Introduction

This is the first progress report of Task 40 under the Bio-energy Agreement of the IEA: “Sustainable international bioenergy trade; securing supply and demand”, prepared for ExCo meeting 53, 6-7 May held in Luzern, Switserland. The proposal for this task was prepared in 2003 and formally submitted and presented to ExCo 52, held in November 2003 in Campinas, Brazil, where it was accepted as a new task under the Bio-energy Agreement.

The kick-off meeting of this new task was held on 19-20 January in Deventer, the Netherlands, where the work programme was discussed with the new team and various activities started-up. Because Task 40 is still in it’s starting phase, this progress report will contain little on deliverables and results. Nevertheless it will provide an overview of developments to date, actions planned and future strategy.

At present, the participating countries in Task 40 are the Netherlands, Sweden, Norway and Brazil. In addition two international institutions, FAO and the World Bank have linked up. The relatively large number of observers (European Commission, Finland and Croatia) and countries with which participation via industrial/market parties is still being discussed (Canada, UK and Italy) is a reflection of the fact that Task 40 is new and not yet fully established activity. The current number of full participants is lower than anticipated and results in a lower budget than projected in the proposal. However, the current interest is however promising and reason to go ahead with full enthusiasm.



Objectives

The future vision on global bio energy trade is that it develops over time into a real “commodity market” which will secure supply and demand in a sustainable way; sustainability brings a key factor for long-term security.
Task 40 investigates what is needed to create a “commodity market” for bio-energy. By means of this platform in which industrial parties, governmental bodies and NGO’s participate, this task will contribute to the development of sustainable bio-energy markets on short and on long term and on different scale levels (from regional to global). In its intended activities, the task programme will take the several stages of development of biomass markets in different regions of the world into account.
Furthermore, the ambition is that this platform can set the agenda and initiate a host of new activities relevant for developing biomass potentials worldwide.

Below, the generic objectives of the task are given, divided in shorter and medium term objectives. Further prioritisation of activities is discussed under the header ‘deliverables for this triennium’.

Short term objectivesAgreement on the emphasis on specific objectives and deliverables to be fixed together with participating countries and there stakeholders (especially interested industrial parties). Overview of available information, work, insights, modelling tools and their possibilities and limitations for evaluating biomass markets (resources and utilisation) on different scale levels (global, national, regional). Improvement on insights in influencing factors on the supply and demand of biomass for the short, medium and long term Overview of development of biomass markets in various parts of the world and generic lessons to be deductedSynthesis of existing trade experiences (i.e. Sweden, Finland, Brazil, the Netherlands) and survey on the possible effects towards existing markets (e.g. pulp wood, forestry and agricultural products and residues) on bio energy trade Synthesis of existing barriers, hampering development of a (global) commodity market (policy framework, ecology, economics) Identification of strategies to overcome “barriers” Identification of sustainability criteria and their local influence on the biomass market (e.g. development of best practice guidelines)Increasing public awareness of international bio energy trade (i.e. within IEA and other international organisations) Exchange of information on bio energy experiences between parties with a different stage of market developmentMedium term objectivesInternational platform (representatives from all kind of relevant stakeholders) for bio energy trade (e.g. supply and demand, sustainability, financial products etc.), required for the necessary dialogue. Dynamic demand and supply models of bio energy, that takes influencing factors (pricing, actual demand, stocks, energy use for long distance transport) into accountIdentification and analysis of options for integrating the production of biomass for energy and subsequent export into agricultural and agro-forestry systems especially in developing countries and countries in transition. Evaluation of the political, social, economic and ecological impact of biomass production and trade in these systems for the local people, for food production; also in relation to specific sustainability criteria.
All activities of the task aim at generating and disseminating information on technical and on barriers and solutions for developing biomass markets. Task 40 is closely related to other IEA Bioenergy activities, most notably Tasks 30 and 31 (on Short Rotation Crops for Bio-energy Systems and Biomass production for Energy from sustainable forestry), Task 38 (Greenhouse gas Balances of biomass and bioenergy systems) and Task 29 (Socio-economic drivers in implementing bio-energy projects).
Collaboration with those tasks is already discussed and partly planned for the coming years, e.g. by organizing joint activities and joint publications.



