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Energetic, economic and ecological balances of a combined food and energy system
PII:
Biomass and Bioenergy Vol. 15, Nos 4/5, pp. 407±416, 1998 # 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0961-9534/98 $ - see front matter S0961-9534(98)00047-6
ENERGETIC, ECONOMIC AND ECOLOGICAL BALANCES OF A COMBINED FOOD AND ENERGY SYSTEM BERND KUEMMEL%*, VIBEKE LANGER%, JAKOB MAGID$, ANDREAS DE NEERGAARD% and JOHN R. PORTER%* %Agro-ecology Group, Department of Agricultural Sciences, The Royal Veterinary and Agricultural University (KVL), Agrovej 10, DK-2630 Taastrup, Denmark $Laboratory for Plant Nutrition, Department of Agricultural Sciences, The Royal Veterinary and Agricultural University (KVL), Thorvaldsensvej 40, DK-1871 Frederiksberg, Denmark AbstractÐAgriculture is one of the industries most exposed to climate change and is also a contributor of anthropogenic CO2 emissions to the atmosphere. In this paper we describe an integrated agricultural system with the goal of neutralising the energy-related CO2 emissions from agriculture by substituting fossil with biofuel energy produced on mandatory set-aside areas. We show that such a system can be economically viable both from a farmer's point of view and from a social point of view, and that the introduction of biofuel production on a local scale can have bene®ts apart from energetic and climatic aspects. The net reduction of CO2 emissions is equivalent to an externality bene®t of about 300 Euro per hectare, an amount equivalent to the current set-aside payments for Denmark. # 1998 Elsevier Science Ltd. All rights reserved KeywordsÐBiofuel; agroforestry; ecological farming; externalities; social costs; set-aside support; economic viability; greenhouse eect.
1. INTRODUCTION
Since the start of the industrial revolution atmospheric concentrations of CO2 and other so-called greenhouse gases have been rising.1 The associated radiative forcing2 from the enhancement of the greenhouse eect is currently about 2.7 Wmÿ2. It is now considered certain that the eects of this radiative forcing on the world's climate are already detectable.3 The rise in the atmospheric CO2 concentration can only be stopped if anthropogenic emissions are reduced to amounts much lower than today's levels.4 Agriculture is not only a sector especially exposed to natural climatic variability5 and anthropogenic climate change,6,7 it is also a contributor to the increased radiative forcing by emitting CO2 and other greenhouse gases into the atmosphere.8,9 For example, agriculture is responsible for 3.7 percent of the total fossil fuel related CO2 emissions in Germany;8 at the same time agricultural GNP is only about 1.55 percent.10 This means that German agriculture has sector-speci®c CO2 emissions more than twice the national average. This *Corresponding authors: [email protected] or [email protected] 407
puts emphasis on agriculture to reduce its emissions, despite the fact that it may seem to use a small amount of the total commercial energy. Agriculture's share of the CO2 emissions may be reduced by reducing the energy demand for given activities, i.e., by improving the energy-use eciency.6 Another possibility is to use set-aside areas for the production of solid biofuel11 to substitute fossil energy with renewable, CO2-neutral energy, such as solid biofuel in the form of wood, which this article focuses on. We present a combined food and energy (CFE) system and look at some of the energy, economic and environmental consequences of it. The result shows that it is possible to provide areas for biofuel production, at least in the European Union (EU) where there is a surplus production of certain agricultural products. This surplus production strained the EC budgets and led to the change in agricultural support schemes. In 1992 the EU enacted setaside regulations and reformed the Common Agricultural Policy to put more emphasis on environmental protection.12 Farmers in the EU are now requested to set-aside part of their total area and not use it for producing food or fodder.13
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Non-food products are allowed to a certain degree. They qualify for set-aside payments in the form of refunds, calculated on an area basis and depending on the product grown in the ®eld. Solid biofuel is a legitimate set-aside product.13 The CFE system is a temperate agroforestry system which would absorb CO2 from the atmosphere.14 The basic idea is that the biofuel produced on the set-aside areas should substitute at least as much fossil energy as is consumed in the direct and upstream agricultural part of the scheme; this also includes the energy used in harvesting and transporting the biofuel. This substitution of fossil with biofuel energy neutralises the fossil CO2 emissions from agricultural activities.15,16 The Danish CFE system is managed according to ecological practices which are called ``organic'' in ocial EU parlance.17 Neither mineral fertilisers nor synthetic biocides are
employed in the system. In particular, the reduction in mineral fertiliser application minimises the indirect energy demand of the farming scheme.18 We continue with a description of the CFE system, the calculation of the energy balances within it, examples of the consequences of its more widespread realisation and the conclusions. 2. CFE SYSTEM DESCRIPTION
Various experimental CFE schemes are currently being investigated in Europe. The ®rst of these to be established is at the research station of the Danish Royal Veterinary and Agricultural University (KVL). The Danish CFE system (Fig. 1), consists of short rotation coppice (SRC) biofuel strips separating ®elds used for crop production, similar to agroforestry systems that have been proposed for the tropics.19 The CFE is an application of the
Fig. 1. Field Design and Layout of the CFE system at KVL-Taastrup, Denmark. The ®elds are separated by biofuel strips. In the experimental scheme at KVL the distance between the biomass strips varies between 50 and 200 meters, partly to investigate whether there will be some measureable eect of the biomass strips on pest control and microclimate depending on the scale. The total area of the scheme is about eight hectares.
