Advancing the Irish Bio-Economy

Overcoming Barriers with Integrated Support Frameworks

‘www.TCBB.ie

Improved Environmental Sustainability – maintain the planet for future generations

Mitigate Drivers of Climate Change Improve Human/Animal Health and Wellbeing – address air/water/soil quality

Habitat maintenance to maintain biodiversity Comply w/ Binding Obligations (RES, GHG, ETS, Waste, Water/Soil) - avoid Non Compliance Penalties

Objectives Enhanced Bio Economic Development

Improved Societal Cohesion - wealth creation to maintain quality of life, social infrastructure

Secure supplies of staple commodities, stable prices Urban/Rural Divide – market mechanisms to replace taxation re wealth redistribution

Improved Economic Sustainability Resource Efficiency - reduce demand on finite raw materials supplies

Economic Growth - investment, employment, tax base, balance of trade, competitiveness

Farming

Primary Producers

Forestry Fishing

Fossil Fuels

Chemicals &

Fertilisers

Imports

Plastic & Fibre

Materials

Energy Food &

Beverage

Processors

Industrial &

Consumer Products

Domestic

Export

Consumers

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Raw materials . .

Products

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EU & State Taxation

Distribute Proceeds Across Supply Chain

Improve Productivity €€€€

Reduce Imports €€€€

Adapt Public Supports to: .

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Increase Exports €€€€

Pieces of the Puzzle: Sectoral Development Strategies

Leverage existing sectoral plans & build on strengths of traditional AMFM sector stakeholders - Primary Producers, Processing Co’s, Marketing Co’s, Gov’t, Support Services

• Agri - Dairy & Dairy Processing Beef, Poultry, Sheep, Equine & Meat Processing Tillage/Orchard/Horticulture & Food, Beverage Processing • Marine - Fisheries & Shellfish Algal • Forestry, Energy Crops & Forestry Processing • Municipal Waste - MSW Processing Municipal Wastewater

Align frameworks & support structures to add value in each sector - integrate interests

of non-traditional stakeholders to generate new market outlets, processing technologies & support Services Energy Co’s Pharma Chem & Biomedical Materials Companies Technology Companies Finance, Skills training & Support

Pieces of the Puzzle: Integrated Sectoral Development Strategies

Sectoral Strategies - Targeted Deliverables, Resourced Implementation Measures to incorporate non-traditional outputs

Build on Strengths, Align Frameworks & Support Structures in Each Sector to:

• Facilitate Market Entry - Demo Products / Access Distribution Routes & Facilitate Growth • Optimise Efficient Supply Chains – growing traditional outputs & facilitating non traditional value add • Improve Technology Development – leverage existing RD & D resource • Ease Infrastructure Deployment – optimise use of available facilities • Adapt Business Models

Strategies to Address Structural Deficits, Fragmentation

Balance Impact on State Exchequer…..where possible

• Use existing resources - progressively re-structure & re-align existing frameworks • Leverage State resource to increase access to (extensive) EU resources • Emphasize recoverable / recyclable supports (example: low cost risk financing)

Mobilisation Measures to Overcome Market Inertia, Stimulate Demand, Transition to Market-Based Structures - requirements determined by relative value & commercial vs societal Imperative

• Green Public Procurement (Underutilised) for both bio-products and bio energy • Bio Product “Pull” supports - Deploy targeted incentives to stimulate demand / market for bio-products

o Transition to “push” supports (sustainability obligations) after development of market, supply chain • Product Certification – Sustainability, Quality Assurance / Product Functionality

Pieces of the Puzzle: Facilitate Market Entry & Routes to Market

Domestic vs Export Markets: Import displacement offers large indigenous market opportunity (CSO Import Statistics 2015)

o Energy - Fossil Fuel € 6,500 M Export Opportunities ? (CERTS ??) o Organic Chemicals € 3,778 M Export Opportunities Arise in Parallel o Paper & packaging € 918 M Export Opportunities Arise in Parallel o Primary Plastics € 850 M Export Opportunities Arise in Parallel o Sugar Products € 374 M Export Opportunities Arise in Parallel o Animal Feed € 779 M o Fertiliser € 448 M