Operating Agent / Task Leader

The Operating Agent for the Task is the Ministry of Economic Affairs, represented by Erik Wissema. Alternate Operating Agent is the Netherlands agency for energy and the environment (NOVEM), represented by Kees Kwant. The Task Leadership is shared between Andre Faaij of the Copernicus Institute for Sustainable Development (Department of Science, Technology & Society) of the Utrecht University in the Netherlands and Rob Remmers and Martijn Wagener from the Dutch Utility Essent Sustainable Energy in the Netherlands. This joint leadership is typical for task 40 in which the market and science are to work together.

Participation

At present, the participating countries in Task 40 are the Netherlands, Sweden, Norway and Brazil. In addition two international institutions, FAO and the World Bank have linked up.
Observers are: European Commission, Finland and Croatia).
At present countries with which participation via industrial/market parties is still being discussed are: Canada, UK and Italy.

Up-to-date information is given under ‘contact information’.



BUDGET



At present, the Task budget for Task 40 is a major uncertainty for the task management. The original budget estimate assumed and annual budget of US$ 100.000, of which roughly half is reserved for personel capacity to prepare documents, such as papers, leaflets and reports (the other half reserved for meetings, printing costs, website, etc.). At moment of writing, the budget which is secured amounts US$58.000. Although chances that the original annual budget may be met at the end of this year are reasonably good given the number of official observers and other interested countries, the ambitions to produce major publications on should be lowered somewhat for the first year or so.

The final number of participants and resulting budget should be clear later in 2004, which will enable a more final planning of outputs and (time) budget available to do so.

Securing other funds is aimed for. Examples are EU funding, in kind contributions (such as the hosting of an event by FAO in October 2004) and a possible contribution of the World Bank to carry out relevant research in the context of the work programme of Task 40. This issue will also be discussed during coming task meetings in 2004.

Contributions from task participants (e.g. via national projects) are also under discussion. An important planned deliverable of Task 40 is to provide and overview of biomass trading experiences, covering both best practice examples as well as market assessments. Some partners have agreed to contribute to this work by providing overviews of their experiences later in 2004.



ACTIVITY MEETINGS



Two major components of the task meetings are the discussion of the progress in task activities and developments in individual member countries. Meeting reports are (and will be) prepared and can be downloaded after each meeting from the Task’s internet site (under construction).

An overview of task meetings already organised and scheduled is provided below:

PROGRESS



At this stage, substantial progress on various fields included in the work programme cannot be reported yet. Under deliverables for this triennium the various outputs are listed which are aimed for during this task period. The previous section reported the status of events scheduled and discussed, which should support the production of the deliverables.

Process information gathered on trading experiences and market development (based on country information and the business forum) into a standard publication on bio-energy trade. This publication could be updated with a certain frequency. Task 40 website.Various papers for setting the stage for international bio-energy trade:Conference paper for the 2nd World Biomass Conference, Rome May, 2004.Special Issue of the Journal Energy for Sustainable Development on bio-energy trade and sustainable development (to be published in 2005).Leaflet on biomass trade and emission and certificate trading published jointly by Task 38, 40 and 35 (spring 2004). Leaflet on the work of Task 40 (summer 2004).

PROGRESS ACHIEVED



See other sections.



DELIVERABLES FOR THIS TRIENNIUM



The list below summarizes the outcome of the kick-off meeting on desired deliverables of Task 40. This list is based on both the discussions and written input from various parties. Because not all (potential) participants were present the list may be expanded later in time.

