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Use of critical feedstock in biofuel threatens a bio-industry


The production of biofuels has long been mired in controversy – especially over the highly contentious issue of which feedstocks are appropriate to use in making the fuels.

Indirect land use change (ILUC) has been a hot topic since it became clear that using edible crop-based feedstocks created a number of unintended consequences. Food prices have soared and research1 has shown that ethanol’s carbon footprint was higher than originally thought. In need of new sources for large volume biofuel feedstocks, biofuel manufacturers have recently turned to wood-based biomass.

This approach to biomass consumption creates yet another set of unintended consequences. Vibrant bio-based industries in the European Union and worldwide are being damaged and their contributions to achieving a successful bioeconomy are undervalued – or worse, ignored. 

There are several factors causing this counter-productive situation: 

  • Core biomass feedstocks of long-standing innovative industries are being misclassified as residues or waste by some member countries. The error arises when the feedstock is not properly recognized as a co-product that has been processed to give it added value for use in a range of industries. That means that rather than maximize the use of biomass feedstock it is used for a purpose that may not realize its full value. 
  • With the waste or residue classification, these essential feedstocks are eligible for use in biofuels and are being diverted to that subsidized industry. The result is artificially increased prices for wood- and wood-based co-products because the biofuels industry is supported with tax subsidies and incentives – estimated at tens of millions of Euros of taxpayer money.2 This gives the biofuels industry an unfair advantage over other industries.
  • Governments are relying on incomplete and flawed greenhouse gas emission studies in determining the environmental benefits of biofuels. Solid scientific evidence about product life cycles must be assessed by policymakers to enable them to make fully-informed  decisions regarding biofuel subsidies and mandates.

It seems that the European Commission is starting to realize that existing policies may be doing more harm than good. At the beginning of 2014, the EC introduced a policy framework for climate and energy from 2020 to 2030. It recommended a “more holistic and integrated approach” to creating an efficient transport system and biofuels policy. The EC also called for “an improved biomass policy” to “maximize the resource efficient use of biomass in order to deliver robust and verifiable greenhouse gas savings and to allow for fair competition between the various uses of biomass resources in the construction sector, paper and pulp industries and biochemical and energy production.”

The experience of one industry vying for the same constrained feedstock as some biofuel manufacturers shows that the EC is moving in the right direction in creating a balanced marketplace based on a thorough analysis of biomass policy impacts. 

Resource-efficient use of biomass

The pine chemicals industry uses Crude Tall Oil (CTO), a sustainable, wood-based biomass material, as its primary feedstock.  Made by recovering natural chemical output from pine trees, CTO is a co-product of the papermaking process. The CTO is then upgraded in complex bio-refineries to produce pine chemicals which are used in a variety of products such as inks, paints and coatings, adhesives, soaps, oilfield chemicals, cholesterol-reducing drugs, chewing gum and drink stabilizers.  

The EC’s call to maximize the resource efficient use of biomass means using feedstocks to their fullest for the most optimal use possible. The pine chemicals industry has made major investments in bio-refineries and in R&D to extract the full value of the pine chemicals derived from the pine tree. The industry maximizes the added value of CTO through “cascading use.” Cascading use is the thorough utilization of the value chain to take advantage of each new product’s co-products to create another product, until 100% of each co-product’s potential has been harnessed. Any residual material that can no longer be processed to a higher value is then, and only then, used as a fuel.

CTO is a constrained resource as production volume is based on the production of paper and availability is therefore limited. CTO is consumed globally by companies with bio-refineries and is imported or exported to meet demand from the pine chemicals industry. If CTO is diverted to biofuels due to government incentives the pine chemicals industry will suffer shortages and higher prices. 

The Renewable Energy Directive, the cornerstone of the legislative effort to help the EU reach renewable energy goals, defines the difference in wastes, residues, products and co-products. These definitions are very important as the residue or waste categories allows added incentives as well as preferential import tariff classifications. Even though these classifications are clear, in practice, there has been deviation from these definitions. For example, CTO has been defined as a residue in Sweden, and its status is unclear in other countries such as Austria, Denmark and France. In the UK, CTO is rightly classified as a “product.” 

In the papermaking process, special equipment and additional processing must be installed to produce CTO. It is produced intentionally and with additional cost to make it a value add product available for sale. Historically, the CTO has been sold to the pine chemicals industry for upgrading to value add chemicals. It is in no way a waste or residue under the EU definitions. 

The misclassification of CTO does not hold up to the EC’s idea of “resource-efficient use of biomass.” What does hold up, however, is the pine chemicals industry’s efficient use of CTO through the practice of cascading use and a longstanding focus on biorenewable innovation.

