Is there a favourable policy mix for development of biorefinery concepts?

A biorefinery co-produces various high-quality products such as biofuels, chemicals, electricity and heat from a biomass-based commodity. Although there are good pre-conditions in Sweden to develop different types of biorefinery concepts through integration of new technologies into existing industrial processes, these have so far been poorly utilized. An important reason is the lack of an appropriate innovation policy with a purpose of creating favourable conditions for scaling up immature technology with significant commercial potential and climate benefits, while providing existing renewable technologies the conditions to outcompete the fossil alternatives.

A newly finished project within the Swedish Energy Agency and f3 collaborative research program Renewable transportation fuels and systems (Förnybara drivmedel och system) has aimed to demonstrate the potential of various policy instruments for the realization of future biorefineries in the production of primary renewable fuels. The project has been lead by Hans Hellsmark, Chalmers University of Technology, with participants from Bio4Energy (LTU) and IVL. Several industry representatives have also been involved in the project as a reference group.

The project concludes that different types of complementary policy instruments are required for the design of an appropriate innovation policy. These consist of a combination of technology push, technology pull and system-wide tools that aim to achieve learning so that existing laws and regulations can be adapted to new technology. Through a presentation and comparison of important biofuel policy instruments implemented in ten different countries/regions (Sweden, Germany, Finland, Italy, UK, Norway, Canada, Brazil, USA and California), some general conditions appear that need to be met for an innovation policy the biofuels area. They include e.g. long-term and high ambitions, clarified goals and ambitions that are not hidden in a general climate policy, basic long-term instruments that can serve as a driving force for policy as well as technology, prevention of unsustainable solutions' access to the market, and increased knowledge on the implementation and interaction between specific and general instruments.

The report from the project is written in Swedish with an English summary. Access it here.