10.05.2005 / hamburg2/enfa-workshop folie 1 european non-food agriculture e n f a university of...
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European Non-Food AgricultureE N F A
University of Hohenheim, Germany,Jürgen Zeddies and Oliver Henniges
Kick-off-MeetingMai 9th – 11th 2005
Hamburg, University
Work Package 25 Bioethanol and Biodiesel
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• Cost and potential of bio ethanol and biodiesel• Regional dimension
• EU-15, NUTS 2• Different raw materials
• Wheat, sugar beets, maize, potatoes
Proposed activities in the application
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• Farm accountancy data network (FADN) of EU-15 (1997- 2002)• Data available • About 60 000 farms
• Calculation of gross margins (ARACOST)• Accomplished by standard data for sugar
beet• To be completed for wheat, maize, others
Methodology
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• Type of model already available • Comparative static approach
• Results: variable cost, opportunity cost, marginal cost for different raw materials
• Time dimension• Base 1997 – 2002• Reference 2008• Prognoses up to 2020
Cost of raw material
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• Biodiesel: RME and by products for Germany• Bioethanol: distinguished by different raw
materials, and technical processes (DDGS, biogas)• For Germany • For main competitors worldwide
Cost of conversion
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• Raw material (oilcrops, cereals, beets)• Regional dimension
(Germany, EU-15, and EU-28)• Assessment of supply elasticities
Assessment of production potential
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• National markets (Germany)• EU domestic market• World market
Markets for biofuel
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• Which kind of raw material should be considered? Potatoes? Sunflower ? Soy beans?
• Can other lines for biofuel be ignored (sun fuel)?
• Regional dimension: EU-15 or EU-28?• Definition of time horizon (base, reference,
prognoses?• Should greenhouse gas emissions in conversion
processes considered as well?
Open questions for the study
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Folie 9
• German Ministry of Environment …. “Cost and potential of biomass”
• German Ministry of Environment ….“Macro economic study of biomass for energy”
• Oliver Henniges: “Bioethanol – Worldwide analyses of competitiveness”
• DFG-Project Zeddies: “Mitigation strategies for green house gas emissions in agricultural”
Links to other projects
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• Data flow• Potential for biomass from agriculture
• Germany• EU-15 and EU-28• Biodiesel (RME)• Bioethanol
• Production cost international • World trade / world production• World market price• Models for bio fuel markets
First results
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Folie 12
Supply elasticity in der EU 15
Increase on Price level
Cereals Oilcrops Sugar beets
partial aggregated partial aggregated aggregated
0 - 10 % 1,31 0,65 2,97 2,33 2,8
10 – 20 % 0,0157 -0,010 0,05 -0,13 1,34
20 – 30 % 0,0136 -0,022 0,03 -0,11 1,23
30 – 100 % 0,0057 -0,010 0,016 -0,13 0,59
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Folie 13
Supply potential for energy crops in Germany (base 1000 t)
cereals oilcrops sugar beets total
base base change in production
base change in production
base change in production
base 42391,32 3923,42 26751,8 73066,57
base with put set aside
1029,1 1110 3643,28 5782,38
Without surplus production - wheat and rye - beet and milk
-5560 -562
-- -259,49
-8340 -4389
13900 5210,49
total 42391,32 7151,1 3923,42 1369,49 26751,8 16372,28 24892,87
change in production in %
16,9 34,9 61,2 34,1
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Folie 14
Supply potential for energy crops in EU-15 (base 1000 t)
cereals oilcrops sugar beets total
base change in production
base change in production
base change in production
base 201456 12812 1135,33 327801
base with put set aside
11250 3084 15960 30294
Without surplus production - cereals - beef and milk
-26106 -5840
-- --
-30174 --
56280 5840
total 201456 43196 12812 3084 113533 46134 92414
change in production in %
24,1 24,1 40,6 28,2
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Folie 15
Angebots-/Nachfrage-M enge
Preis [¢/l]
Verbraucherpre isfür B enzin
50
Im portE infuhr-G etre ideZuckerrübe
Eth
an
ol-
Nac
hfr
ag
e
Im portkontingentf. zo llfr. E thanol
In landsgetr.
