IDEAS home Printed from
   My bibliography  Save this article

Cost-effective policy instruments for greenhouse gas emission reduction and fossil fuel substitution through bioenergy production in Austria


  • Schmidt, Johannes
  • Leduc, Sylvain
  • Dotzauer, Erik
  • Schmid, Erwin


Climate change mitigation and security of energy supply are important targets of Austrian energy policy. Bioenergy production based on resources from agriculture and forestry is an important option for attaining these targets. To increase the share of bioenergy in the energy supply, supporting policy instruments are necessary. The cost-effectiveness of these instruments in attaining policy targets depends on the availability of bioenergy technologies. Advanced technologies such as second-generation biofuels, biomass gasification for power production, and bioenergy with carbon capture and storage (BECCS) will likely change the performance of policy instruments. This article assesses the cost-effectiveness of energy policy instruments, considering new bioenergy technologies for the year 2030, with respect to greenhouse gas emission (GHG) reduction and fossil fuel substitution. Instruments that directly subsidize bioenergy are compared with instruments that aim at reducing GHG emissions. A spatially explicit modeling approach is used to account for biomass supply and energy distribution costs in Austria. Results indicate that a carbon tax performs cost-effectively with respect to both policy targets if BECCS is not available. However, the availability of BECCS creates a trade-off between GHG emission reduction and fossil fuel substitution. Biofuel blending obligations are costly in terms of attaining the policy targets.

Suggested Citation

  • Schmidt, Johannes & Leduc, Sylvain & Dotzauer, Erik & Schmid, Erwin, 2011. "Cost-effective policy instruments for greenhouse gas emission reduction and fossil fuel substitution through bioenergy production in Austria," Energy Policy, Elsevier, vol. 39(6), pages 3261-3280, June.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:6:p:3261-3280