Energetic, economic and ecological balances of a combined food and energy system
agro-forestry idea to a temperate climate. A mixture of three willow species was chosen to minimise the risk of willow leaf rust attacks from the fungus Melampsora epitea.20,21 Stools (pieces of willow stem about 20 cm long) were planted in 0.7 m wide twin-rows with 1.3 m between each twin-row and an along-row distance of 0.5 m in a rectangular pattern. The willows occupy the central six rows. On the outer edges of the biomass strip there are twin-rows of either hazel or alder, and there is 1 m left to the food crops to allow machinery to turn. This means 18,700 stools per hectare biofuel strip; a planting density used for larger plantations.22±24 Theoretically even higher densities are possible by triangularising the stool pattern, which may have advantages with respect to light interception. In the Danish CFE system the biofuel share is about 11 per cent of the total experimental area. This is more than the present mandatory set-aside demand of 5 percent of the farm land,13 but the scheme was developed when the set-aside demand was 12 percent. The reduction in set-aside demand was due to a rise of the world market price for important agricultural products. A four-year rotation of spring barley undersown with clover, clover-grass, fodder beets and spring oats with a following catch crop has been established with equal shares of the ®eld area between the biomass belts. The almost two-year clover-grass ley reduces the energy needed for ®eld operations, as one season's ploughing is saved and is needed for fodder production and important for nitrogen and carbon ®xation. The catch crop is sown with minimal tillage. After the oats have been harvested, the ®eld is lightly harrowed and not ploughed. Instead of producing biofuel and crops in separate plantations and in monoculture, as is the case with most current agricultural and forestry temperate systems, the CFE exploits other eects of the biofuel strips. These are perceived to be: energy neutrality, increased plant and insect biodiversity, a shelter belt eect, the conservation of nitrogen and carbon, new revenue for farmers, an extensi®ed agriculture, a more varied landscape and a ``soft biofuel'' start. 2.1. Energy neutrality The system will not only have a low energy demand but it will at least balance its use of
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fossil derived fuels by its production of solid biofuel. This is currently the main objective of the CFE scheme. We examine the energy balance and economics of the CFE system in more detail later. 2.2. Biodiversity enhancement and microclimate improvement Biofuel hedges increase biodiversity through the conscious addition of a number of plant species. The degree of control is in¯uenced by the spatial arrangements of the food and energy crops. Assuming, for example, that the biodiversity eect could substitute for some chemical pest control, currently applied in industrialised agriculture, this would save energy for the production, transport, and application of such substances. An equivalent argument is applicable for the improvement of the microclimate. These changes mean a reduction in the total energy consumption of the CFE system. Less evapotranspiration rates by reducing windspeeds means less water loss and thus reduces the danger of a moisture de®cit. For the clover-grass and the beets any rises in temperature caused by the biofuel belts would mean a longer growing season, which might result in higher yields. Conversely, raising temperatures could shorten the growing season of the cereals. From the geometry of the CFE system (Fig. 1) it is easy to see how a farmer could bene®t from the direct and indirect economic eects of the biodiversity enhancement and the improvement of the microclimate. In some places such biofuel hedges can reduce windborne soil erosion. 2.3. Changes of nitrogen and carbon cycling The carbon and nitrogen cycles in the CFE system are perceived to be conservative. The eects of the rotation applied in the CFE system on the nitrogen cycling is being studied. It is hoped that nitrate leaching can be minimised by the choice of rotation elements and the use of catch crops. Carbon will be amassed in the below ground parts of the biofuel hedges.25 This is a means of stabilising the anthropogenic radiative forcing. The CO2 released from burning the biofuel is recycled during the life time of the biofuel hedge. As this biofuel energy substitutes fossil energy, there is a net reduction of CO2 emissions. The current set-up at the
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KVL results in an excess of oat straw, which could also be exploited for energy purposes.