(z o llfre i )
Ethanolherkunft
Ethanol-Angebot
fre i Tankste lle
Im porte thanol
(verzo llt)
Im po rtethanol-Angebot
E thanolangebo t
fre i Ra ffin
erie
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Folie 16
Angebots-/Nachfrage-M enge
Preis [¢/l]
Verbraucherpre is
für B iodiesel
50
Stillegungsfläche500 Tsd. t
G etre ide500 Tsd. t
Treibstoffherkunft
2 %
de
s D
iese
lver
bra
uch
s
Angebot frei A bnehm er
frei Verbraucher
Im port
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• Share of renewable energy of primary energy consumption in 2010 up to 12 %
• Similar goals in member states• Various initiatives in member states to reach
these goals
• Germany: Renewable Energy Law (higher price for supplier)
• Exemption from mineral oil tax
Biomass for energy ?Political decisions in EU
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• Wood• Agricultural by products (straw)• Liquid energy from crops
(bio diesel/RME, ethanol• Biogas
Resources
Heating facilities for wood pellets
Folie 19
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Biomass from:
• Wood, primarily old wood from buildings
• Agricultural by products (straw)
• Liquid bio energy
• Biogas
Markets for bio energy- Electric Energy -
0
10
20
30
40
50
60
70
80
90
100
110
120
2000 2001 2002 2003 2004
Anla
genanza
hl [
–]
0
100
200
300
400
500
600
700
800
900
Leis
tung [M
W]
Kleiner als 5 MW Größer als 5 MW
Leistung
Biogene Festbrennstoffe
Electricity plants for biomass
Folie 21
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0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2 200
1999 2000 2001 2002 2003 2004
Anla
genanza
hl [
–]
0
20
40
60
80
100
120
140
160
180
200
220
240
260
Leis
tung [M
W]
Größer als 500 kW 70 kW bis 500 kW Kleiner als 70 kW Leistung
Biogas
Electricity plants from biogas
Folie 22
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Folie 23
• Bio diesel from oil crops
• Ethanol
• Synthetic fuel (biomass to liquid)
• Biogas
Markets for bio fuel
0
200
400
600
800
1 000
1 200
1996 1997 1998 1999 2000 2001 2002 2003 2004
Pro
dukt
ionsk
apazi
tät bzw
. A
bsa
tz [1 0
00 t/a
]
J ährlich installierte Kapazität
Gesamte installierte Kapazität
Biodieselabsatz
Biodiesel
Bio diesel plants capacity
Folie 24
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Folie 25
Bio fuel in Germany
• 2004 only rape seed oil (RME) as poor fuel
• About 1.2 mio t from about 750.000 ha
• Little natural rapeseed oil in tractors
• 2004 three factories are producing ethanol from cereals
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• Kyoto Protocol CO2 reduction
• Energy (in-) dependence
Concrete EU target regarding biofuels:
5,75 Energy-% in 2010
Further Challenges:• Jobs in rural areas• Market relief for agricultural commodities• Alternative incomes for farmers• Maintenance of sugar beet cultivation
Why Bio ethanol?
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Folie 27
Why 100 % Tax Reduction in D?
