Electrification and the bioeconomy: three sides to the story

The document analyzes how the falling costs of variable renewable energy (VRE) and batteries impact the bioeconomy. It identifies competitive tensions in ground transport and power generation, where electrification may disrupt biofuel demand or create infrastructure lock-in. Conversely, it highlights complementary roles for biomass in 'hard-to-abate' sectors like aviation, marine transport, and heavy industry (steel and cement), as well as its value as a dispatchable energy source. In low-income countries, the brief suggests 'clean stacking' for cooking and the use of solar-powered appliances to enable bioeconomy value chains. Finally, it notes synergistic opportunities where low-cost renewable electricity can reduce the carbon footprint of biofuel production via electrolysis-based hydrogen.

• The rapid decline in costs for solar PV, wind, and lithium-ion batteries is transforming energy markets, enabling decentralized electricity access in low-income countries and putting downward pressure on retail electricity prices in high-income countries.
• In ground transport, electrification of vehicle drivetrains threatens to disrupt liquid fuel demand, but biofuels can facilitate a faster phase-out of fossil fuels for the existing internal combustion engine fleet, provided they do not create a long-term infrastructure lock-in.
• Biomass-based electricity generation provides a critical complementary function to weather-dependent VREs because it is dispatchable, meaning future plants should prioritize flexibility and load-following capabilities.
• Biofuels remain essential for the aviation and marine sectors in the medium to long term because batteries are only suitable for niche segments and synthetic electrofuels are currently only cost-competitive against the most expensive biofuels.
• In heavy industries such as steel and cement, biomass can support decarbonization either by substituting fossil fuels in raw material processing and kilns or by serving as a carbon source for iron-to-steel processing.
• In low-income countries, the lack of electricity is a bottleneck for bioeconomy value chains (e.g., refrigeration and irrigation), but falling solar costs are making necessary appliances more affordable.
• A synergistic relationship exists where low-carbon electricity can reduce the carbon footprint of biofuel production by replacing natural gas-based steam reforming with electrolysis to produce the hydrogen needed for refining cellulosic biomass.
• For households in developing countries, a pragmatic transition to cleaner cooking may involve 'clean stacking,' using solar for lighting and clean biomass for cooking, as electric cooking remains unaffordable for many.

APA

Stockholm Environment Institute (2019). Electrification and the bioeconomy: three sides to the story. https://www.sei.org/publications/electrification-bioeconomy-three-sides-to-the-story/

Chicago

Stockholm Environment Institute. Electrification and the bioeconomy: three sides to the story. 2019. https://www.sei.org/publications/electrification-bioeconomy-three-sides-to-the-story/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Electrification and the bioeconomy: three sides to the story |date=4 December 2019 |url=https://www.sei.org/publications/electrification-bioeconomy-three-sides-to-the-story/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2019electrification, author = {{Stockholm Environment Institute}}, title = {{Electrification and the bioeconomy: three sides to the story}}, institution = {Stockholm Environment Institute}, year = {2019}, month = dec, url = {https://www.sei.org/publications/electrification-bioeconomy-three-sides-to-the-story/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }