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An assessment of competition for biomass resources within the energy and transport sectors

Listed author(s):
  • Graham, Paul W.
  • Brinsmead, T.S.
  • Reedman, Luke J.

Bio-energy is expected to become increasingly attractive in the future owing to its potential to contribute to lowering greenhouse gas emissions, increasing rural and regional employment and improving energy security through substituting for oil imports. The volume of sustainable biomass resources that are economically competitive but do not significantly impact on food production is expected to slowly expand as new feedstock varieties and refining pathways are developed. However, these volumes will remain limited relative to total energy and transport sector fuel demand. Limited biomass resources will be allocated to the sector that is most able to afford them. This will depend on the price of existing fossil fuel products and the relative cost of converting biomass into substitute final fuels such as bio-derived electricity, ethanol blends, biodiesel and bio-derived jet fuel. It will also depend on factors such as the availability and cost of alternative fuel and energy sources, government policies including excise rates, and the emission intensity of each sector. This paper presents a number of alternative cost curves for bio-energy resource to final energy costs and applies a partial equilibrium model of the electricity and transport sectors, called the Energy Sector Model (ESM), to determine where the limited biomass resources are likely to be allocated under various scenarios. Preliminary projections are presented for biomass uptake in each of the electricity, road and aviation sectors to 2050.

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Paper provided by Australian Agricultural and Resource Economics Society in its series 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia with number 100553.

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Date of creation: 2011
Handle: RePEc:ags:aare11:100553
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