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FAO/UNEP/UN-Energy Bioenergy Decision Support Tool -
MODULE 3: Implementation and Operation
policies are more common in OECD countries, many developing
countries have also adopted them in recent years (REN21, 2010)
REGULATORY OPTIONS
The regulatory framework for bioenergy is connected to overall
energy/environment policy but is also related to laws governing
the agricultural and forest sectors, as well as to trade, industrial
and fnancial legislation and implementation mechanisms. Laws
and regulations must also respect national and international
conventions on climate change, biodiversity and natural resource
exploitation. The scope is wide and depends signifcantly on
the general underlying legal framework, but some options that
special relevance for bioenergy or can be important for facilitating
successful implementation of bioenergy systems are:
• Rules for independent power production;
• Blending mandates for use of biofuels in the transport sector;
• Sustainability requirements for bioenergy;
• Forest protection and rules for wood extraction in forests;
• Limits or stipulations to land ownership.
Some of these options can also be thought of as being fnancial
rather than regulatory mechanisms; for example, blending
mandates regulate quantity, which in turn impacts prices.
The more direct type of fnancial support schemes are briefy
summarised below.
FINANCIAL SUPPORT
There are various types of fnancial support that might be included
within renewable energy or bioenergy legislation or as part of
other economic legislation. Some examples are:
• Feed-in tariffs for biomass-based electricity and/or heat
production (which concern more the tail end of the bioenergy
supply chain);
• Credit made available at the start up of bioenergy investment
operations;
• Technology development grants for specifc feedstocks or
conversion platforms;
• Tax reductions for biofuel production or use as compared to
fossil fuel equivalent sources;
• Programme of support for demonstration projects;
• Carbon or GHG reduction support schemes.
Current sources of support for GHG reductions in developing
countries are often project-based, including the Clean
Development Mechanism and various voluntary carbon fnance
schemes
<Mod4: Project Screening>
.
There are nevertheless
options available to link GHG reduction goals to policy-based
support, through differentiated taxes or through quotas and
targets.
INTERNATIONAL TRADE
Although there are no specifc international trade agreements
dealing with bioenergy, there are several agreements under the
auspices of the WTO that have relevance (FAO, 2009):
• Agreement on Agriculture (AoA);
• Agreement on Sanitary and Phytosanitary Standards (SPS);
• Agreement on Technical Barriers to Trade (TBT);
• Agreement on Subsidies and Countervailing Measures
(ASCM);
The specifc implementation mechanisms chosen should be
screened in relation to such international agreements. In the
case of exports, the SPS agreement can affect conditions
to quarantine, health measures, and other specifcations for
particular feedstocks and bioenergy products, while the ASCM
can affect subsidies and punitive measures applied in relation to
bioenergy trade. The TBT has implications for national technical
specifcations, fuel quality requirements, labelling and certifcation
procedures (FAO, 2009). Even where no exports or international
trade in bioenergy products per se are involved, the agreements
can have relevance due to trade in conversion technology
platforms, labour requirements, competing agricultural options
and other factors.
The DOHA round of trade talks initiated an effort to remove
tariff and non-tariff barriers to trade in environmental goods and
services; potential biofuel producers with competitive advantages,
especially those in tropical countries with plentiful land and water
resources, could beneft as tariffs are removed. Africa and South
America would beneft most due to the combination of productive
land availability and low population density (UNCTAD, 2009).
Other complications in international trade and support schemes
arise in that some bioenergy products fall under the agricultural
agreement (e.g. bio-ethanol) whereas others fall under industrial
categories (e.g. biodiesel) and thus they are subject to different
tariff rates and subsidies. Furthermore, biofuels are rather different
from other renewables in that they can have various non-energy
applications; the Harmonised Commodity Description Coding
System (HS) does not distinguish such non-energy uses, which
can complicate some countries’ schemes for providing support to
only the energy uses.
Programme Development
Effective policies and programmes are developed through the
formal institutions, government policies, business practices,
physical infrastructure and soft infrastructure (education,
fnance, etc.) that together can facilitate or hinder the design and
implementation of the bioenergy strategy. Bioenergy programmes
serve various purposes; as with any energy/environmental activity,
they might address various aspects of effciency, effectiveness
and sustainability in implementing a bioenergy strategy:
• Pursue higher-level strategy or policy objectives that cannot
be obtained through general bioenergy market development
nor through individual projects;
• Managing or coordinating similar small projects at various
locations under one umbrella to save on common
infrastructure costs, operating costs and transaction costs;
• Technology push through promoting learning curve effects
nationally or regionally through high technical standards
and consistency and uniformity in products and market
development;
• Create cross-sector synergies by combining projects or
initiatives from different sectors;
• Provide training or and support broader capacity
development-building that is unlikely to be provided through
project experience or general market development;
• Provide general dissemination and outreach to stakeholders
and/or the general public;
• Address signifcant research, development and
demonstration needs, such as may be necessary for
feedstocks and conversion options;
Many programmes will take on several of these characteristics or
address several of these goals at the same time. Large projects
may take on such programme-like characteristics in that they
may require signifcant new administrative structures and include