Improvements in hunting opportunities is another aspect to be taken into consideration.
2.4. Exploitation of set-aside regulations
2.7. Soft biofuel start
Set-aside demands have been introduced as a means to cope with productivity surpluses arising in Europe and to extensify agricultural production. The exploitation of set-aside payments ensures the economic viability of this kind of biofuel production, as we show later. The biofuel strips qualify for set-aside payments,13 they lead to a new non-food product, thus improving the farmers' economy. If, because of budget restraints, demands to curb EU budgets were to decrease set-aside payments, whilst the mandatory set-aside area demand was kept, biofuel production would be attractive because of the generated revenue. 2.5. Extensi®cation of crop production Biofuel hedges are a means of extensifying agriculture both in terms of environmental as well as management aspects. Biofuel production is not energy intensive, and it leaves part of the land undisturbed for a longer period than with yearly fallow schemes. Another important aspect is the distribution of the work load over the seasons. Work demand for biofuel hedges is minimal, and occurs during o-peak load periods, opposite to green ®eld fallowing.26 2.6. Landscape aspects A widespread realisation of the CFE system would create a more varied landscape compared to large-scale monocultures. The biofuel hedges can become a valuable tool for improving the diversity and perception of a landscape. The system's spatial design makes it similar to the cultural landscapes prevalent in most parts of Europe until quite recently. The possibility exists of leading a spectator's eyes in directions that enhance the landscape experience; on the other hand the danger exists to spoil beautiful views,27 which has to be taken into consideration. Other inferred advantages arise from improvements in wild ¯ora and fauna. When more bird species occur in an area, as they ®nd breeding grounds and feeding opportunities in the hedges, it becomes more valuable for bird watchers and lay people. The eect of this indirect economic consequence can be inferred using a travel cost method.
An SRC plantation binds the land for a period of 20 or more years, and farmers are likely to be very reluctant to set-aside a major share of their area for such a long period. On the other hand, institutional biofuel users are dependent on long-term, and reliable, supplies of biofuels to ensure their investments' pro®tability. Only when this is the case, will they invest in a biofuel ®red power station or district heating plant.28 Farmers often appreciate the advantages of hedges, which many would like to reintroduce. With CFE they do not have to bind a large share of their land as is the case with a regular SRC plantation. Farmers can collect experience with biofuel production on a small scale and become acquainted with it. The CFE idea therefore enables a ``soft biofuel'' start and can pave the way for plantations. Their potential role in a future global energy system based on renewables is increasingly acknowledged by sections of the fossil fuel industry.29 3. ENERGY BALANCES
As described above the CFE system consists of ®eld areas divided by biofuel strips. The direct energy balance of the system includes cultivation activities in the ®elds, the planting and harvesting of the biofuel. Energy is also used to manufacture the engines and machinery used for production and the transport of machinery and equipment to the application sites. These indirect energy requirements have also to be included in calculating an overall energy balance. It is not within the scope of this paper to attribute the total upstream activities related to the extraction and use of primary energy and raw materials in the CFE system. We will use a simpler approach based on the primary energy equivalents of the machinery and equipment used and the energy consumed during ®eld activities. The system boundary allocation with respect to the indirect energy use is dicult to de®ne. One could argue that the production of the steel for an agricultural machine should not be included in the indirect energy calculations, because the steel did not have a use dedicated to agriculture when it was milled.30 From a
Energetic, economic and ecological balances of a combined food and energy system
