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National Activities - UK
Crops for Industry and Energy - a report of a study sponsored by the Ernest Cook Trust, UK |
INTRODUCTION AND CONTEXT
This document reports on a study to assess the technical and economic prospects for growing crops to provide fuels and industrial feedstocks in the UK.
The issue most immediately behind this enquiry is the increasing area of 'land surplus to present requirements for food production in the UK, combined with reforms of the Common Agricultural Policy designed to control the surplus production and reduce budgetary costs. As a consequence, policies affecting agriculture and land use have undergone a period of considerable change. The situation has serious implications for farm incomes and farm businesses, and rural employment and rural society. These 'problems' also present opportunities to use resources in new ways.
A second part of the context of this study is the gamut of environmental issues that impinge on nearly every dimension of society and enterprise. These also present farmers and industrialists with both problems and opportunities.
A third element in the context refers to supplies of fossil fuels, the main sources of both energy and industrial raw materials. Long term projections of resource availability emphasise the need to identify and develop alternatives, but unexpected price increases and supply interruptions have, at least in the past, provided a more urgent impetus to seek new and renewable feedstocks
These factors all enhance the scope for growing industrial and energy crops. This is further enhanced by the many technical developments relating both to crop production and industrial and energy technologies.
The study used a combination of a review of literature and consultation to prepare a draft report. This was then subjected to the scrutiny of 16 experts at a workshop in February 1994. The final version incorporates comments made at the workshop, and material obtained subsequently.
HIGH VALUE, LOW VOLUME PRODUCTS
Valuable products can be derived from secondary, or in a few cases, primary plant metabolites, or obtained via fermentation or chemical synthesis of plant-based substrates. The main markets for these are in pharmaceutical preparations, in crop protection and food preservation and as flavours and fragrances.
Plant derived substances are used as carriers and flavourings in pharmaceutical products. Many drugs are also of plant origin, and, while many more drugs are synthetic, there is a shift of interest towards 'natural' plant derived chemicals. In all, the industry uses about 600 different species of plant. The recent development of GLA from evening primrose exemplifies the possibilities for UK agriculture to supply the pharmaceutical industry. Other plant derived drugs, capable of being derived from crops grown in the UK, are 'on the horizon'.
Alternative therapies, notably aromatherapy, use plant volatile oils many of which could be grown in the UK. The market for these is growing rapidly. Plant volatile oils, together with other plant metabolites, also have potential uses in crop protection and food preservation. The fragrance industry appears unlikely to offer UK growers much opportunity, but there is a growing interest in, and use of, natural flavours by the food industry. Again, crops capable of growth in the UK could meet some of this demand.
Growing crops for these markets is unlikely to take up large areas of UK arable land, but could provide profitable enterprises for some growers plus up and down stream benefits.
There is, however, strong competition from overseas growers, many of whom benefit from well established relationships with users and technical and financial support from Government. The future of 'pharmaceutical crops' depends on the establishment of strong links between the pharmaceutical, health product, alternative medicine, cosmetic, plant protection and food industries and UK growers. A market survey across potential user industries and the development of a case and strategy for Government support are appropriate next steps towards the development of high value crops in the UK.
INDUSTRIAL OILS
The production of oilseed rape in the UK is well established. Oils for industrial use are already produced from high erucic acid and double low oilseed rape varieties. Greater use of these oils by industry may be possible. New varieties of oilseed rape, including genetically engineered 'designer' oilseeds, and the development of novel crops may expand the possibilities in the longer term.
Vegetable oils are already used widely by many industries worldwide. Supplies are dominated by high yielding tropical oils. The same industries also use mineral and animal oils, often moving between raw matenals in response to prevailing prices. Environmental and related concerns are effecting some movement away from mineral and animal sources towards vegetable oils.
The main actual and potential market sectors for vegetable oils are surfactants, lubricants, surface coatings and polymers. Surfactants are the largest market, but one in which the competition from tropical oils is likely to be most fierce. Lubricants from vegetable oils are particularly interesting in total loss systems, notably chain bar oils and drilling muds. This is due to their high biodegradability relative to mineral oils. The use of vegetable oils in paints and inks has already advanced, and there appear to be good prospects for the development of products incorporating UK produced oils. Vegetable oil derived chemicals are already used in polymers as slip and anti block agents, and they can also provide reactive ingredients.
While there seems to be potential for growing and using industrial oilseed crops in the UK, there are many constraints. These include: competition from tropical oils, land availability for oilseed rape, limitations on meal production from Set aside land under the Blair House Agreement, legislation regarding Genetically Modified Organisms (GMOs), the cost benefit ratio of plant breeding programmes, and the national oilseed crushing capacity.
