Commission staff working document - Summary of the impact assessment Accompanying document to the Report from the Commission to the Council and the European Parliament on sustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling COM(2010) 11 final SEC(2010) 65 final
Date: 2010-02-25
Institutions: European Commission
Subjects: bioenergy, electrical energy, energy efficiency, greenhouse gas, heating, impact study, management of resources, physical process, reduction of gas emissions, renewable energy, sustainable development

EN 

EN 

   EN 

 
 
EUROPEAN COMMISSION 

Brussels, 25.2.2010 
SEC(2010) 66 final 

COMMISSION STAFF WORKING DOCUMENT 

SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying document to the  

Report from the Commission to the Council and the European Parliament on 
sustainability requirements for the use of solid and gaseous biomass sources in 
electricity, heating and cooling 

COM(2010) 11 final 
SEC(2010) 65 final 

EN 

   EN 

 
 
 
  
 
 
 
 
 
 
1. PROBLEM DEFINITION  

The  EU  needs  to  increase  its  use  of  biomass  for  energy  purposes  to  reach  the  2020  targets 
agreed  under  the  Renewable  Energy  Directive1.  The  Directive  contains  a  sustainability 
scheme for biofuels and bioliquids. Article 17(9) of the Directive requires the Commission to 
report by 31 December 2009 on requirements for a sustainability scheme for energy uses of 
biomass other than biofuels and bioliquids.  

Solid  and  gaseous  biomass  can  originate  from  agriculture,  forestry  or  waste.  As  biomass 
resources are not infinite, an efficient and sustainable use of the resource is important. 

Market  failures  may  occur  because  climate  change  and  potential  negative  impacts  on 
biodiversity, water, soils and ecosystem services are not reflected in market prices.  

Regulatory failures may occur because renewable energy policy encourages Member States to 
support the use of more biomass, while rules or pricing mechanisms for biomass production 
do not take into account negative externalities, such as deforestation.  

These failures are not observed today on a significant scale, and in particularly not in the EU. 
However,  it  may  be  appropriate  to  create  safeguards  against  their  arising  in  future,  where 
more  biomass  and  an  increased  amount  of  imported  biomass  are  expected  to  be  used  for 
energy purposes. 

2. ANALYSIS OF SUBSIDIARITY 

Biomass can be easily traded. It follows that if Member States act alone, the internal market 
may  be  disrupted  for  biomass  traders,  suppliers  and  producers.  EU-wide  action  can  ensure 
that common environmental protection is achieved while avoiding distortions in the internal 
market.  

3. OBJECTIVES OF EU INITIATIVE 

The general policy objective is to guarantee a sustainable use of biomass for energy purposes. 
The  specific  objectives  are  to  ensure  that  heat  and  power  uses  of  biomass  leads  to  (1) 
sustainable production, (2) high greenhouse (GHG) performance compared to fossil fuels and 
(3) efficient energy conversion of biomass into electricity and heating and cooling. 

The  operational  objective  is  to  establish  sustainability  requirements  for  solid  and  gaseous 
forms of biomass used in electricity and heating, as long as they are: 

– 

– 

– 

effective in dealing with problems of sustainable biomass use,  

cost-efficient in meeting the objectives and  

consistent with existing policies. 

1 

Directive 2009/28/EC 

EN 

2 

   EN 

 
                                                 
4. POLICY OPTIONS 

Table 1: Summary table of options 

A. Production of biomass 

Policy Scenario 

Option A1: no new EU action 

Voluntary schemes continue to elaborate certification schemes for 
sustainable biomass production and land management.  

Option 
intensification methods in forestry 

Guidance 

A2: 

on 

Guidance on land use issues related to increased bio-energy 
production in forests e.g. increased use of stumps and branches and 
leaves. 

Option  A3:  minimum  criteria  on 
biodiversity and land use  

Criteria on biodiversity and land use or so-called 'no-go' areas under 
the Renewable Energy Directive to apply to all biomass. Forest 
management issues are left out of the scope.  

Option  A4a:  Option  A3  +  reporting 
on biomass origin 

As Option A3 + reporting requirements on Member States on biomass 
origin. 

Option  A4b:  Option  A3  +  reporting 
on  Sustainable  Forest  Management 
(SFM) 

Option  A5:  Option  A3  +  SFM 
minimum obligations 

As Option A3 + mandatory reporting requirements on Member States 
on sustainable forest management.  

As Option A3 + obligations on Member States to count forest 
biomass only from sustainable managed forests towards their 
renewable energy target. 

Option  A6:  Option  A3  +  LULUCF 
accounting 

As Option A3 + evidence of good practice in case country of origin 
does not account LULUCF emissions. 

B. GHG savings: 

Option B1: no new EU action 

Option  B2: 
performance 

labelling  of  GHG 

GHG performance requirements could be developed in voluntary 
schemes. 