• Prioritise domestic demand as means to stimulate supply chain , leverage stakeholder distribution resources

Bioenergy – structural / supply chain deficit precludes effective move to market structures

• Sustainability Certification – RES E & Biogas, Biofuel standards can provide guidance, LCA tools complicated o Frameworks to promote domestic supply chain w/in boundaries of state aid / open market limitations o Adopt simpler protocols (default values) & develop Irish certification resources o Adapt RES certification programme to assist with market development

• Pull Supports o REFIT (REISS): Limited extension to support bio (waste-to-) energy baseload ? o RHI: Sustainability measures to differentiate support levels ?

‒ Biomass drying - residual heat vs primary heat, waste-to-energy vs energy crops to dry energy feedstock ? ‒ Coupled w/ bioenergy boiler finance to facilitate cash strapped end users ? ‒ Apply to biogas? – consider producer subvention for biogas

o Carbon taxation vs excise taxation on biofuels

• Push supports – o BBO: Sustainability certification/redemption value/ excise tax derogation / carbon tax to support local producers o Develop RES E and biogas push measures to transition away from pull supports o ETS: Adapt RES certification schemes (RHI?) criteria to promote use of domestic RES

Pieces of the Puzzle: Facilitate Market Entry & Routes to Market

Corresponding Supply Chain & Distribution Must Be Developed With Market Outlets

Pieces of the Puzzle: Facilitate Market Entry & Routes to Market

RES Routes to market – timely / cost effective access to grid infrastructure is barrier to RES market development

• Power Grid o Capacity constraints, upgrade timing, method of cost recovery preclude supply chain development o Heat Distribution – infrastructure deficit precludes valorisation

‒ Enablers to deploy microgrids – aggregate localised demand for energy efficient CHP ?

• Gas Grid – need published injection protocols to equalise national access o Current proposal for 30/70 capital cost recovery precludes smaller operator access o State sponsored mechanism to spread incr. capital cost across multiple potential users

‒ Virtual grid protocols (health & safety regulation rather than gas grid regulation)

• State financed programme for community based access infrastructure ?

Pieces of the Puzzle: Efficient Primary Producer Supply Chain

• Primary Producer Challenge: Coexist vs Cannibalise - Maintain fodder & grain supply while increasing forestry, energy crops, non food cereals/ tillage

o Residue Valorisation – obvious means to increase productivity is to valorise existing residues o Dual output systems - crops or processing methods that generate both feedstock & feed o Intensive production systems – variation of hydroponics or other intensive systems that improve

fodder production on restricted land area o Nutrient recycling – recycled nutrients to increase intensity mitigating cost & environmental impact o Land Mobilisation – structure opportunities / incentives to mobilise “Hidden Hectares”

Prioritise applications w/ sufficient market opportunity / margin to support productivity measures o Structures req’d to ensure sufficient value flows to primary producer o Financing structures required to support capital costs

• Fragmentation & Land Allocation - devise spatial plans and adapt incremental support structures to minimise fragmentation & promote conformity to spatial plans (forestry)

• Marine Mobilisation - Would development of fish farming system generate effluents for hydroponics / algae suitable as fodder ??

