None of the advanced biofuel technology routes within scope of this study, apart from FAME, HVO and co-processing, are currently widely commercially deployed and several are still at pilot-scale. Therefore their deployment to 2030 is likely to be limited by technology development, number of companies developing new technology, how quickly they can build out new plants, and willingness of investors to fund new plants.
For these pre-commercial technology routes their likely deployment to 2030 is assessed using a ‘bottom-up’ method. This relies on the information gathered on existing companies and plants in Task 2 and Task 3 (sections 2 and 3) to provide reliable information on the status and production capacity of each pathway. The likely future deployment of each route is then assessed based on the following key factors that influence how far and how fast a pathway can progress:
How long it takes to build each plant? (Project timelines)
How many years each plant operates for? (Lifetime)
Where are these plants built? (EU or Rest of World)
How large each plant is? (Plant capacity)
How many hours per year a plant operates for? (Utilisation rate)
How many commercial projects can be started each year, e.g. via technology licences? (Initiation rate)
How soon after a previous project starts is it is feasible for the next project to start? (Launch points)
How many of these plants and developers might fail/be unsuccessful? (Success rate, compounded)
How many developers are independently starting projects? (From Tasks 1-3)
More detail is provided on each of these factors in Appendix F. Figure 52 gives a summary of how these different factors fit together, and how they impact the 2030 production volume projections. Given the large degree of uncertainty in how these factors will vary to 2030, two scenarios, ‘Challenging Growth’ and ‘Technology Success’, are developed to project the potential production volume. A third scenario, RED II stretch is developed specifically to illustrate how the RED II target might be reached, requiring very rapid technology ramp-up.
Figure 52 Illustration of the key steps of the ramp-up methodology for a single developer The scenarios differ in terms of the following assumptions, as summarised in Table 57, with additional detail provided in Appendix F:
Initiation rate (number of Nth commercial projects that start construction per year (globally), per developer)
Launch-point (Number of years of operation of plant required before the next scale-up of plant)
Success rate (probability of any particular project being successful from inception to operation)
In all of these scenarios a supportive policy environment for advanced biofuels is assumed. This supportive policy environment is assumed to provide sufficient support for advanced biofuels to make them cost-competitive with fossil fuels, so that all existing developers of advanced biofuel technologies continue to develop plants and scale-up. Therefore the scenarios for deployment shown here reflect the technical ability of the industry to scale-up, based on the current number of
technology developers, scale of existing plants, and plausible build-rates in this industry. Availability
of sustainable feedstock is not considered a limiting factor in the scale-up of plants, as both scenarios fit within the currently available feedstock volumes, as demonstrated in section 7.3.4. The actual rate of deployment will depend on a wide range of factors including the cost competitiveness of each technology, the level of policy support available, and infrastructure to access sufficient quantities of sustainable feedstock.
Table 57: Summary of assumptions across the three* scenarios for advanced biofuel deployment to 2030
Scenario: Challenging growth Technology success RED II stretch
Initiation rate 1 for all technologies apart from AD, 5 for AD
2 for all technologies apart from AD, 10 for AD
Between 3 and 5 for all technologies apart from AD, 25 for AD
Launch-point 1 – 3 years 0.5 - 2 years 0 – 1 years
Success rate 50-90% 75-95% 100%
Note: RED II stretch illustrates the conditions which would be required in order to meet RED II target. For each scenario, and for each biofuel production technology, we model the anticipated advanced biofuel capacity deployment in Europe and in the Rest of the World, based on location of existing plants and the assumption that 50% of plants from 2nd commercial scale onwards will be located in Europe.
7.2.2 Feedstock-limited routes
An alternative methodology was used to assess the ramp-up of FAME, HVO and co-processing, as these technologies are more commercially mature and are likely to be limited by the availability of sustainable feedstock rather than technology development, particularly given that waste feedstock is required in order to produce advanced biofuel. The availability of waste fats and oils in the EU and the rest of world was therefore used in order to assess the likely supply of advanced biofuel from these three technology routes together.
Biodiesel production volume from FAME, HVO and co-processing is expected to be significantly higher than other advanced biofuel routes. Feedstock availability will be a limiting factor, due to the challenges of waste oil collection, and competition from non-energy use, limiting the amount of transport fuel that could be produced via these routes. Currently around 20% of globally available waste fats and oils are used for biodiesel production, Therefore across the two scenarios, varying percentages of the feedstock is assumed to be used for biofuels: 25% under the challenging growth scenario and 50% under the technology success scenario.
7.2.3 Future production cost
The cost of advanced biofuel technologies is assessed based on their anticipated first commercial plant costs, obtained from a variety of literature sources including IRENA (2017), Cornell (2017) and input from plant developers. If the first commercial plant is anticipated before 2030 then a 2030 cost is also estimated, using a learning rate approach based on the deployment modelled in the market outlook assessment.