life-cycle point of view it would be illogical to follow this assumption, as it ignores the simple fact that steel is necessary in all circumstances in today's technology, so this energy should be included. 3.1. Energy economy of the CFE system under simple assumptions We now want to establish the energy balance, starting with estimates of the biofuel production. Currently, in Sweden willow coppice produces about 150 GJ per hectare per year; by 2015 a production of 270 GJ per hectare per year due to breeding progress and improved management practice has been estimated.31 This may be optimistic given certain biological and climatic constraints to biofuel production.32 In Denmark for plantations a yield range of 7±8 dry tonnes has been deemed realistic.33 We took samples in November 1997, i.e. after two growing seasons, and measured an average yearly growth of 1.25 oven-dry (o.d.) kilograms per willow stool. For a plantation this would be equivalent to 11.6 o.d. tonnes per hectare a year. At a lower heating value of 19.5 GJ per o.d. tonne,34 the yield is 226 GJ. If we harvest only the willow and leave the hazel and alder to keep some wind-breaking eect, the yearly o.d. energy yield is 127 GJ per hectare biofuel strip. During drying of the harvested biofuel, respiration losses will occur. Experiments35 found that energy content losses vary, depending on the size of the cuttings and the storage method, for a storage period from December to September. We choose 7 percent. The primary energy needed to produce wood chips from willow plantations is 6.4 GJ per hectare per year,31 area corrected this is 3.6 GJ. This reduces the net energy yield to 114 GJ per hectare per year. In the CFE system with a biofuel area of about 1 hectare and a crop area of 7 hectares the net energy harvest translates into an allowable maximal energy consumption of 14.7 GJ per hectare a year for the crops. This is the upper value for the permissible primary energy consumption. Dalgaard36 veri®ed a model of the energy consumption for various ®eld activities with detailed measurements of the fuel consumption on two farms in Denmark. We applied his spreadsheet program (éKOBáR), using a detailed inventory of the activities in the CFE system during 1997. This resulted in an
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average diesel demand of 5 GJ per hectare. According to the latest version of the energy system analysis tool, GEMIS,37 the equivalent primary energy demand is 5.5 GJ, mostly in the form of crude oil. Inclusion of material and equipment energy costs result in a total gross primary energy demand of 10.8 GJ per hectare, which is 74 percent of the allowable energy. This proves that the CFE system is suited to cater for its own energy consumption. A ®nal quali®cation is that this calculation only considers the CFE system as a pure fodder and food system. It disregards energy needed for animal husbandry since the fodder crops are fed to animals for which the return is manure and milk production. This analysis does not yet contain an overview of the other energy sources that derive from the agricultural part. There has been a harvest of oat straw of about 6 dry tonnes per hectare in 1997. This straw could substitute fuel oil or coal, but corrosion problems exist for this application.38,34 Alternatively the straw could be used to produce methanol for the transport sector, if this technology matures, however, this is not a ®rst priority today.39 4. ECONOMICAL ASPECTS OF CFE
It is necessary to investigate how implementing the CFE system on a larger scale would in¯uence farming and societal economics. For the farmer, it is the direct revenue generated from implementing a CFE scheme that could drive its more widespread acceptance. For society it is important to investigate what changes in agricultural systems mean for society and the environment. The latter are factors other than the traditional economic ones, which economists have started to acknowledge.40 In the following, the common monetary unit used is the Euro, which is supposedly the forthcoming currency unit within the EU. Prices are calculated according to 1995 exchange rates when one Euro was worth 7.5 Danish kroner or 9 Swedish kroner. An mEuro is a thousandth of a Euro. A US dollar is worth about 1.25 Euro. (Dollar prices are quoted in brackets.) Our calculations are based on a 25 year rotation for the whole system. The maiden cut after the ®rst year, resulting in about 1 o.d. tonne per hectare, is
