The biomass sector will be at risk if regulation does not recognize its costs

In recent months, there has been an extraordinary increase in the costs associated with operating the biomass sector, coinciding with a growing demand for agroforestry biomass. APPA Biomasa is calling for the new regulations governing the sector to reflect this increase in costs, incorporating an updated remuneration necessary for the survival of the national biomass sector.

The future of the biomass sector will be seriously jeopardized if the regulations governing it do not take into account the difficult situation this renewable sector is facing, given the exorbitant rise in fuel prices and the high demand for biomass.

Currently, the remuneration parameters for this sector are being published . These orders drastically cut the remuneration for biomass-fired renewable energy plants. Specifically, the orders assume that biomass and other operating costs only increased by 1% in 2022. This is far from the truth: in the last year, biomass costs (the raw material used by these renewable energy plants) have risen by nearly 40%. Furthermore, the price of diesel (which accounts for more than 30% of the sector's associated costs and affects transportation, carrier, and machinery costs) has also experienced an unprecedented increase.

The exponential rise in costs associated with biomass harvesting (due to rising inflation, which affects all levels: diesel, wages, etc.) is compounded by a growing demand for agroforestry biomass : wood, for domestic and industrial heating, and also other biomass to replace fossil fuels in industry. This increased demand is coming from outside Spain, as Nordic and Central eur are putting increasing pressure on the Spanish biomass and wood market.

The cost assumptions used by the Government in the aforementioned draft regulations are therefore far removed from reality , and this also means that the remuneration it considers necessary to achieve the reasonable profitability it had guaranteed for this technology is also far removed from reality.

The situation is so complicated for the sector that some producers are being forced to halt production, temporarily close their facilities and, in some cases, implement workforce reduction plans for their employees .

We find ourselves in a situation of incoherence in which, on the one hand, renewable energy plants with biomass (which “theoretically” have a reasonable profitability guaranteed by the State) have to stop and, at the same time, to cover that lack of production, combined cycles of natural gas are being used.

Renewable energy from biomass is a sector with great potential in our country , given its abundance of biomass resources to be harnessed. Furthermore, it is the only renewable energy source that is also manageable, independent of weather conditions such as wind or sun. In this way, biomass helps guarantee energy supply and provides stability to the electrical grid, while also promoting energy independence, so crucial in times like these.
 
This sector is also strongly linked to rural areas, contributing to territorial cohesion and population retention in these communities . Of all renewable technologies, biomass has the greatest job creation effect: 25 direct, indirect, and induced jobs per megawatt installed.