Renewable Fuels from Biomass and Hydrogen in the North Sea Region

Regionalization and commoditization strategies for sustainable bioenergy

The global energy transition is shifting from centralized fossil fuels to a more decentralized system, with an increasing focus on regionalized energy supply for improved supply security. Commoditization, on the other hand, is promoted as a way to connect regionally available, diverse biomass with global markets. The “Regional Transitions 2.0” project is one of the central Task 40 (Deployment of biogenic value chains and carbon management) activities. The project looks into mobilizing feedstocks and settupin biobased value chains and explores, among others through case study, whether regionalization and commoditization strategies are mutually exclusive for sustainable bioenergy. The main finding is that both strategies present unique opportunities and risks, and that the regional context is crucial to the sustainability of biobased supply chains. The Regional Transitions 2.0 project has evaluated five different case studies on both regionalization and commodization strategies in Sweden (published, see here), Austria, Germany, Sweden, the US (reports of last three are upcoming), and the report disucssed here, the North Sea region. The case study reports will be used in input to modeling work in future activities of the Task, to be reported during the 2025-2027 Triennium period of the IEA Bioenergy activities.

Case study report on North Sea Region

This case study report by IEA Bioenergy Task 40 (Deployment of biogenic value chains and carbon management) evaluates the North Sea region for its critical role as a major hub for energy-intensive industries and trade, and for its extensive energy infrastructure. A key challenge facing this region is the so-called re-emergence of distance, where the high cost of transporting dispersed, low-energy-density renewable resources, such as biomass and hydrogen, replaces the low transport costs of centralized fossil fuel supply chains that have shaped its past development.

Download the full report “Renewable fuels from biomass and hydrogen in the North Sea Region”

The clustering of advanced biofuel production and renewable hydrogen supply could become increasingly important for cost-effective decarbonization, particularly in hard-to-abate sectors such as aviation and maritime transport. Hydrogen is already crucial for producing Sustainable Aviation Fuels (SAF) through pathways like hydrotreated esters and fatty acids (HEFA). Looking ahead, electrofuels (e-fuels) consistently show very high hydrogen requirements, while advanced biofuels like Alcohol-to-Jet (ATJ) and Hydro-processing of bio-based waste oil and fats require moderate amounts. This difference highlights a trade-off: pathways with high carbon efficiency often require significant hydrogen input.

European Hydrogen Backbone

The planned European Hydrogen Backbone (EHB) network and associated electrolyzer projects could connect production hubs with industrial consumers and support climate-neutrality targets. However, it demonstrates significant spatial disparity. The network is densest in Western Europe (Germany, the Netherlands, and Belgium), leveraging repurposed natural gas pipelines and large-scale salt cavern storage. In contrast, regions like Scandinavia and the UK have much less developed infrastructure, suggesting that decentralized, on-site hydrogen production may become a competitive necessity there. Furthermore, a detailed cost analysis in Denmark (Jutland) showed that, while centralized pipeline delivery is currently the most cost-effective option, onsite hydrogen production with storage could become the most competitive option by 2050. This suggests that access to low-cost green electricity may become as important as access to hydrogen infrastructure.

Significant misalignment

Finally, a significant misalignment exists between the large projected hydrogen demand for advanced biofuels and synfuels by 2050 and the minimal designated allocation for these sectors in current electrolyzer projects, which overwhelmingly prioritize other industries, including chemicals, steel, and power. This misalignment, alongside uncertainty stemming from feedstock availability, green hydrogen supply, and policy efficacy, constitutes a major threat to the successful scale-up of the renewable fuel sector and the energy transition in the North Sea region.

Key findings for policy makers

• As a hub for energy-intensive industry, the North Sea region faces the “re-emergence of distance.” Unlike fossil fuels, renewable resources like biomass and hydrogen have low energy density, making transport costs a primary economic hurdle.
• To mitigate these costs, the clustering of advanced biofuel and renewable hydrogen production is essential for decarbonizing “hard-to-abate” sectors like aviation and maritime.
• A critical risk identified is the misalignment between future demand and current investment. While 2050 targets rely heavily on advanced biofuels and synfuels, current electrolyzer projects primarily allocate hydrogen to the steel, chemical, and power sectors. This gap, combined with uncertainties in feedstock availability and policy efficacy, poses a major threat to scaling renewable fuels in the North Sea region.