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followed by six four-year rotations with an assumed average yearly harvest of 8 o.d. tonnes per hectare. 4.1. Farmers' economies Farmers, who are producing biofuel, will not invest in the machines necessary for planting and harvesting the willow plants.24 It would impose a capital cost too large for the farmer to have these machines standing idle for long periods. The same consideration applies for harvesting of the cereals, where farmers tend to rent combine harvesters from contractors rather than own them. There are only few companies in Denmark currently oering such services since the market is small with only 400 hectares of willow plantation.24 Taking Danish cost ®gures will therefore result in non-representative costs for establishing such energy hedges. Therefore we have used cost ®gures from Sweden, where willow plantations of about 1500041 hectares exist. Establishing a biofuel plantation is currently possible for an investment cost of about 1100 Euro ($880) per hectare in Denmark.42 An equivalent Swedish value41 is about 800 Euro ($640). This includes the ®rst two years mechanical weeding but excludes chemical weed treatment, as the ecological biofuel production in the Danish CFE system does not allow herbicides. According to our activities inventory, mechanical weeding was only necessary once in the Danish CFE system, so the basis of our calculation is conservative. As described above, the CFE system exploits EU set-aside regulations. These currently require farmers to set-aside ®ve percent of their agricultural land. In Denmark, farmers receive a yearly subsidy of about 370 Euro per hectare of set-aside ($295).13 The set-aside payment is calculated on the basis of average historical grain harvests and varies over Europe.43 Currently Danish wood chip prices are about 4.5 Euro ($3.6) per GJ.44,45 This price of biofuel is arti®cially high due to Danish agreements asking the power sector to consume 1.2 million tons of straw and 0.2 million tons of wood until the year 2000.46 For the following calculations we therefore apply a price of 65 Euro per o.d. tonne ($48), or 3.3 Euro per GJ ($2.7). With storage and transport costs totalling 400 Euro ($320) per harvest, the present value
(PV) of producing biofuel in such biofuel hedges is 7500 Euro ($6000) per hectare over the 25 years period at a recommended42 discount rate of 7%. Instead of separately buying the harvesting service, caring for the storage and transport of the biofuel and negotiating prices with biofuel consumers, farmers can contract a specialised company for these purposes. Such businesses can be found in Sweden today.47 Calculations using prices41 for such services presented during a biofuel conference in Uppsala, Sweden, in October 1997 indicate that the prices currently paid in those schemes, around 33 Euro ($27) per dry tonne, would result in a PV of about 6000 Euro ($4800) per hectare for the biofuel produced. Even better economics could be obtained, if the private market was approached, where prices are higher than those given by the energy utilities. Wood fuel is sold at about 80 Euro ($64) net of VAT for a cubic meter delivered.48 At about 600 kg per cubic meter.49 and assuming transport and handling costs of 30 Euro per tonne ($24), this translates into 103 Euro ($83) per oven dry tonne. The net PV is then 10500 Euro ($8400), but fuel handling problems at the customers prevent a fast introduction of SRC wood chips fuel in this market segment. Alternatively a farmer might decide to employ a simple fallow on the set-aside land. In this case the farmer does not bind part of his land for the long time-span a SRC biofuel hedge implies but would neither be able to exploit the bene®ts of the hedge, such as wind breaking, biodiversity and insect pest control or harvest stabilisation. Normally grass or wild ¯owers are sown on the set-aside area. Good agricultural practice demands regular mowing of such ®elds and imposes a cost of about 65 Euro ($52) per hectare a year.50 Including these oset costs we calculate a PV of an investment in biofuel crops of about 3500 Euro per hectare ($2800). If the farmer only mows every second year, the PV still only reaches 3900 Euro ($3120). As can be seen, it is pro®table for farmers to engage in biofuel production of a CFE kind compared to simple set-aside. The comparison is even more favourable if we also consider the considerably reduced peak work load with biofuel production during the normally stressed summer periods, which reduces demand for possible external inputs.