Pieces of the Puzzle: Environmental Issues

GHG Emissions – Ireland will miss binding 2020 Obligation to reduce GHG emissions by 20%

• Emissions trading scheme (ETS) governed by cap and trade process will achieve 2020 targets, new targets challenging • Non ETS sectors - state to manage compliance, will not achieve these targets (Only 2% reduction)

27%

73%

Agriculture

Transport

32%

20%

11%

10%

Domestic

Other

Ireland Emissions

Non ETS Emissions

Other Obligations: • Waste Management - reduce routing of biodegradable waste to landfill – will achieve by exporting waste • Water Quality – surface & ocean water quality standards likely to be achieved • Air Quality – likely to be achieved

Recognise Value of Environmental Compliance

Pieces of the Puzzle: Efficient Waste Management

Municipal Solid Waste Management – treat MSW waste as resource

• Multi operator system inefficient – fragmentation precludes scale, exacerbates margin pressure • Precludes investment in infrastructure, technology development, poses barrier to valorisation …….. drives

export of waste materials • Precludes effective pay-by-weight / 3 X bin system for food waste – incentive/enforcement/education • Precludes community based system for grass green waste collection – local authority and domestic • Precludes security of feedstock supply for 3rd party RES operators

o If sector cannot be re structured, consider public investment in shared infrastructure

WWT Valorisation – consider organic load as resource, WWT plants as bio-economic facilities

• Anaerobic technology converts organic load in WWT to biogas • Reduces sludge generation, reduces energy cost … possible route to low cost capacity enhancement • Sludge disposal generates biohazard concerns – dry & use as thermal feedstock

• WWT facilities as processing sites - ideally located, appropriate planning, available infrastructure

Pieces of the Puzzle: Conversion Technology Development & De Risking

Non Traditional Technologies – Advance Technology Readiness Levels By Sector • RES technologies – relatively mature (AD, biomass combustion) - ATP optimisation req’d • Biorefining technologies – require development & de risking ( 1st Gen mature relative to 2nd Gen)

RD & D Programme Fragmentation – distribution of funding & facilities increases collaboration but is detrimental to impact

Orientation of RD&D Programme Along Technology Development Curve • Current RD&D prog’s oriented toward scientific investigations & knowledge generation …….. (papers) • Lack facilities / orientation to support production process emulation, mass / energy balance validation,

process optimisation, conversion economics validation, process demo’s…….... (not products) • Advance along development curve to fully engage commercial community - risk /reward paradigm

Develop / Adapt Centres of Excellence w/in each sector – move up Techn. Development Curve • Develop small commercial demo to produce near to mkt product - revenue for ongoing funding • Integrate sectoral centre of excellence & pilot facilities @ demo location – focus on product development • Target academic RD &D prog to support product development ….. emulate EU models • Improve leverage of state resources to attract EU funding

Pieces of the Puzzle: Infrastructure Deployment

Planning / Licensing IPPC Framework: to become enabler vs barrier

• IPPC framework to be made more efficient – single point of implementation (ABP), limit grounds for appeal o An Bord Plaenala appeal process to enforce timelines

• IPPC framework to support “facilitation” of new waste processing protocols o National Centre of Excellence facility to test, evaluate and certify emissions (ongoing enforcement role) o Cross functional body to facilitate reviews of local derogation powers under EU waste framework ?

• Public Info programme to include demonstrators open to public??

Site Availability – consider brownfield site re-development vs greenfield • Multiple brownfield sites available • Multiple de activated landfills, amenity recycling facilities are in public ownership • ERDF funding programme available for re-development, subject to Regional Assembly Operational Prog’s.

Pieces of the Puzzle: Business Models

Business Structures: • Mature Markets: Traditional Horizontal Structure creates price tensions between producer & processor • Immature Markets: price tension creates risk that is difficult to overcome … precludes supply chain develop’t

• May need to initially promote vertical structure to align interests of producer & processor, raise capital & secure efficient supply chain • Consider Co op model, Corporate model or PPP – can be unwound as market matures

Access to Finance – PPP model to mobilise EU financing, overcome market deficits • Leverage EU monies as source of finance, private operator as source of expertise & route to market • Public Body as finance partner – can stimulate supply chain development

• Incorporate some of the desired “societal” measures o Public bodies in position to introduce mobilisation measures

• As market / value chain develops – exit and recycle funds

Primary Producer

Processor Customer Goods Goods

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Processor

Customer Goods

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Overcoming Barriers with Integrated Support Frameworks

‘www.TCBB.ie