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Sweden's Bioenergy Success Story

Sweden's Bioenergy Pyrogrot demonstration project was recently awarded part of a €1.2 billion award from the EU's New Entrants' Reserve (NER)300 program, which acts as a vehicle for demonstrating environmentally safe carbon capture and storage (CCS) and new European renewable energy technologies at a pre-commercial scale. The projects will be co-financed with revenues obtained from the sale of 200 million emission allowances from the EU Emissions Trading System (ETS).

Pyrogrot will use forest residues as feedstock, which will produce 160,000 tons per year of pyrolysis oil with the energy content estimated at about 750 GWh. The plant will operate at an input processing capacity of 720 tons a day of dry biomass.

Forest residue is the leading bioenergy source in Sweden, and bioenergy is the nation’s leading energy source. Since the 1970s when 70-80 percent of Sweden’s energy mix came from imported oil, the country has transformed its energy system to the point where oil is almost entirely a transport fuel, while bioenergy is used in district heating, industry and electricity production. For nations whose bioenergy industry is emerging or struggling with policy issues, Sweden is an example of how to get it right.

Svebio, the Swedish bioenergy industry association, has issued a short but fact-packed book entitled Bioenergy: The Swedish Experience – how bioenergy became the largest energy source in Sweden - authored by Kjell Andersson, Svebio’s communications director - which goes into detail on each of the bioenergy sectors. It makes an interesting read, showing how the interaction between abundant natural resources, high oil prices, public concern for the environment and strong policy support combined to radically change the nation’s energy mix over a relatively short period.

Contributing factors

Swedish bioenergy use has grown from 40 TWh/year in the 1970s to around 140 TWh in 2012, according to Svebio. Bioenergy steamed past oil in 2009 to become the leading energy source for the nation. And since 2009 bioenergy has made up more of Sweden’s energy mix than hydropower and nuclear power combined. Bioenergy was the leading factor in Sweden’s 9 percent decrease in greenhouse gases between 1990 and 2010, while GNP increased by 50 percent.

According to Svebio, the main reasons for the Swedish bioenergy sector’s phenomenal growth are broad political support and strong incentives such as the CO2 tax introduced in 1991, the green electricity certificates introduced in 2003, and tax exemptions for transport biofuels.

Andersson says bioenergy’s success is also due to Sweden’s long-standing tradition of using its natural forest resources – the nation has more forests than any other EU member state – while also protecting and developing these resources. Sweden’s total forest stock has increased each year despite the rapid expansion in biomass use for energy.

The history of Sweden’s biomass development can be seen in terms of two significant factors: rising prices for imported oil and the nation’s debate over nuclear power. From the 1973 oil crisis, which coincided with an unusually cold Swedish winter, to 1979 when imported oil prices jumped again and the Three Mile Island nuclear accident happened in the U.S., to a 1980 Swedish referendum on nuclear power calling for a phase-out by 2010, the nation has been seeking new and safe energy sources. National research into renewable energy was initiated in the late 1970s.

Heating oil

The most significant jump in Sweden’s use of biofuels arose from the 1991 adoption of a carbon tax across industry, the service sector and households, which raised the cost of fossil fuels and made renewables competitive. Over a number of years the tax was gradually increased until it reached a level where it doubled the price of heating oil, driving oil out of the heating market in both industrial plants and home boilers.

By the end of the 1970s heating oil made up 90 percent of the fuel in district heating plants; by 2010 fossil fuel was only 2 percent of total fuel use in district heating. The plants had largely switched to biomass, which made up 70 percent of district heating fuel in 2010.

In the 1990s combined heat and power (CHP) plants received investment grants to use biomass in electricity production, and in 2003 the green certificate system was introduced to support investment in new renewable power plants, leading to a rapid expansion of bioelectricity production.

Biofuel

Contributing factors to Sweden's biofuel success include its large agricultural surplus and pulp factories that produce ethanol as a by-product. Swedish cars use high-blend biofuels such as E85, which can contain up to 85 percent ethanol, and biogas. Since 2009 all fuel stations have been required to provide an alternative fuel option.

Sweden also imports large quantities of ethanol, mainly from Brazil. However, a broad section of the Swedish public now perceive the ethanol industry as a direct contributor to hunger and the destruction of rainforests. In response to consumer concerns, in 2009 a group of Brazilian ethanol producers signed a deal with Swedish importers to export certified sustainable ethanol.

Public procurement has been key to Sweden's adoption of biofuels. Cities feature ethanol buses, and at the end of 2011 Sweden had more than 200,000 flexi-fuel cars on its roads. Swedish car buyers receive a rebate of SEK10,000 (US$1560) for buying a green car.

Biomass

Biomass for heating accounts for more than half of all space heating in Sweden's housing and service sectors. The predominant type is forest biomass. There are also around 100,000 small-scale pellet heating systems operating in Sweden.

According to Svebio, there are plans for about 4-5 TWh in expanded Swedish biopower production over the next five years: 1 TWh in the forest industry and the rest in district heating. Total biopower production is expected to grow from 12 to 15 TWh.

Biogas, while still a small sector, is growing, and has considerable political support. Total biogas production is around 1.5 TWh per year, and the Swedish Energy Agency says the potential for more biogas production from wet residues and wastes is 3-4 TWh/year.

A qualified success

While Sweden's bioenergy revolution may be seen as a model for other nations, it is arguably due largely to advantages other nations may not have. From its abundant resources and high-growth but non-energy-intensive industry to its small area and population, Sweden is naturally suited to being a big bioenergy market.

But other nations with good biomass resources can learn from Sweden's policies. A "green tax switch" in 2001-2006 raised environmental taxes while compensating by lowering other taxes such as income and labor. Swedes are concerned with the environment as well as low heating, transport and industrial fuel prices and energy independence.

Bioenergy: The Swedish Experience - how bioenergy became the largest energy source in Sweden is available from Svebio at www.svebio.se

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