Energetic, economic and ecological balances of a combined food and energy system
4.2. Social economy and externalities Our calculation has until now only considered the internal economic eects of the biofuel production from the CFE system. It has neglected the implications for society. We would like to address two topics: the groundwater pollution saved by the ecological nature of our scheme, and the benign eect on the global climate of the substitution of fossil energy by biofuel energy. The question of groundwater pollution is currently being debated very strongly. In Europe the ocial demand for drinking water is a limit of 0.1 microgram per litre for a single substance and of 0.5 microgram per litre for all substances, with the exception of nitrate for which the limit is 50 milligrams per litre. In Denmark these standards are also the ocial ones for groundwater, so that pollution from biocides surpassing those limits currently means banning such groundwater sources from the drinking water supplies. A Danish study51 concluded that between 250 m3 and 800 m3 of groundwater per year could be contaminated by the application of herbicides at the start of a biofuel plantation. Cleaning groundwater for drinking water purposes by active-coal ®lters has been estimated to be as high as 1 Euro per m3 by the Danish Environmental Agency,52 although latest sources claim values of 70 to 290 mEuro.53 These values indicate a maximal damage potential of about 0.9 Euro per GJ biofuel. Ecological biofuel production does not rely on biocides. It minimises the risk of new additions to the groundwater pollution and would not cause such an externality. To calculate the bene®ts from the reduced CO2 emissions from the substitution of fossil energy with biofuels, we follow an approach by Sùrensen,54 who combined data from working group II of the IPCC on the expected damages of global warming with evaluations of the EU externality research programme, ExternE,55 on damage assessments. 90% of the damages are expected to arise in the devel-
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oping world. As such countries also face competition between consumptive and productive income distribution, we have to correct the costs for dierences in purchasing power parities (PPP). The PPP relates the costs of comparable services and goods in dierent countries to the average national incomes. With this method a central CO2 damage value of 38 Euro per tonne results. Biofuel produced in the CFE system substitutes fossil energy. Emission factors for coal, oil or natural gas are:56 95, 78, and 56.9 kg per GJ. As biofuel technology currently is not as advanced as fossil energy conversion, we have corrected the biofuel primary energy equivalents. This results in yearly mean net reduced CO2 emissions by 9.6, 7.9, and 5.7 tonnes per hectare of biofuel hedge, or a social bene®t of 2.7 Euro per GJ biofuel (Table 1). The central value of about 300 Euro per hectare and year, when oil is substituted with CFE biofuel, indicates the value that this kind of biofuel production has for society. Other factors that need to be included for a fuller investigation are the social costs occurring from nitrate leaching, from irrigation practices, or from changes in landscape appearance. For example the biofuel hedges reduce the wind speed, which by itself reduces evaporation losses. This can have importance for groundwater recharge, both directly by a smaller decrease of the water ®eld capacity and indirectly by the reduced demand for arti®cial irrigation. 5. CFE IN REALITY?
The CFE system, in the form it is enacted at the KVL, is an experimental scheme. What could be the consequences of its more widespread development? As a ®rst assumption we follow a proposal that biofuels should be used for direct combustion.39 This can take place either in local heating systems, or in smaller, decentralised electricity stations. Some biofuel conversion systems have been proposed:57 a
Table 1. CO2 bene®t data. In Euro per hectare and year, assuming 10 odt/ha/yr Fossil Fuel substituted Coal Fuel oil Natural gas
Emission factors kg/GJ 95 78 57
Source: Own calculations, based on Sùrensen.58
Saved emissions kg CO2 9.6 7.9 5.7
Saved social costs (Euro/ha) 368 302 220
Saved social costs (Euro/GJ) 3.2 2.7 1.9
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B. KUEMMEL et al. Table 2. Capacity and consumption data for three biofuel users
Output/capacity Yearly utilisation Fuel use eciency Yearly fuel demand Plantation area demand Eective radius Average transport distance
Small central heating
Medium district heating
15 kW 2000 h 0.65 166 GJ 1.5 ha 0.31 km 0.25 km
6 MW 3000 h 0.9 72 TJ 653 ha 6.5 km 5.2 km
Small power station 36 MW 6000 h 0.45 1728 TJ 15683 ha 31.6 km 25.3
Medium district heating: 2000 hours at 100% capacity for space heating and warm water during the winter and 6760 hours at 15% for warm water during the rest of the year. A yearly average harvest of 110.2 GJ per hectare has been used. Source: Based on Gustavsson et al.57
