ELECTRICITY PRODUCTION FROM BIOMASS IN EUROPE: TECHNICAL POTENTIAL DEMAND AND CO2 ABATEMENT

We investigate the question of biomass usage in European electricity, and interactions with climate policy and the EU ETS. We give an overview of this topic, with a focus on technological- and policy-related questions. We estimate the potential biomass demand from existing power plants, and we match our estimates with the potential biomass supply in Europe. Furthermore, we derive the CO2 abatement associated with the co-firing opportunities in coal plants, and we compute the biomass and CO2 breakeven prices for co-firing. We find that the potential biomass demand from electricity may be higher than the European production, and that biomass-based electricity remains profitable with high biomass prices, when the carbon price is high enough. This aims to gain insights on how biomass market is impacted by the EU ETS and others climate policies, which is a question of high relevance for policy-makers, researchers and practitioners in fields of energy, forestry, agriculture and climate.