EU Commission agreed with tax exemption, since
Production Costs = 69 Cent/l
107 Cents/l
= Gasoline price at that time
No further calculations cited
Officially no overcompensation of production costs difference
only 65 % volume based energy density
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Tax Relief in the EU
Valid untilCountry [%] [EUR/hl] [Year]
Germany 100 65,45 2009
Sweden 100 52,50 2008
Spain 100 39,60 2012
France 63 37,00 -
UK 42 33,00 2010
Relief
Source: FO Licht, Ethanol Production Costs – A Worldwide Survey
Bio ethanol Requirements
EU Directive 2003/30 EG
Share of renewable energy in fuels in
2006 2,00 % (+0,75 % points/year)
2011 5,75 % ( 8,8 Vol.-% )
For Germany that means:
Gasoline consumption 2003: 25,7 Mio t
2,00 Energy % 10,5 Mio hl 5,75 Energy % 30,3 Mio hl
Folie 29
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Required LandAssumption: 5,75 energy-% ethanol blend
Potential ethanol demand EU-25 (acc. to COLBERT): 132 mln hl• Cereals 85 %: 112 mln hl• Sugar beet 15 %: 20 mln hl
Raw material requirement:• Cereals 31,8 mln t• Sugar beet 19,9 mln t
Required land 6,4 mln ha• Cereals 6,1 mln ha• Sugar beet 0,3 mln ha
Total agricultural area EU-25: 167 mln haSet aside area EU-25: 7,0 mln ha
Data according to COLBERT, D: EU Need for Biofuel Import? FO Licht World Ethanol Conference 2004, London, 9. Nov. 04
Folie 30
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World Production by Country
Source: Dr. Christoph Berg, FO Licht, World Ethanol Conference 2003
EU need in 2010: 130 mln hl
Folie 31
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International Trade
4.16 mln hl
4.77 mln hl
Now: 1
.5 m
ln h
l
Plann
ed M
erco
sur C
ontin
gent
12
mln
hl
Source: FO Licht, Germany
For comparison:
World Production 400 mln hl
CBI: 2.66 m
ln hl
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Folie 33
Bio ethanol in Germany
today...
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Production Costs Germany
Assumptions:• Multiple feedstock plant
a) 0,5 mln hl/yearb) 2,0 mln hl/year
• Raw materialBeet campaign (90 days): beet juiceRest of year: wheat 64 % ethanol from wheat, 36 % from beet
• Wheat Price: 100 €/t Beet Price: ?
Production Costs Germany(pWheat = 100 €/tincl. transport)
Folie 35
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Please contact Prof. Zeddies (zeddies@uni-hohenheim)
or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
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Beet Price?
Please contact Prof. Zeddies (zeddies@uni-hohenheim)
or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
Production Costs in D(pWheat = 100 €/tincl. transport)
Folie 37
Please contact Prof. Zeddies (zeddies@uni-hohenheim)
or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
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Folie 38
Bio ethanol
in
Brazil
Brazil
Folie 39
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Please contact Prof. Zeddies (zeddies@uni-hohenheim)
or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
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Folie 40
Production Costs Bio ethanol BR
Please contact Prof. Zeddies (zeddies@uni-hohenheim)
or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
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Folie 41
Production costs Brazil (2003)
14 €/hl !
Please contact Prof. Zeddies (zeddies@uni-hohenheim)
or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
Bagasse Burning
Folie 42
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Please contact Prof. Zeddies (zeddies@uni-hohenheim)
or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
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State Support in BR
• Mandatory blending
20-25 Vol-% depending on market situation
• Tax reduction (2003)
Gasoline: 30 US-Cents/l
Ethanol: 17 US-Cents/l
• Small car tax reduction
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Bio ethanol in Brazil
• Low feedstock costs
• Largest producer worldwide
• Large potential for expansion
• Large-scale facilities for export exist
• Rising demand by Total Flex Cars
Serious competitor for EU production
International Comparison of Production Costs
Folie 45
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or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
Competitiveness against Gasoline in Germany
Folie 46
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or Oliver Henniges (henniges@uni-hohenheim)
for further information regarding this slide
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What about the competition of biomass for nutrition and energy?
• 1. Relevant variables• The demand for nutrition
• Population growth• Per capita consumption
• The world market prices for agricultural commodities• The supply elasticity for biomass
• 2. Expectations for the next 20 years• population growth
• World 1.1 %• EU 28 0.3%
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Price developments
• 1. Oil price• Increase of ca. 50 % in 25 years• Absolute 18 to 28 US $
• 2. Cereals• Increase of 10- 20 % in 15 years
3. Oilseeds• Decrease of 13 to 27 % in 10 years
4. Sugar• constant
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Production and agricultural surpluses in EU
• Food demand + 0,3 %/year• Production + 1.5 to 2 %/year• Set aside land 5 to 7 %• Potential relief of land from surplus production 5%
Total balance of land for biomass in EU 25 • in 10 years about 22 %• In 20 years about 35 %