The possibilities for crop production and new varieties are well understood. What is needed is an investigation of industrial markets. The Centre for Agricultural Strategy is currently conducting such an investigation, with funding from MAFF and the HGCA, as part of the 'LINK Crops for Industrial Use Programme' .
SUGAR AND STARCH AS INDUSTRIAL FEEDSTOCKS
Sugar and starch for industrial use can be derived from the most widely grown conventional crops in the EU (sugar beet, cereals and potatoes). In the longer term, novel crops (eg Jerusalem artichoke and quinoa) and lignocellulose could provide alternative resources. In all cases, biotechnology should facilitate crop development.
Sugar and starch are already used by several industries in the EU. Since 1986, EU policy has enabled such users to obtain raw materials at world prices. The present use and future prospects for industrial use of these crop products are as follows:
Present industrial applications of starch in the EU use approximately 1% of the exploitable agricultural area. If recent annual trends were to continue this area would increase to approximately 1.5% by the year 2000; if the average growth in use rate doubled the corresponding value would be about 2.5%. The potential to take up large areas of land with crops grown for starch and sugar is, therefore, limited, but further development of industrial uses of these products could enable these crops to make a significant impact along with other industrial crops, on land use.
FIBRES
Plant fibres for industrial use can be derived from fibrous crop by products (ie cereal and oilseed straws), established fibre crops (eg hemp, flax) and novel fibre crops (eg short rotation coppice, Miscanthus, broom, forage rape and nettles). Yields and fibre characteristics vary. Hemp, flax and nettles produce good quality, long fibres, but are relatively low yielding. Coppice, Miscanthus, oilseed rape and cereals give higher yields of short, poorer quality fibres. Linseed and forage rape occupy the 'middle ground'.
Paper and board are, by far, the largest potential markets for fibre crops in the UK. Demand for these products is growing steadily. These industries are supplied by wood, most of which is imported at an annual cost of approximately £4.8 billion. Wood is traded freely, however, and fibre crops would need to provide raw materials of equal quality for less than approximately £70 per t DM. The most immediate prospects are for fibre crops to provide a proportion of the input to existing wood processing facilities. For both technical and economic reasons, board manufacture is much more promising in this respect than pulping. Technical problems would need, nevertheless, to be overcome. These relate to the low density, heterogeneity and seasonality of supply of fibre crops relative to wood.
One way of overcoming these problems would be to establish new processing plants specifically to use crop fibres. The enormous capital costs, the present price slump in the pulp and paper industry, the increased use of recycled paper, fierce overseas competition and technical constraints are likely to inhibit private investment in crop based pulping. The possible longerterm benefits to agriculture and employment may, however, merit Government support (particularly as an outlet for straw). The national costs and benefits of such a scheme need to be assessed. The prospects for new, crop based board manufacturing facilities are better than for pulping: the economic scale of operation is smaller, and there would be fewer technical problems associated with using crop fibres.
These markets would need to be supplied by low cost raw materials from high yielding crops and crop by products. Quality fibre crops, such as hemp and flax, are unlikely to provide feedstocks at competitive prices given current yields and production costs. They may, however, find outlets in niche markets, for example, for specialist papers.
The second potential market for fibre crops is as substitutes for man made fibres (ie carbon, glass, kevlar). Research and development are creating many technical possibilities for producing biocomposites using plant fibres. These could both substitute for man made fibres in existing applications, and expand into new areas, where their advantages of biodegradability and ease of recycling would impart a competitive edge over the materials currently used. There are problems relating to the water reactivity, heterogeneity and the wide diameter of plant fibres relative to man made fibres, but solutions to these are being found. These markets are a great deal smaller than paper and board, but are potentially more lucrative. Given the quality requirements and the higher prices that might be paid, these markets would be supplied by quality fibre crops (ie hemp and flax), although biocomposites based on lower quality, cheaper fibres (eg linseed and oilseed rape straws) can be envisaged. Development in the market area is being and, seems likely to continue to be, conducted by individual companies under a cloak of secrecy. They will buy fibres on the basis on price and availability, but there may be scope for constructive partnerships with growers.
A third market area for fibre crops arises from the scope to impart special characteristics to plant fibres by chemical modification. One interesting development is a modified fibre capable of soaking up thirty times its own weight in spilled oil.
