis, gasification, and landfill gas capture. Under the Renewable Obligation (Scotland), 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 or in CHP plants.) Financial support is focussed on municipal solid waste through the Strategic Waste Fund provided to local authorities.
1.9 Maintaining the high quality of our environment is an important element in the development of a sustainable biomass industry, with potential impacts on soil and water quality, air quality, biodiversity, landscape and GHG emissions. Impacts on the environment from the development of the raw material and use of biomass for energy will be mitigated through applying best practice in land management, meeting air quality standards and implementing planning regulations.
1.10 In conclusion, the Biomass Action Plan for Scotland provides a comprehensive picture of the activity being undertaken to develop the sector here and sets out a framework for future policy and support. Key strategic drivers are already in place across the heat, electricity, and transport sectors. On the heat side in particular, the new Scottish Biomass Support Scheme and the publication by the end of 2007 of a Renewable Heat Strategy for Scotland will be important milestones for development.
1.11 The coordination of biomass policy across the Executive is led by the Renewables and Consents Policy Unit, part of the Energy and Telecommunications Division within the Enterprise, Transport and Lifelong Learning Department. The Interdepartmental Bioenergy Group, comprising relevant Executive policy areas, will oversee the implementation of the Plan and ensure that biomass policy is developed in a way that ensures all diverse interests are considered. However, there is a key role for both public authorities and business in progressing the overall aims of the plan. The Executive has made a commitment to work closely with Scottish stakeholders to ensure the Plan continues to be relevant and provides the strategic framework for realising the full potential that a vibrant biomass sector can bring to Scotland.