(134a) Harmonized Cost and Availability Estimates for Emerging Fuels and Energy Carriers

The Long-Term Decarbonization Strategy of the United States outlines the goal to reach economywide net-zero greenhouse gas (GHG) emissions by 2050. The cost and availability of low-carbon energy carriers derived from biomass, as well as their spatial and temporal variation, will be key determinants of decarbonization pathways. Bioenergy could play a crucial role in the U.S. decarbonization strategy, with rapidly evolving bioenergy markets poised to influence the future of energy deployment. This transformation is driven by a range of decarbonization incentives and subsidies. Furthermore, the bioenergy pathways are characterized by differences in quality of feedstock, readiness of conversion pathways and competition with other alternatives.

Even as bioenergy pathways are understood as critical to achieving low-carbon energy and carbon dioxide removal, there is substantial ambiguity in evaluating these pathways. Different studies may use disparate data sources and assumptions to estimate costs and GHG emissions associated with such systems. There is also a gap between top-down models used to understand the economywide scale of such deployments and bottom-up models used for improving process parameterization. This leads to unresolved data gaps and discrepancies in top-down models where these pathways are not represented equally across technologies which can limit their ability to resolve details highly relevant to technology choices and supporting infrastructure requirements among others. The latter may also rely upon the use of displacement or allocation approaches in configurations involving more than one marketable products, which adds greater uncertainty.

To address the aforementioned gaps in bioenergy analyses, this study provides a harmonized supply curve of future fuels and energy carriers in the United States out to 2050. The study covered conversion pathways that include biomass-to-biofuel, biogas, hydrogen, electricity, and bioproducts and matching them with regional availability of various feedstock to produce these energy carriers under different technology scenarios. To achieve this aim, we developed a harmonized data framework that brings together the input requirements for production of fuels and energy carriers and linking them with data for the supply, price, and greenhouse gas intensity of the inputs. We employed different scenario narratives that represent sets of technological policy conditions and account for varying levels of technology advancement, ease of deployment, and supporting policy conditions. Doing so also reduces the data availability uncertainties associated with system expansion in traditional life-cycle assessments and facilitates a distinction between displacement credits and carbon dioxide removal.

Under the developed set of scenarios, we analyzed the impact of regional variation in electricity retail rate based on the Regional Energy Deployment System (ReEDS) model, and biomass feedstock supply curves based on the Billion Ton 2016 Study and recent updates (Billion Ton 2023) on the supply curve for the emerging fuels and energy carriers. Biomass supply and bioenergy production scenarios are distinguished based on agricultural productivity (including future biotechnology-driven improvements in energy crop yields, as well as conventional crop yields and management practices), land availability, biomass-to-biofuel conversion cost improvements, and decisions to produce, convert, and use biofuels, bioelectricity, biohydrogen and products that may limit rates of change. Furthermore, implementation of biofuel incentives was explored. This biofuel incentive represents stacked/combined incentives including the Renewable Fuel Standard (RFS) established in 2005 and later amended in the 2007 Energy Independence and Security Act, the 2022 Inflation Reduction Act (IRA), and the California Low Carbon Fuel Standard (LCFS), a representative state-level incentive program.

Our analysis showed that about 0.7-1.1 billion dry tons of biomass can be mobilized in 2050 across different scenarios. Particularly, accelerating herbaceous biomass production from crop residues and dedicated energy crops concentrated in the Midwest and eastern Great Plains (i.e., Petroleum Administration for Defense District 2) will be critical to unlocking bioenergy production. A substantial amount of bioenergy can be produced at costs comparable to fossil incumbents; however, upfront investment will be required for scale up. Biofuels production potential ranged between 45-65 billion gallons gasoline equivalent (GGE) in 2050 and production costs start from ~$3.00-$5.00/GGE depending on the pathway. The estimated biomass supply is sufficient to provide 35 billion gallons of sustainable aviation fuel (SAF) and 60 billion gallons of total fuel (including other biorefinery coproduct fractions) in the “high” technology ambition scenario at production costs of $7/GGE. Predicted constraints on potential investment and capacity buildout could limit the amount of biofuel produced in 2050 to around half of this amount.

Although the results here place emphasis on biofuels, there are other energy carriers (bioelectricity, biohydrogen) and products that can be produced from biomass depending on incentives and decarbonization content. As such, we evaluated the effect of sensitivities in available incentives for bioenergy. Our findings showed that current stacked incentives—including open-ended RFS and transient IRA incentives—significantly offset biofuel production costs, achieving negative costs in some cases. These incentives are market-dependent, dependent on fuel carbon intensity, and may not distinguish sectorally between aviation and other fuel uses to push biofuel to aviation as envisioned in the SAF Grand Challenge goal. The results from this study help draw insights about the interplay of feedstock availability, technology readiness and policy push for decarbonization and potential costs of alternative technology choices.