LIQUID BIOFUELS: BIOETHANOL
The technologies to grow starch and sugar crops and convert them into bioethanol are well established. Starch and sugar crops (ie cereals, potatoes and sugar beet) occupy most UK and EU arable land, their production systems are fully developed and yields have increased considerably over the last few decades. In the future, novel crops, notably Jerusalem artichoke, some of little value as food, may provide even higher yields of fermentable feedstocks at lower costs.
Fermentation technology is available 'off the shelf'. Advances have been made recently with regard to energy efficiency and by product recovery.
Bioethanol can replace, or be blended with, petrol, or be converted to ethyl t butyl ether (ETBE) and used as an octane enhancer. Use of pure ethanol in place of petrol necessitates some engine modification, and it is not then possible to alternate between the two fuels. The use of bioethanol in petrol engines has been demonstrated by large scale programmes in the USA and Brazil .
At present costs and prices (notably of oil), the production and use of bioethanol is not viable. A subsidy would be required or oil prices would have to increase considerably. Estimates of the bioethanol:oil cost ratio range from three to six. Very approximate estimates of subsidies required range from 20p to 55p per litre of bioethanol or £400 to £2000 per ha. The economics of bioethanol production are complex. Changes in production and processing parameters, and input costs and by product values, will have a strong influence on final costs.
By product use and value are particularly important determinants of the net costs of bioethanol production. By products arise from both crop production (eg straw) and the fermentation process (eg distillers dried grains with solubles (DDGS), gluten). Combining the production of bioethanol from wheat grain and electricity from straw, and the maximum recovery of fermentation by products, looks a particularly promising scenario.
The case for subsidies rests on benefits to the agricultural economy and to the environment, notably in terms of the abatement of greenhouse gas emissions. Depending on the fuels used in production and processing, greenhouse gas emissions from bioethanol can range from about one third to the same or even more than those from petrol. Apart from giving lower sulphur emissions than petrol, the benefits of bioethanol in terms of improving urban air quality are somewhat unclear.
The potential overall contribution of bioethanol to petrol consumption and, hence, to reducing emissions of greenhouse gases and other pollutants, is, however, modest. The total 1993 Set aside area could substitute for about 4% of UK petrol consumption. Favourable prices might enable crops grown on non-Set aside land to be used, thus increasing the contribution. The total UK arable area could supply, theoretically, about 34% of national petrol consumption.
Whether or not the benefits to Society arising from bioethanol production merit the provision of what would need to be substantial subsidies has yet to be determined. The calculations by the CEC that preceded their proposals for much reduced excise duties on liquid biofuels must have concluded that net benefits would arise. A full cost benefit analysis of bioethanol production in the UK may be merited. This would need to take into account effects on both the economy and the environment, and include comparison with other biofuels and other means of achieving similar goals.
LIQUID BIOFUELS: BIODIESEL
The technical potential to produce and use biodiesel in the form of RME appears established, and has been clearly demonstrated by programmes in other countries, notably Austria and France. Oilseed rape is widely grown and its agronomy well understood. The main constraint on the crop's expansion in area is its susceptibility to pests and diseases and its consequential rotational requirements. Several other crops also produce oils, and may have some potential in the longer term. Pressing and processing rape oil to RME has been developed and demonstrated at full industrial scale. Use of RME in diesel engines seems to present only a few minor, surmountable problems.
At present mineral diesel, rapeseed, glycerine and rape meal prices, RME production and use are not viable without a subsidy of approximately 10 - 20 p per litre. Proponents of biodiesel argue that such a subsidy is justified by the benefits that would be provided in terms of job saving/creation, reduction of greenhouse gas emissions and environmental damage caused by spillages, and improvements in urban air quality. However, estimates available indicate that greenhouse gas emissions from biodiesel are unlikely to be less than 30% of emissions from diesel. Using biodiesel instead of diesel would clearly improve urban air quality at least in some respects, but the extent of this compared with the potential impact of other measures is unclear. RME is a great deal more biodegradable than diesel and, hence, much less polluting, except in cases of large volume concentrated spills where its high BOD would probably reverse the situation.
The economics, greenhouse gas benefits and energy ratios of RME production are most favourable when all by products, including the straw, are used. Systems combining electricity production from straw with RME production from oil look particularly promising in these respects.
The potential overall contribution of RME to diesel consumption, and hence to reducing emissions of greenhouse gases and other pollutants, is, however, at best modest. The total 1993 Set aside area would supply about 6% of UK diesel consumption, but rotational and other constraints would probably reduce this to no more than 1%. The preference is, therefore, to aim the product at niche markets such as use in power boats, chain saws and other engines used in environmentally sensitive areas and in urban areas particularly adversely affected by diesel exhaust emissions.