Label GHG performance to give information to electricity or heat 
consumers and to promote GHG life cycle thinking for production 
processes. A common GHG methodology for labelling would be 
necessary to ensure consistency of claims. The obligation could be 
placed on electricity and heat providers, and the GHG performance 
could be made available on guarantees of origin, for disclosure 
purposes. 

Option  B3:  Setting  minimum  GHG 
savings 
35% 
requirements 
(increasing to 50-60% in 2017/2018)  

- 

35% minimum GHG saving requirement for agricultural and forest 
biomass (compared to fossil alternative) - same minimum requirement 
as for biofuels and bioliquids in the Renewable Energy Directive 

Option 
requirements 
GHG saving potential  

B4:  minimum  GHG 
in  accordance  with 

C. Conversion 

Option C1: No new EU action 

Introduce minimum GHG requirement in accordance with the Best 
Available Technology (BAT) in each pathway. 

Existing energy efficiency policy will yield results in making the use 
of all energy resources, including biomass, more efficient.  

Option  C2:  Bonus  for  better  end-
conversion  efficiency  or  penalty  for 
lower end-conversion efficiency 

Member States to give a bonus/penalty (i.e. financial 
incentive/disincentive) to improve efficiency through differentiating 
subsidy levels.  

EN 

3 

   EN 

 
 
 
 
Option  C3:  banning  inefficient  use 
or minimum efficiency standards 

Banning certain inefficient biomass technology options or introducing 
minimum requirements. Small-scale (mainly residential) use is out of 
the scope as dealt with by other EU policy.  

Option C4: labelling efficiency  

Option  C5:  improve  supply  chain 
efficiency 

Labelling to create awareness of the (end conversion) efficiency of a 
biomass pathway or installation e.g. biomass boiler, by giving insight 
into its performance e.g. through labelling energy savings on the 
guarantee of origin. 

A GHG life cycle methodology to include end-conversion efficiency.  

Options  A2,  A4b,  A6,  C4  and  C5  were  discarded  as  it  was  considered  that  the  policy  tools 
were not effective to address the problems identified. 

5. ASSESSMENT OF IMPACTS  

5.1. Environmental impacts 

No policy tool can give certainty that forests will be regenerated after biomass is harvested. 
Options A3 and A4a ensure that highly biodiverse areas, such as primary forests, cannot be 
converted for the production of biomass and that high carbon stock areas such as forests must 
remain  high  carbon  stocks  areas  even  after  biomass  production.  Option  A5  would  require 
evidence  of  managing  the  forest  sustainably,  however  such  evidence  is  difficult  to  verify 
without globally agreed common requirements on sustainable forest management.  

When considering the GHG benefits of the different options, it is evident that for most solid 
biomass chains used in electricity and heating, the savings are significant compared to using 
fossil alternatives (see Graph 1) 2.  

2 

Land  use  emissions  are  assumed  to  be  zero.  Losses  for  energy  conversion  are  included,  based  on 
assumptions of 25% electrical conversion efficiency, and 85% thermal conversion efficiency. 

EN 

4 

   EN 

 
                                                 
Graph 1: GHG savings potential of solid biomass feedstocks in electricity and heating 

GHG savings from solid biomass used in electricity and heating

Electricity

Heat

%
s
g
n
i
v
a
s
G
H
G

)
l
e
u
f

l
i
s
s
o
f

U
E
o
t
d
e
r
a
p
m
o
c
(

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

FR pellets (EU NG process fuel) 
FR pellets (EU/wood process fuel) 
FR pellets (tropical/NG process fuel)
FR charcoal (EU)
FR chips (EU)
FR chips (tropical)
FR charcoal (tropical)
FR pellets (tropical/wood process fuel)
Bagasse briquettes (NG process fuel)
wheat straw (EU)
Bagasse briquettes (wood process fuel)

Bagasse bales

Palm kernel shells

SRC pellets (EU/ NG as process fuel)
SRC pellets (tropical/ NG as process fuel)
SRC chips (EU)
SRC pellets (EU/ wood process fuel)
SRC chips (tropical)
Miscanthus
SRC pellets (tropical/ wood process fuel)

solid biomass feedstocks

*SRC refers to short rotation coppicing, FR to forest residues and NG to natural gas 

Given the high greenhouse gas performance of the main feedstocks, labelling these emissions 
(Option B2) is not likely to lead to additional GHG savings. Option B3 will lead to between 
5-20%  additional  GHG  savings  and  ensure  that  requirements  are  set  in  line  with  the 
Renewable  Energy  Directive  to  provide  consistency  for  those  feedstocks  that  can  be  used 
either  for  transport  purposes  or  for  electricity  and  heating.  Option  B4  will  lead  to  some 
additional GHG savings by leading to improvements in the chain, such as using wood instead 
of natural gas for the processing fuel. In the case of pelletising, switching from natural gas to 
wood  as  process  fuel,  would  lead  to  an  improvement  of  around  35%  GHG  savings  in 
electricity production.  