small-scale central heating device, a mediumscale district heating plant and a small electricity station (Table 2). To describe the eect of a large scale realisation of the CFE system we assume that 5% of the landscape is covered by biofuel belts like in the CFE system, i.e. with an eective production of only 114 GJ per hectare due to the share of hazel and alder which are not assumed to contribute. The eective radius in Table 2 takes into account that only 5% of the landscape is available for biofuel production, if the biofuel user is located in the centre of a circle. However, this will not be the average transport distance from the distributed biofuel sources to their user. Theoretically the average distance within a circle from its centre is two thirds of its radius, but in reality it is impossible to drive the shortest distance. The average transport distance is about 20% longer.31 According to Table 2 a small central heating system with the potential to supply a normal house with heat will use a fuel amount equivalent to an area of about 1.5 ha. A medium district heating installation would demand an area of about 653 ha, and the small power station 12000 ha or 120 km2, which is equivalent to a plantation of a square with 11 kilometres side length. The average transport distances are about 250 meters, 5.2 km and 25.3 km respectively. The energy demand for the fuel transport over the mentioned distances is between 0.01 and 0.44 percent and has been neglected in the calculations; even for transport to private customers this share is only 0.5%. Regarding the emissions caused by various transport means, in all those case tractor transport is still possible.31 In reality the transport to the power station, and very likely also to the medium district heating plant, will take
place with lorries, as tractor transport has a high injury and accident risk, it is energy demanding and very uncomfortable to cover long distances by tractors, and slow speed makes tractor use manpower-intensive and thus expensive! 6. CONCLUSION
The CFE system can be a step towards a more sustainable agricultural system. As a temperate agroforestry system, its agricultural part can bene®t from the biodiversity and microclimatic eects of the biofuel hedges, which will have a positive eect on farm economies and agriculture's energy balance. We emphasise that the CFE system is an ecologically interacting system that produces food and biofuel energy together. It uses the longer time-scale of the energy crop component as a means of stabilising the production of the food component and exhibits spatial complementarity of the crops. Biofuel complements other, intermittent renewable energy forms. It is easily stored, therefore it will play a large role in tomorrow's energy systems,6,11,15,29 where future large consumers, like industrial conversion sites to produce methanol or hydrogen,58 will demand large-scale plantations, but they are not feasible everywhere and not likely today. The CFE system is a decentralised solution enabling biofuel to enter the market smoothly, which is a big advantage today. When farmers can enter the heating market for smaller scale private customers, the CFE system is a highly pro®table choice, and it could pave the way for large-scale biofuel production. Ecological production means other related social bene®ts, like the reduction of the risk of potential groundwater pollution. The neutralisation of CO2 emissions from biofuel substi-
Energetic, economic and ecological balances of a combined food and energy system
tution indicates potentially large social bene®ts. Furthermore SRC on agricultural area and the substitution of fossil fuels with biofuels have been shown to result in a larger cumulative absorption of CO2 from the air than replacing forestry with SRC.25 All these aspects make us conclude that the CFE system is a win-win-win approach to several of the current problems agriculture and society face. The central value of about 300 Euro per hectare of biofuel hedge and the current hectare support from the EU are comparable in amount, which would allow to convert current set-aside payments to a scheme that re¯ects externality avoidance. Such a strategy would harmonise well with recent WTO agreements that aim to reduce the support of agricultural production but allow environmental protection.59 Current energy and CO2 taxes in i.e. Denmark or Sweden seem to cause a comparatively high price for biofuels41 but do not necessarily re¯ect the true externality costs. If energy prices imposed the proper so-called ``externality adders'', market forces would lead to a fast diusion of renewables that have lower total, i.e. internal and social, costs.58 This development likewise would enhance the market position of solid biofuels. AcknowledgementsÐBernd Kuemmel is supported by an EU grant: FAIR3-PL96-No. 1449. John R. Porter and Vibeke Langer acknowledge support from the Danish Agricultural Research Council.
REFERENCES 1. Nefterl, A., Moor, E., Oeschger, H. and Stauer, B., Evidence from polar ice cores for the increase in atmospheric CO2 in the past two centuries, Nature, 1985, 315, 45. 2. Houghton, J. T., Filho, L. G. M., Callander, B. A., Harris, N., Kattenberg, A. and Maskell, K., Climate Change 1995. The Science of Climate Change. In Contribution of Working Group I to the Second Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, 1996. 3. Hegerl, G. C., Hasselmann, K., Cubasch, U., Mittchell, J. F. B., Roeckner, E., Voss, R. and Waszkewitz, J., Multi-®ngerprint detection and attribution analysis of greenhouse gas, green-house gas-plus-aerosol and solar forced climate change, Climate Dyn., 1997, 13, 613±634. 4. Enting, I. G., Wigley, T. M. L. and Heimann, M., Future emissions and concentrations of carbon dioxide: key ocean/atmosphere/land analyses. Technical Paper No. 31. CSIRO Division of Atmospheric Research, Mordialloc, 1994. 5. Colls, K., Assessing the impact of weather and climate in Australia. Clim. Change, 26, 1993, pp. 225±245.
