The sense and nonsense of biomass

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Biomass is an essential tool in our net zero transition, but it’s also a very tricky resource because we can only use a finite amount. If we exceed that, we either start messing with food prices (like what happened with corn in Mexico*) or degrading the environment.

Global estimates suggest that biomass demand in aggressive decarbonization scenarios will exceed sustainable supply by a factor of 11-16x in 2050.* Making it critical for investors to have clear guidelines for when to (or not to) invest in biomass.

So what is the sense and nonsense of biomass? Let’s dive into it.

What is sustainable biomass?

Biomass is organic matter from recently living (but now dead) organisms, such as wood, energy crops, agricultural residues and organic waste from industry and households.

Although biomass can be renewable, its production isn't always sustainable or beneficial from a carbon emissions point of view. For biomass to reduce greenhouse gases and be considered sustainable, its land use must result in lower emissions over its entire lifecycle compared to what would have been sequestered naturally.

What do we use it for today?

• Wood for furniture and buildings (6 EJ today) and pulp and paper (10 EJ today)
• Wood burning to heat buildings and cook, such as three-stone fire, often with no or poorly operating chimneys (24 EJ)
• Electricity generation (8 EJ)
• Bioenergy for process heat in the industrial sector (10 EJ)

Today, biomass is about 10% of the global energy supply. According to Systemiq, our current usage of biomass is already higher than what can be considered sustainable. Again, making it critical for us to focus on its best applications.

When does it fundamentally make sense to use biomass?

Three principles:

1. If we can electrify it, we should do that instead of using biomass because it's more efficient and abundant, e.g to to run cars on electricity versus biogas
2. Prioritize use cases where biobased materials are used as a chemical feedstock, e.g. to make plastics as there aren’t many alternatives to decarbonize them
3. Squeeze as much power as possible from the remaining biomass and use it for hard-to-decarbonize areas, such as bio-jet fuel for long-haul aviation

3 cases where it makes sense to invest in

1) Biomass as a chemical feedstock

• Why: Using sustainable biomass as a material feedstock for plastics offers cost advantages and environmental benefits, including temporary carbon sequestration and lower air pollution, unlike its use in general bioenergy.
• Examples: Genera grows carbon-negative grass fiber and turns it into compostable packaging and bioproducts, while Notpla makes regenerative packaging materials from seaweed and plants.

2) Tech that squeezes as much energy from biowaste as possible

• Why: Prioritizing technologies that efficiently convert biowaste into energy ensures optimal use of resources, preventing wastage and maximizing output quality.
• Examples: Antec has a 95% efficiency (versus 70%) for traditional biogas plants, and WASE will have a 90% methane concentration (versus 45-75%) in biogas once the technology matures

3) Tech that enables the use of cellulosic biomass for biofuel production

• Why: Advancing technology to convert woody, cellulosic biomass (meaning that we can still use the rest of the crop as food) into biofuels can significantly enhance the sustainability of fuel production, addressing the difficulty of processing this type of biomass.
• Examples: Terragia develops efficient biodegradation methods for cellulose and Metafuels creates sustainable aviation fuels.
  
  

2 cases where it doesn’t make sense to invest in

1) Biomass for electricity generation

• Why: Bioenergy for power is less cost-effective and efficient compared to solar, wind and battery storage, and the CO2 abatement benefits depend heavily on the biomass source and supply chain.

2) Growing food crops for transport fuels

• Why: Using crops for fuels increases food prices and exacerbates food insecurity risks due to the limited availability of agricultural resources needed to support a growing global population. For example, corn is 30% more expensive today because we’re using it to fuel our cars.

The above summary highlights our Impact team's in-depth analysis of biomass. We use this research to engage with the funds we invest in and try to encourage them to invest only in the cases where it makes sense. If you want to really dive deep into all things biomass, bioenergy and biomaterials, I suggest this report by the Energy Transitions Committee.

💡 Carbon Equity updates

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💡 News from within our funds

Cyclic Materials, which provides a circular solution for rare earths from cloud computing operations, from Microsoft’s Climate Innovation Fund to accelerate the deployment of its commercial facilities.

Fervo Energy, which uses geoscience to provide cost-effective, reliable geothermal energy, announced two power purchase agreements with Southern California Edison (SCE), one of the nation’s largest utilities. The 15-year agreements for 24/7 carbon-free geothermal energy will provide power for the equivalent of 350,000 homes across Southern California.

Unspun, which provides a 3D weaving technology to allow for (almost) zero-waste, on-demand manufacturing, announced a new $32m funding funding and a multi-year agreement with Walmart.

You can explore more companies within our funds here.

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