Whether or not the benefits to society arising from a biodiesel programme of this scale and nature merit the provision of subsidies has yet be determined. Studies in other EU countries suggest that the net benefit of subsidised biodiesel production to the national economy is positive. An appropriate next step might be to conduct a full cost benefit analysis of biodiesel production for the UK. This would need to include a comparison of biodiesel with other biofuels and other means of attaining the same ends.
SOLID BIOFUELS: ENERGY COPPICE
Energy coppice has been the subject of research and development for over 15 years, both in the UK and overseas. While the technologies to grow and use energy coppice cannot be regarded as fully established, they have advanced considerably and have been successfully demonstrated at full scale. This is partly due to the high level of interest and support in energy coppice on the part of the UK Government relative to other industrial or energy crops.
Poplars and willows are the most promising species. High yielding clones bred for biomass are being developed; some are already available and being tested. Planting, weed, pest and disease control, fertilising and harvesting have been investigated; management strategies and technology developed as appropriate. Purpose designed planting and harvesting machinery is becoming available. Weeds and pests have proved a greater problem than anticipated, and high inputs of agrochemicals may be necessary.
Expected crop yields, at present, are 8 - 12 t DM per ha per year. Yields of more than 15 t DM per ha per year are anticipated, given further development. The main disadvantage of the feedstock is its high moisture content at harvest (approximately 55%) necessitating drying or reducing combustion efficiency.
Technologies to use energy coppice are at various stages of development. Conversion processes include direct combustion, gasification, pyrolysis, direct liquefaction and hydrolysis and fermentation. Possible outputs include heat, electricity and gaseous, liquid and solid fuels. The most interesting possibility for large scale use of energy coppice is electricity generation. Smaller scale local uses are likely to centre on combustion for heat or CHP Systems.
Most economic analyses conclude that energy coppice is not viable without a subsidy. Two types of subsidy are already available: a payment to the grower in the form of either Set aside payments or a WGS planting grant; and the tariffs offered under NFFO contracts (which represent a potential effective subsidy equivalent to very approximately £659 per ha per year). Despite these, there are indications that growing energy coppice for electricity generation is only marginally profitable, if at all. The situation might alter if it were possible to use coppice as part of the feedstock to existing power plants, rather than invest in expensive new facilities. This would require, however, both technical and regulatory changes.
Subsidies for energy coppice are justified, primarily, in terms of longerterm saving of CAP budget costs and reductions in emissions of greenhouse gases. Certainly, energy coppice appears to offer appreciably greater abatement of greenhouse gas emissions than liquid biofuels. The net agricultural benefits have yet to be evaluated. In common, with other industrial and energy crops, a full cost benefit analysis of energy coppice production and use is needed, incorporating comparison with other means of attaining similar ends.
SOLID BIOFUELS: FUEL CROPS
Solid fuel crops represent the most immediate alternative (or complement) to energy coppice, offering several advantages. The main options are whole-crop cereals and Miscanthus. Advantages of the former over energy coppice include: reliance on existing, well established species, production systems and machinery; annual production and, hence, flexibility; a drier feedstock at harvest (approximately 18% moisture as compared with 55%); and a more immediate return on investments. Claimed advantages of Miscanthus over energy coppice include: higher yields; drier feedstock at harvest; annual production; fewer weeds, pests and diseases and relative ease of weed control using C3 specific herbicides. Miscanthus is, however, similar to energy coppice in requiring a longer term commitment and leaving rhizomes in the ground which would require removal, as would coppice stools. The technology to grow whole crop cereals is well established. Harvesting and storage would be as developed for large scale industrial use of straw. Miscanthus is at a very early stage of development. Envisaged use of these crops is as for energy coppice.
In common with other biofuels, solid fuel cropping would not be viable without a subsidy. At present Set aside payments and NFFO tariffs are theoretically available. Estimated product costs and Gross Margins from solid fuel crops are comparable or better than those from energy coppice. Solid fuel crops have the advantage of providing more immediate and annual returns. Combined production with other biofuels (eg ethanol from wheat grain, electricity from wheat straw) looks particularly promising.
Subsidies are justified on the same basis as for energy coppice, although the benefits it terms of greenhouse gas emissions abatement are likely to be slightly less from annual crops than perennials.
Solid fuel crops, particularly whole crop cereals, have received much less attention than other biofuels, yet they appear to offer a number of advantages. A more detailed investigation of these, including of experience in other countries, notably Germany, is merited.
© Copyright 2006 Policy Statements
Updated
by CPL Press:
03/07/2007
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