Creating unfair competition

When biofuel manufacturers and distributors get financial breaks in the form of subsidies, tax exemptions or tax reductions they have better buying power and the CTO market tilts in their favor. They have an unfair advantage that creates a market imbalance and discriminates against established industries that need these constrained raw materials to maintain their businesses.

If CTO is made available to one market player at a subsidized price, a unique industry that has been efficiently using biomass resources for decades and has been helping accomplish bio-economy and environmental goals even before they were formally stated will be put at risk. The government incentives are likely to created shortages as well as higher prices damaging the fundamental business of the pine chemical bio-refineries. This will cause lost jobs and will place substantial capital investments at risk. 

Flawed Emissions Assessments

As the European Commission calls for “robust and verifiable greenhouse gas savings,” in the case of CTO, savings are neither robust nor verifiable. Member states are subsidizing development of CTO-based biofuels with the supposition that such fuels will yield a major environmental return on investment. While they expect to substantially reduce greenhouse gas (GHG) emissions and fossil fuel use from transportation biofuels, recent life cycle analysis studies  show both assumptions are flawed.

Findings from a third party-developed, peer-reviewed life cycle analysis3 of GHG emissions of pine chemicals used as industrial chemicals compared to the alternative use in biofuels prove a different reality.

In fact, there is no reduction in GHG or fossil fuel use when diverting CTO for use in biofuels. That’s because the substitutes that would replace the pine chemicals have a much higher carbon footprint and use more fossil fuel to produce. In Europe, the carbon footprint of pine chemicals is 70 percent lower than the substitute materials that would be used to create a product with a similar function. In addition, with CTO increasingly used to produce biodiesel for transport fuel, the LCA found no significant differences in the nonrenewable energy and carbon footprints when using CTO for biodiesel or pine chemicals. Such comprehensive studies debunk prior GHG claims. 


When the EC decided not to establish new biofuel targets when setting its energy goals from 2020 to 2030, it charted a new and more reasonable course for growth of the bio-economy and achievement of emissions goals. We couldn’t agree more. Now is an opportune time for the EC to implement the following actions:

  • Set clear definitions of waste, residues, products and co-products and uniformly implement them among EU member states.
  • Require independently-certified LCA studies that assess both fossil fuel and GHG impacts as well as the effect of the substitutes that may come into the market to replace the current biomass based products.
  • Re-evaluate the tax breaks and subsidies given to biofuel manufacturers. When governments interfere with free market competition, it supports one industry at the expense of another. Such trade-offs have the potential to damage the pine chemicals industry, potentially causing loss of revenue and jobs.

Innovative industries with long-term track records of being profitable and self-sufficient, (i.e. not needing subsidies to survive), should be treated fairly. Newer markets should also be able to stand on their own. Remove incentives and let the biofuels business model determine whether or not the industry moves forward.

Today millions of Euros are being spent to support biofuel manufacturers. Is it taxpayer money wisely spent? If new applications for CTO are good investments without governmental assistance, then they should survive and thrive self-sufficiently -- without intervention. All the pine chemicals industry is requesting is a level playing field on which to access its raw materials.  

This is exactly what the European Commission is calling for: the resource efficient use of biomass, more comprehensive GHG studies and fair, free-market competition.  


Charles Morris is president and CEO of the Pine Chemicals Association, which is dedicated exclusively to promoting the growth, success and sustainability of the global pine chemicals industry. Pine chemicals are environmentally friendly products that use natural, renewable products as primary raw materials originating from sustainable forestry sources. PCA represents rosin and terpene producers and consumers of crude gum tapped from pine trees, and producers and consumers of papermaking co-products, including tall oil rosin, tall oil fatty acids and terpene chemicals. For more information, please visit


1. "Using corn crop residue to make ethanol and other biofuels reduces soil carbon and can generate more greenhouse gases than gasoline." University of Nebraska-Lincoln study, published in Nature Cimate Change.

2. Source: Hydrocarbon Resins, Rosin Resins and Pine Chemicals Producers Association (HARRPA), part of the European Chemical Industry Council (CEFIC) from corporate annual reports and country tax tables.

3. "Greenhouse Gas and Energy Life-Cycle Assessment of Pine Chemicals Derived from Crude Tall Oil and Their Substitutes," 2013, sponsored by the American Chemistry Council's (ACC) Pine Chemistry Panel and conducte by Franklin Associates.

Posted 24/06/2014 by Reg Tucker

Tagged under: biofuels , policy

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