When  considering  the  conversion  efficiency  options,  positive  environmental  impacts  are 
dependent on the effectiveness of policy options to replace fossil fuel alternatives. The biggest 
improvements in efficiency could come from utilising the heat in electricity only plants (i.e. 
switching  to  combined  heat  and  power).  Setting  minimum  efficiency  standards  (Option  C3) 
only for biomass and not for fossil fuels may lead to negative environmental impacts, as the 
use of biomass may be disincentivised by higher costs. Providing a bonus or a penalty (Option 
C2) in support schemes would avoid the switching away from biomass to fossil, as a bonus 
usually means an additional incentive on top of other incentives to use renewable energy (e.g. 
more green certificates, price premium on top of feed in tariffs, investment subsidy etc). 

5.2. Economic impacts 

5.21. Costs to public administration 

The cost for  public administrations  to verify the  origin of biomass (chain of custody) under 
Options A3, A4a, A5, was estimated by using the EU's Standard Cost Model. Total costs for 
the EU-27 were estimated. One-off costs were estimated to be €0.3-1.1 million and recurring 

EN 

5 

   EN 

 
 
 
 
 
 
 
 
 
costs  between  €0.1-0.2  million  per  year.  Recurri ng  costs  include  the  cost  of  the  annual 
reporting  requirements  under  Option  A4a  to  the  Commission.  Additional  costs  will  be 
incurred  for  verifying  the  household  use  of  biomass  through  surveys.  Under  Option  A5, 
additional  costs  may  be  incurred  depending  on  requirements  for  sustainable  forest 
management.  

The cost for Options B3 and B4 are in the same range as costs under Options A3, A4a and A5 
as the highest costs are associated with putting the legislation in place. A single threshold for 
GHG  savings  under Option B3 may  decrease the administrative burden. Developing default 
values for pathways using different processes (e.g. wood or natural gas used as process fuel) 
would allow the use of a single threshold, while reflecting the differences in emissions in the 
different processes (as under Option B4). 

As regards the options to increase energy conversion efficiency, the costs to public authorities 
are lower where the  policy  is  easily  combined  with  existing  measures (e.g. bonus on top of 
existing support scheme), but higher where minimum standards are set for technologies that 
are diverse and dispersed (e.g. district heating). Administrative costs were calculated using the 
EU  standard  cost  model:  for  option  C2  costs  range  between  €400,000-1.6  million  and  for 
Option C3 between €700,000-3.7 million. 

5.2.2. Cost to economic operators 

To  estimate  the  cost  of  providing  proof  of  the  origin  of  biomass,  the  EU's  Standard  Cost 
Model was used. Recurring chain of custody (CoC) certification costs under Options A3 and 
A4 were estimated to be between €800-3,000 per year for individual biomass producers. The 
potential  costs  of  implementing  minimum  sustainable  forest  requirements  (Option  A5)  are 
higher, between €2,000-24,000 per year.   

Under  Option  B2,  B3  and  B4,  it  was  found  that  the  cost  of  GHG  certification  is  10-20% 
higher when the operators have to show actual GHG savings of the bio-energy chain. Costs 
calculated  for  the  EU-27  showed  that  for  processors,  manufactures,  traders  and  energy 
producers,  the  recurring  costs  are  60-70%  higher  when  GHG  certification  is  imposed 
compared to CoC certification alone. For individual energy producers above 1 MW capacity 
the recurring costs can vary between €898-5,643 per year.  

The cost of increasing efficiencies through using the produced heat, using add-ons to increase 
electricity  or  heat  production,  increasing  the  plants  size  or  technology  improvement  costs 
were  assessed.  An  option  for  minimum  efficiency  requirements  (Option  C3),  which  would 
require the use of heat, could lead to considerable compliance costs, between €50-200 million 
per installation. It is difficult to say what cost a bonus in a support scheme (Option C2) would 
have on operators, if any, as support is a voluntary measure, where a company is free to make 
use of the bonus.  

5.2.3. Economic availability of biomass 

In  developing  its  renewable  energy  policy,  the  Commission  had  based  its  assumptions  on 
biomass  availability  on  a  study  carried  out  by  the  European  Environment  Agency  (EEA)3, 

3 

EEA  (2007):  Environmentally  compatible  bio-energy  potential  from  European  forests.  Copenhagen, 
European Environment Agency 

EN 

6 

   EN 

 
                                                 
which  estimated  that  around  235  Mtoe  biomass  will  be  available  in  2020  for  energy  use, 
without harming the environment.  

