Carbon accounting of material substitution with biomass: Case studies for Austria investigated with IPCC default and alternative approaches

• Carbon accounting of material substitution with biomass compared to fuel substitution.
• GHG benefits of material substitution are analysed under different accounting methods.
• High benefits in comparison to fuel substitution with biomass are possible.
• Benefits do not (fully) materialize under default methods, creating wrong incentives.
• Default IPCC accounting methods need to be revised to provide adequate incentives.

There is evidence that the replacement of carbon-intensive products with bio-based substitutes (‘material substitution with biomass’) can be highly efficient in reducing greenhouse gas (GHG) emissions. Based on two case studies (CS1/2) for Austria, potential benefits of material substitution in comparison to fuel substitution are analysed. GHG savings are calculated according to default IPCC approaches (Tier 2 method assuming first-order decay) and with more realistic approaches based on distribution functions. In CS1, high savings are achieved by using wood residues for the production of insulating boards instead of energy. The superiority of material substitution is due to the establishment of a long-term carbon storage, the high emission factor of wood in comparison to natural gas and higher efficiencies of gas-fired facilities.The biomass feedstock in CS2 is lignocellulosic ethanol being used for bio-ethylene production (material substitution) or replacing gasoline (fuel substitution). GHG savings are mainly due to lower production emissions of bio-ethylene in comparison to conventional ethylene and significantly lower than in CS1 (per unit of biomass consumed). While CS1 is highly robust to parameter variation, the long-term projections in CS2 are quite speculative.To create adequate incentives for including material substitution in national climate strategies, shortcomings of current default accounting methods must be addressed. Under current methods the GHG savings in both case studies would not (fully) materialize in the national GHG inventory. The main reason is that accounting of wood products is confined to the proportion derived from domestic harvest, whereas imported biomass used for energy is treated as carbon-neutral. Further inadequacies of IPCC default accounting methods include the assumption of exponential decay and the disregard of advanced bio-based products.

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