Karin Ericsson

Bioenergy policy and market development in Finland and Sweden

Abstract The use of biomass in Finland and Sweden has steadily increased over the past 25 years, up to approximately 20% of the primary energy supply in 2001. In both countries most biomass originates from forests. Forest biomass is now an integral part of modern energy systems, although primarily in industry and in the heating sector. For example, biomass accounts for 7.9% and 53% of the fuel mix in district heating in Finland and Sweden, respectively. The general energy policy of both countries has supported biomass for energy over the entire period, although specific policies have changed with time. Research, development and demonstration has been continuously supported, and some subsidy schemes have been applied, in particular, for district heating systems (DHS) and combined heat and power. Heavy taxation of competing fossil fuels seems to have been the most effective policy instrument, although this has been directed mainly at the heat and transportation fuel markets. Electricity taxes are imposed on consumption (industry is largely exempt), and do not discriminate significantly between the sources of electricity. Starting in 2003, Sweden will have a quota-based system, a renewable portfolio standard, which is expected to increase biomass-based electricity production. Both countries possess vast and not fully exploited biomass resources in the form of forests, and have a history of rational and large-scale forestry. Strong actors exist both with regard to forest ownership and the industrial processing of forest products. The user side, in particular, represented by DHS, can also be characterised by strong and professional management. Over time, structures have developed that facilitate an increased use of biomass for energy, for example, the forest industry infrastructure and extensive district heating. Actors within these structures have had the ability to react to policies, resulting in a stable growth in biomass use.

International biofuel trade: A study of the Swedish import

Following the development of large-scale use of biomass energy in the EU, international biofuel trade is a plausible scenario and something that is already taking place in Northern Europe. This paper focuses on Swedish biofuel imports, both direct and indirect imports, the latter which derive from the fact that part of the imported pulpwood and timber end up as fuel. The objective is to describe the biomass import flows, the actors involved and analyse the fundamental drivers for the trade flows. The rapid expansion of biomass energy, that has taken place in district heating since the early 1990s in Sweden, has been met partly by imports. The direct biofuel import was estimated to 18 PJ for 2000, which corresponded to 26% of the biofuel supply in district heating. The total indirect biofuel import was estimated to 9 PJ of which 5.5 PJ is consumed in the district heating sector. Sawmill wood chips, decay-damaged stemwood and pellets are imported from Estonia and Latvia, whereas used wood and solid recovered fuels are imported from Germany and the Netherlands. Tall oil and pellets are imported from North America. Key factors related to the Swedish biofuel import are analysed, both from the view of Swedish demand and from the view of supply in the Baltic countries as well as supply from Germany or the Netherlands. National differences in energy policy are perhaps the most important driving force behind the seemingly strange trade flows. Structures in the different national energy systems are also discussed as well as the transformation process that has taken place in the forest sector in the Baltic countries. (Less)

Seeing the wood for the trees: 25 years of renewable energy policy in Sweden

Sweden has a long-standing political commitment to the development of renewable energy, although the driving forces have changed over time. The focus has shifted from reducing dependence on oil to phasing out nuclear power, and, in the past 10 years, to reducing greenhouse gas emissions. In this article we review Swedish renewable energy policy since 1975, focusing on how it has influenced the development of wind power and the use of biomass for heat and electricity production. Sweden is endowed with rich renewable energy sources. The wind and bioenergy potential alone, about 100-200 TWh and 700 PJ, respectively, each correspond to more than one-third of present primary energy use. In 2001, about 500 GWh of wind power was produced and 336 PJ of biomass for energy was used. Renewable energy policy during the 1970s and 1980s was mainly expressed as strong efforts in technology research, development and demonstration. This supply-led attempt to transform the energy system had little impact on the Swedish energy balance. Market development took off mainly during the 1990s when taxes and subsidies created favourable economic conditions for new investments and fuel-switching. This underlines the importance of creating demand-pull policies. In the case of wind, Sweden still has only about one-fifth as much installed capacity as Denmark. The relatively slow development of wind power can be ascribed to the lack of strong commitment, continuity, and a clear strategy and approach in Swedish government efforts for the establishment and expansion of wind power – a situation that has been exacerbated by relatively low electricity prices. In contrast, the use of biomass for energy increased substantially during the 1990s, specifically wood fuels for district-heating which increased from 13 PJ in 1990 to 65 PJ in 2001. A system with high carbon dioxide taxes, 28 euro/t CO 2 in 1991 and 84 euro/t CO 2 in 2003, for fuels for heating but no taxes on fuels for electricity production created strong incentives for fuel-switching in district-heating, albeit not for biomass-based cogeneration. The development was facilitated by existing infrastructures in the forestry and energy sectors, notably the district-heating systems. Professional actors in these sectors were able to respond constructively to changes in relative fuel prices. A quota-based renewable electricity certificates system was introduced in 2003 to replace earlier subsidy schemes. In the next few years it is expected to stimulate mainly the development of biomass-based cogeneration.