Center for Advanced BioEnergy Research, University of Illinois at Urbana-Champaign

Wednesday, August 1, 2007

European Farmers May Also Benefit From BioEnergy

It's not only American farmers that stand to benefit from the biofuels boom, European farmers are also looking to capitalize on this growing industry:

According to a report released yesterday (31st July) by the European Commission "Bioenergy production represents one of the major main stream opportunities for agriculture over the medium to long term in the EU". The report, which looks at the prospects for agricultural markets within the EU, continues by saying; "The 10% incorporation rate realised over this long period until 2020 together with newly available technologies assures a sustainable path in providing the EU with renewable transport fuels without disrupting domestic and world markets. Imports would serve around 20% of the biofuel production. About half of them would be first generation feedstock and mainly oilseeds and vegetable oils."

The report estimates that under a 10% minimum obligation about 59 mio t of cereals or about 18% of domestic use would be used as first and including straw also as second generation feed stock. Most of the cereals used would be soft wheat and maize, the rest would fall mainly on barley. The projected yield increases of about 1% per year would lead to 38 mio t more cereal production in 2020 than currently seen. Moreover 2 mio ha of additional cereals grown on set aside land could provide some 14 mio t.

It continues; "Domestic use of cereals would significantly increase while exports would decrease over time. Cereal prices would appear stable and reach 120 EUR/t in real terms or 150 EUR/t in nominal terms. Maize prices would be significantly above intervention prices following the increase of domestic use and the subsequent real stabilisation of the cereal price complex. The long run impact of biofuels on cereal prices is in the range of 3% to 6% as compared to 2006 prices. The second generation biofuel production would reach about a third of the domestic biofuel production largely by incorporating the straw and wood Prospects for agricultural markets and income in the EU based cellulosic material into production. Of this wood based materials some imports of 1.75 mtoe equivalent could be expected. "

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