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Bram, S. & De Ruyck, J. & Lavric, D., 2009. "Using biomass: A system perturbation analysis," Applied Energy, Elsevier, vol. 86(2), pages 194-201, February.
    2. Marbe, Å & Harvey, S & Berntsson, T, 2004. "Biofuel gasification combined heat and power—new implementation opportunities resulting from combined supply of process steam and district heating," Energy, Elsevier, vol. 29(8), pages 1117-1137.
    3. Leduc, S. & Starfelt, F. & Dotzauer, E. & Kindermann, G. & McCallum, I. & Obersteiner, M. & Lundgren, J., 2010. "Optimal location of lignocellulosic ethanol refineries with polygeneration in Sweden," Energy, Elsevier, vol. 35(6), pages 2709-2716.
    4. Möllersten, Kenneth & Gao, Lin & Yan, Jinyue & Obersteiner, Michael, 2004. "Efficient energy systems with CO2 capture and storage from renewable biomass in pulp and paper mills," Renewable Energy, Elsevier, vol. 29(9), pages 1583-1598.
    5. Eriksson, Ljusk Ola & Bjorheden, Rolf, 1989. "Optimal storing, transport and processing for a forest-fuel supplier," European Journal of Operational Research, Elsevier, vol. 43(1), pages 26-33, November.
    6. Tzimas, Evangelos & Georgakaki, Aliki, 2010. "A long-term view of fossil-fuelled power generation in Europe," Energy Policy, Elsevier, vol. 38(8), pages 4252-4264, August.
    7. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers Archive 12881, Iowa State University, Department of Economics.
    8. van der Zwaan, B. & Gerlagh, R., 2009. "Economics of geological CO2 storage and leakage," Other publications TiSEM cee3746c-8c8f-4c8d-8046-5, Tilburg University, School of Economics and Management.
    9. König, Andreas, 2011. "Cost efficient utilisation of biomass in the German energy system in the context of energy and environmental policies," Energy Policy, Elsevier, vol. 39(2), pages 628-636, February.
    10. Pope, Jeff & Owen, Anthony D., 2009. "Emission trading schemes: potential revenue effects, compliance costs and overall tax policy issues," Energy Policy, Elsevier, vol. 37(11), pages 4595-4603, November.
    11. Sørensen Torekov, Mikkel & Bahnsen, Niels & Qvale, Bjørn, 2007. "The relative competitive positions of the alternative means for domestic heating," Energy, Elsevier, vol. 32(5), pages 627-633.
    12. Uddin, Sk Noim & Barreto, Leonardo, 2007. "Biomass-fired cogeneration systems with CO2 capture and storage," Renewable Energy, Elsevier, vol. 32(6), pages 1006-1019.
    13. Erwin Schmid & Franz Sinabell, 2004. "On the Choice of Farm Management Practices after the Reform of the Common Agricultural Policy in 2003," WIFO Working Papers 233, WIFO.
    14. Azar, Christian & Lindgren, Kristian & Andersson, Bjorn A., 2003. "Global energy scenarios meeting stringent CO2 constraints--cost-effective fuel choices in the transportation sector," Energy Policy, Elsevier, vol. 31(10), pages 961-976, August.
    15. Andre Faaij, 2006. "Modern Biomass Conversion Technologies," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 11(2), pages 335-367, March.
    16. Sanden, Bjorn A. & Azar, Christian, 2005. "Near-term technology policies for long-term climate targets--economy wide versus technology specific approaches," Energy Policy, Elsevier, vol. 33(12), pages 1557-1576, August.
    17. Havlík, Petr & Schneider, Uwe A. & Schmid, Erwin & Böttcher, Hannes & Fritz, Steffen & Skalský, Rastislav & Aoki, Kentaro & Cara, Stéphane De & Kindermann, Georg & Kraxner, Florian & Leduc, Sylvain & , 2011. "Global land-use implications of first and second generation biofuel targets," Energy Policy, Elsevier, vol. 39(10), pages 5690-5702, October.
    18. Cerqueira Leite, Rogério Cezar de & Verde Leal, Manoel Regis Lima & Barbosa Cortez, Luís Augusto & Griffin, W. Michael & Gaya Scandiffio, Mirna Ivonne, 2009. "Can Brazil replace 5% of the 2025 gasoline world demand with ethanol?," Energy, Elsevier, vol. 34(5), pages 655-661.
    19. Delzeit, R. & Holm-Müller, K., 2009. "Steps to discern sustainability criteria for a certification scheme of bioethanol in Brazil: Approach and difficulties," Energy, Elsevier, vol. 34(5), pages 662-668.
    20. Sues, Anna & Juraščík, Martin & Ptasinski, Krzysztof, 2010. "Exergetic evaluation of 5 biowastes-to-biofuels routes via gasification," Energy, Elsevier, vol. 35(2), pages 996-1007.
    21. Grohnheit, Poul Erik & Gram Mortensen, Bent Ole, 2003. "Competition in the market for space heating. District heating as the infrastructure for competition among fuels and technologies," Energy Policy, Elsevier, vol. 31(9), pages 817-826, July.
    22. Karl Steininger & Herbert Voraberger, 2003. "Exploiting the Medium Term Biomass Energy Potentials in Austria: A Comparison of Costs and Macroeconomic Impact," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(4), pages 359-377, April.