Key priorities Task 40:Obtain an overview of current trading experiences and markets as well as potential future markets. Monitor the development of biomass markets and trade over time.Inventorize barriers for developing working biomass markets and (international) trade and strategies to cope with those barriers.Provide insight in the development of biomass resources and supplies in relation to market demand; e.g. by applying various (modelling) tools. Attention for performance and further development/optimization of long distance supply chains, in particular including sea transport.Certification, standardization and terminology for sustainable bio-energy trade.Sustainable forest fuel-supply chains (e.g. Russia). Provide strategic advice on how to develop and support bio-energy trade, e.g. for the EC, IEA Exco, FAO, etc.Identify possibilities for pilot- and demonstration projects and aim for supporting their development; especially in developing countries (e.g. Africa).Provide insight (e.g. through case studies and best practice examples) in the socio-economic and ecological impacts of biomass production and trading schemes and demonstrate how bio-energy trade can contribute to general (sustainable) development targets. Ethanol (trade) and (green) electricity are key energy commodities to consider. Besides residues (forest, agriculture) cultivated biomass should be part of the portfolio. Improved communication, raising awareness, networking and information exchange on the fields covered by the Task.
Subsequently a list of concrete deliverables and actions is derived. This list is divided in concrete actions for 2004 and in more aggregate terms for the period 2005 – 2006. It was noted, that in particular in the starting phase (first half of 2004) the status of various observers or potential participants is not clear and therefore the team (and budget) is relatively small. The task should therefore not be overambitious in the first phases but aim for a few valuable and concrete deliverables.

The task is to cover (in random order) Profit, People and Planet coming 1.5 years as themes for biotrade. This results in three key events on trading and markets (26-28 Octoboer in Rome hosted by FAO), an event in 2005 with Task 29 on socio-economics and an event later 2005 with tasks 30 and 31 on sustainable production systems. An event with Task 38 (Greenhouse Gas Balances) in 2006 on accounting rules of biotrade systems and certificate trading is also scheduled.



Intended deliverables and actions (2004)Fix work programme based on the minutes of meeting and final comments of all involved (short term)Organize a bussiness FORUM to start of in autumn with a major workshop on biotrade experiences, opportunities and barriers (with invited speakers); key event for 2004. This is likely to be combined with the invitation of FAO to host and event around that time.Launch website and start building library and network (lead by Essent; short term).Start preparing events for 2005 (see above; partly in combination with other tasks).Write an expression of interest for EC's FP6 (2 pager; short term); aiming for a full proposal in autumn 2004.Start working on country reviews on biomass use and the role of trade and development of markets (Norway, Sweden, Netherlands, a.o.)Write a leaflet/short paper for presenting the task with it's rationale and objectives on the biomass conference in Rome. Oral presentation of the task background and (planned) activities is approved by the conference organizors. Later in 2004: work on a complete position paper for the scientific press (Faaij + Task team).Lobbying for expanding the team (first aimed for Canada (Mallory/FPAC/Natural Resources), Finland (Ranta & Heinimö ), EC (Diamantaras), UK (Imperial College), Italy; some actions taken on Japan (Bo Hektor), Australia and New Zealand (Andre Faaij, March 2004)

Intended deliverables and actions (2005-2006)Start up activities for launching a special issue on Sustainable bio-energy trade for the Journal Energy for Sustainable Development (to be published in 2005; lead by UU).Plan an early evaluation of the progress of the Task in 2005 in order to sketch the work programme for the intended next triennium. Explore possibilities for starting trajectories towards pilots/demo's.Event (spring 2005) combined with IEA Task 29 on socio-economic aspects of bio-energy trade; bio-energy trade and potential contribution to (rural) developmentEvent (Autumn 2005) combined with IEA Task 30 and 31 (forestry and Short Rotation Coppice) on ecologically sound biomass production systems and certification for export. Process information gathered on trading experiences and market development (based on country information and the business forum) into a standard publication on bio-energy trade. This publication could be updated with a certain frequency. ……

CONTACT INFORMATION



Contact information of the Task members is given below.