An  updated  assessment  of  wider  literature  finds that  there  are  large  differences  in  estimates 
for  biomass  potentials.  These  differences  are  largely  due  to  assumptions  made  about  the 
availability of land, which is heavily influenced by productivity development assumptions.  

The availability studies however did not so far look at the impact of sustainability criteria on 
costs. The impact assessment found that the underlying studies usually limit their analysis to 
currently available agricultural lands and exclude highly biodiverse or nature protected areas4. 
It  is  therefore  expected  that  the  lion’s  share  of  the  biomass  potential  will  meet  the  land 
exclusion criteria and not have any impact on their economic availability. 

Options B1 and B2 do not impose minimum criteria and therefore would not have any impact 
on the economic availability of biomass. Option B3 would set a 50-60% minimum threshold 
for all existing/ new electricity and heat plants from 2017/2018 respectively. It was found that 
many  biomass  chains  that  do  not  meet  the  50-60%  thresholds  by  their  2008  typical  values 
(derived from Annex V of the Renewable Energy Directive) are projected to do so by 2020 
through  technological  or  efficiency  improvements.  The  additional  costs  for  carrying  out 
improvements  in  these  chains  to  reach  the  GHG  savings  requirements  are  estimated  to  be 
around €38-€62 million for the year 2020. 

In  terms  of  the  options  for  increased  conversion  efficiency,  any  impact  is  likely  to  be  a 
positive one, as a product of using less biomass to replace more fossil.  

5.3. Social impacts 

5.3.1. Households  

Sustainability  criteria  for  biomass  would  not  lead  to  significant  impacts  on  households,  as 
GHG  savings  obligations  is  not  likely  to  be  put  on  households  due  to  the  difficulty  in 
monitoring small-scale users.  

5.3.2. Employment 

Employment  effects  are  considered  negligible.  Some  employment  impacts  can  arise  from 
sustainability criteria where criteria lead to investment effects, i.e. increase in the demand in 
biomass related services and biomass-technology producing sectors.  

6. COMPARISON OF OPTIONS  

The  assessment  shows  that  on  the  production  side,  the  policy  option  for  putting  in  place 
minimum requirements for avoidance of biomass production from highly biodiverse lands and 
avoidance  of  negative  land  use  change  (i.e.  same  criteria  as  in  the  Renewable  Energy 
Directive)  is  the  most  cost-efficient.  Setting  minimum  thresholds  or  obligations  for 
sustainable forest management could lead to high costs for industry.  

4 

Dornburg  et  al  (2008):  Assessment  of  global  biomass  potentials  and  their  links  to  good,  water, 
biodiversity, energy demand and economy. Bilthoven, MNP. 

EN 

7 

   EN 

 
                                                 
As regards greenhouse gas performance, consistency with the Renewable Energy Directive is 
important.  An  EU-wide  harmonised  GHG  methodology  to  calculate  life  cycle  emissions  is 
recommended.  To  avoid  distortions  in  the  market,  the  policy  option  setting  minimum  GHG 
savings requirement at 35% and increasing to 50% from 2017 for existing plants and 60% for 
new  plants  from  2018  is  recommended  as  it  is  consistent  with  the  Renewable  Energy 
Directive. Wastes and processing residues, which routinely achieve high GHG savings should 
not need to fulfil such requirements. 

On  improving  energy  conversion  efficiency,  most  of  the  policy  options  would  only  be 
effective  if  fossil  alternatives  were  also  covered  by  them.  It  is  not  recommended  to  set 
efficiency  standards  only  for  biomass  pathways,  because  that  may  encourage  more  fossil 
energy being used instead. Option C2 is the preferred option, where Member States would be 
responsible  for  incentivising  high  efficiency  conversion  in  their  support  schemes  for  large 
(above 1MW) electricity and heat installations.  

When considering the question of whether or not these policy options should be in the form of 
binding criteria or recommendations to Member States, it was taken into account that biomass 
will  come  from  both  the  EU  and  imported  from  outside  the  EU.  Currently  the  import  of 
biomass from outside the EU is around 3%.  

Binding criteria would have the effect that only biomass considered sustainable under an EU-
wide scheme would count towards the renewable energy target. A voluntary approach based 
on recommendations from the Commission would not allow Member States to refuse to count 
biomass which does not fulfil the  obligations of the national scheme towards the renewable 
energy targets. Member States could however decide not to give financial support for biomass 
not meeting the national criteria.  

7. MONITORING AND EVALUATION 

The core indicator for meeting the objectives is the increasing use of biomass without leading 
to deforestation and other negative environmental impacts. Reporting and monitoring systems 
are  available  through  Eurostat  at  EU  level,  but  will  need  to  be  strengthened,  including  at 
national level, for more accurate results. 

EN 

8 

   EN