Since 2015, AEBIOM is involved in an innovative EU project called “Sustainable Regional Supply Chains for Woody Bioenergy” (BioRES). This project aims at developing Biomass Logistics and Trade Centres (BLTCs) in three countries, Serbia, Bulgaria and Croatia based on the best case practices already existing in Austria, Germany and Finland. This offers a great opportunity to learn more about the specificity of these developing bioenergy markets. After Serbia and Bulgaria in the past two weeks, AEBIOM had the opportunity to speak with Marina Malogorski (REGEA) regarding the current status of the bioenergy sector in Croatia:
- What is the situation of bioenergy in Croatia? What are the trends?
Croatia has a rich domestic supply in woody biomass, but the market is not living up to its full potential. One of the main obstacles for the market uptake are low energy prices – the price of natural gas is below the market value, which does not make a convincing business case for renewables, such as woody biomass in most cases. Where it does make a business case is the wood processing industry where you can find installed biomass systems, including CHP systems, to make use of the existing byproducts. Wood has been traditionally used for heating and cooking in rural households
and still households are the number 1 woody biomass consumers. The main product in this segment is logwood which is being sold locally in a fairly informal market. In many cases, homeowners are also private forest owners and harvest wood for their own uses practically for free. The main problem is that the wood in those households is being burnt in old and inefficient stoves harming the environment. This situation is also reflected in the fact that about 90% of Croatia’s pellets and woodchips are being exported to foreign markets. Unfortunately there is only very limited available financing for the installation of new boilers and national policies and financing programmes do not effectively promote the use of woody biomass which is probably the main obstacle to the full development of the woody biomass market.
- Why did REGEA decide to engage in the development of bioenergy projects such as BioRES? Why did you consider that Biomass Logistics and Trade Centres (BLTCs) could be a replicable concept in Croatia?
REGEA was founded in 2008 by the City of Zagreb and 3 adjacent counties rich in forests. From the very beginning, our main task was to increase the use of biomass through fostering both the demand and supply. So far, our main demand driving activities were the set-up of the first Croatian biomass heating plant in Pokupsko through the IPARD programme, installation of biomass boilers in many public buildings and implementing heat contracting services. Creating critical demand is the foundation for the development of economic activities such as ones promoted through BioRES. And the ultimate goal of fostering the development of the woody biomass market is to improve the local and national economy, which has suffered a great deal during the recent financial crisis. As for the BLTCs, it is a well tested concept proven successful in Slovenia and Austria, countries we have a lot in common with – so if it works there there is no reason it shouldn’t work here. Before entering the BioRES partnership we had already participated in EU funded projects that promoted sustainable local biomass production and the concept of BLTCs. Through projects such as BTC II (funded by Intelligent Energy Europe) and EU CBC project BioHeatLocal (funded by IPA Cross-border Programme Slovenia-Croatia) we have carried out studies on woody biomass value chains and conducted trainings on quality assurance and the BLTC concept attended by private forest owners, local suppliers and investors. The positive feedback and growing interest in the field has given us much confidence to continue providing support in that direction.
- Which kind of industries could benefit the most from a stronger bioenergy sector in Croatia?
Obviously, the wood processing industry would feel the advantages of a stronger woody biomass market, but there are also local manufacturers of boilers and providers of energy services under the EPC model that would reap benefits. Further on, private entrepreneurs searching to expand their existing business or private forest owners considering self-employment options would suddenly see some new opportunities. Given the high unemployment rate and the poor economic situation this sounds like a very good thing. Within the BioRES project we have identified a city owned public company maintaining green areas with approximately 2-3.000 t of woody biomass as residues from their activites interested in investing in a BLTC. So, as you can see, a wide range of industries can find their own niche in the woody biomass market.
- What are the next steps for REGEA with regards to the creation of BLTCs?
We have worked together with potential investors in woody biomass since the establishment of our agency and their number is only growing. Traditionally we have worked in North-West Croatia, but we have started spreading our activities and support to individuals and organizations in other parts of the country. Investors are mostly in need of technical assistance in the form of feasibility studies, business plans, and application for funds, which is exactly what project BioRES is providing and we will continue providing that kind of support in the future. At the same time we keep reminding national authorities to support the sustainable use of biomass through effective policies and financial support, because this is the main obstacle in finally kick-starting the domestic market. More and more in our activities we focus on the social aspect of BLTCs by building on their potential to be the cornerstone in empowering citizens to drive the energy transition and becoming “prosumers”.
For more information, visit REGEA’s website.
Interview conducted by Glen Wilson & Jean-Baptiste Boucher