    23. Schmidt, Johannes & Leduc, Sylvain & Dotzauer, Erik & Kindermann, Georg & Schmid, Erwin, 2010. "Cost-effective CO2 emission reduction through heat, power and biofuel production from woody biomass: A spatially explicit comparison of conversion technologies," Applied Energy, Elsevier, vol. 87(7), pages 2128-2141, July.
    24. Berndes, Goran & Hansson, Julia, 2007. "Bioenergy expansion in the EU: Cost-effective climate change mitigation, employment creation and reduced dependency on imported fuels," Energy Policy, Elsevier, vol. 35(12), pages 5965-5979, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Pasimeni, Maria Rita & Petrosillo, Irene & Aretano, Roberta & Semeraro, Teodoro & De Marco, Antonella & Zaccarelli, Nicola & Zurlini, Giovanni, 2014. "Scales, strategies and actions for effective energy planning: A review," Energy Policy, Elsevier, vol. 65(C), pages 165-174.
    2. Olivia Koland & Martin Schönhart & Erwin Schmid, 2013. "International Trade of Bio-Energy Products – Economic Potentials for Austria," FIW Research Reports series IV-004, FIW.
    3. repec:gam:jsusta:v:9:y:2017:i:10:p:1792-:d:114019 is not listed on IDEAS
    4. Bartolini, Fabio & Viaggi, Davide, 2012. "An analysis of policy scenario effects on the adoption of energy production on the farm: A case study in Emilia–Romagna (Italy)," Energy Policy, Elsevier, vol. 51(C), pages 454-464.
    5. Azadeh, Ali & Vafa Arani, Hamed, 2016. "Biodiesel supply chain optimization via a hybrid system dynamics-mathematical programming approach," Renewable Energy, Elsevier, vol. 93(C), pages 383-403.
    6. Mesfun, Sennai & Sanchez, Daniel L. & Leduc, Sylvain & Wetterlund, Elisabeth & Lundgren, Joakim & Biberacher, Markus & Kraxner, Florian, 2017. "Power-to-gas and power-to-liquid for managing renewable electricity intermittency in the Alpine Region," Renewable Energy, Elsevier, vol. 107(C), pages 361-372.
    7. Shree Shakya & S. Kumar & Ram Shrestha, 2012. "Co-benefits of a carbon tax in Nepal," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 17(1), pages 77-101, January.
    8. Pettersson, Karin & Wetterlund, Elisabeth & Athanassiadis, Dimitris & Lundmark, Robert & Ehn, Christian & Lundgren, Joakim & Berglin, Niklas, 2015. "Integration of next-generation biofuel production in the Swedish forest industry – A geographically explicit approach," Applied Energy, Elsevier, vol. 154(C), pages 317-332.
    9. Bobo Zheng & Jiuping Xu, 2014. "Carbon Capture and Storage Development Trends from a Techno-Paradigm Perspective," Energies, MDPI, Open Access Journal, vol. 7(8), pages 1-30, August.
    10. Schmidt, J. & Schönhart, M. & Biberacher, M. & Guggenberger, T. & Hausl, S. & Kalt, G. & Leduc, S. & Schardinger, I. & Schmid, E., 2012. "Regional energy autarky: Potentials, costs and consequences for an Austrian region," Energy Policy, Elsevier, vol. 47(C), pages 211-221.
    11. Chinese, D. & Patrizio, P. & Nardin, G., 2014. "Effects of changes in Italian bioenergy promotion schemes for agricultural biogas projects: Insights from a regional optimization model," Energy Policy, Elsevier, vol. 75(C), pages 189-205.
    12. Steubing, Bernhard & Ballmer, Isabel & Gassner, Martin & Gerber, Léda & Pampuri, Luca & Bischof, Sandro & Thees, Oliver & Zah, Rainer, 2014. "Identifying environmentally and economically optimal bioenergy plant sizes and locations: A spatial model of wood-based SNG value chains," Renewable Energy, Elsevier, vol. 61(C), pages 57-68.
    13. Thiel, Christian & Nijs, Wouter & Simoes, Sofia & Schmidt, Johannes & van Zyl, Arnold & Schmid, Erwin, 2016. "The impact of the EU car CO2 regulation on the energy system and the role of electro-mobility to achieve transport decarbonisation," Energy Policy, Elsevier, vol. 96(C), pages 153-166.
    14. Khatiwada, Dilip & Leduc, Sylvain & Silveira, Semida & McCallum, Ian, 2016. "Optimizing ethanol and bioelectricity production in sugarcane biorefineries in Brazil," Renewable Energy, Elsevier, vol. 85(C), pages 371-386.
    15. repec:eee:energy:v:125:y:2017:i:c:p:85-96 is not listed on IDEAS
    16. Patrizio, P. & Chinese, D., 2016. "The impact of regional factors and new bio-methane incentive schemes on the structure, profitability and CO2 balance of biogas plants in Italy," Renewable Energy, Elsevier, vol. 99(C), pages 573-583.
    17. Kirchner, Mathias & Schmidt, Johannes & Kindermann, Georg & Kulmer, Veronika & Mitter, Hermine & Prettenthaler, Franz & Rüdisser, Johannes & Schauppenlehner, Thomas & Schönhart, Martin & Strauss, Fran, 2015. "Ecosystem services and economic development in Austrian agricultural landscapes — The impact of policy and climate change scenarios on trade-offs and synergies," Ecological Economics, Elsevier, vol. 109(C), pages 161-174.
    18. Patrizio, P. & Leduc, S. & Chinese, D. & Dotzauer, E. & Kraxner, F., 2015. "Biomethane as transport fuel – A comparison with other biogas utilization pathways in northern Italy," Applied Energy, Elsevier, vol. 157(C), pages 25-34.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:39:y:2011:i:6:p:3261-3280. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.