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6. Watson, R. T., Zinyowera, M. C., Moss, R. H. and Dokken, D. J., Climate Change 1995. Impacts, Adaptation and Mitigation of Climate Change: Scienti®c-technical analyses. In Contribution of Working Group II to the Second Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, 1996. 7. Parry, M. L. and Swaminathan, M. S., Eects of climate change on food production. In Confronting Climate Change. Risks, Implications and Responses, ed. I. M. Mintzer. Cambridge University Press, Cambridge, 1992, pp. 113±125. 8. Burdick, G. 1993. Climatic change and agriculture. Agrobusiness as actor and suerer (in German) Stiftung OÈkologie und Landbau, Verlag C.F. MuÈller, Bad DuÈrkeim. 9. Mount, T., Climate change and agriculture: a perspective on priorities for economic policy, Clim. Change, 1994, 27, 121±138. 10. FAO, The State of Food and Agriculture 1996. Food Security: Some Macroeconomic Dimensions. Food and Agricultural Organisation, Rome, 1996. 11. Hall, D., Biofueld energy options in Western Europe (OECD) to 2050. In Energy Technologies to Reduce CO2 Emissions in Europe. OECD, Paris, 1994, pp. 159±193. 12. Farmer, D. P., Hutcheon, J. A. and Jordan, V. W. L., Socio-economics of commercial implementation of integrated arable production systems under the reformed CAP, Aspects Appl. Biol., 1994, 40, 81±85. 13. EU-Direktoratet, Hectare support. Manual for 1998 harvest. July 1997, Copenhagen, 1997, (in Danish). 14. Dixon, R. K., Winjum, J. K., Andrasko, K. J., Lee, J. J. and Schroeder, P. E., Integrated land use systems: assessment of promising agroforest and alternative land-use practices to enhance carbon conservation and sequestation, Clim. Change, 1994, 27, 71±92. 15. Hall, D. O. and House, J. J., Biofuel Energy and the Global Carbon Balance, Renewable Energy, 1994, 5, 58±66. 16. Schlamadinger, B. and Spitzer, J., CO2 Mitigation through Bioenergy from Forestry substitution Fossil Energy. Presentation at the 8th European Conference on Biofuel for Energy, Environment, Agriculture and Industry Joanneum Research, Graz, 1994. 17. EEC Council Regulation 2092/91 on organic production of agricultural products indications referring thereto on agricultural products foodstus. 18. Rasmussen, J., No threat to the environment, Jord & Viden, 1997, 142, 8±10 (in Danish). 19. Nair, H. K. R., State-of-the-art of agroforestry systems. In Agroforestry: Principles and Practice, ed. P. G. Jarvis. Elsevier Science Publishers, Amsterdam, 1991, pp. 5±29. 20. ETSU, Agriculture and Forestry Fact Sheet. Short Rotation Coppice No. 14. Plantation Design: Combating Disease and Pests. Renewable Energy Enquiries Bureau, ETSU, Harwell, 1994. 21. McCracken, R. A. and Dawson, W. M., Using mixtures of willow clones as a means of controlling rust disease, Aspects Appl. Biol., 1997, 49, 97±103. 22. Armstrong, A. and Johns, C., Eects of spacing on yield from two clones of poplar and two clones of willow grown as energy coppice, Aspects Appl. Biol., 1997, 49, 85±90. 23. Kofmann, P. D. and Spinelli, R., Recommendations for the establishment of Short Totation Coppice (SRC) based on practical experience of harvesting trials in Denmark and Italy, Aspects Appl. Biol., 1997, 49, 61±70. 24. Turnbull, D. J., The commercial reality of producing biofuel from short rotation coppice, Aspects Appl. Biol., 1997, 49, 71±78.
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25. Schlamadinger, B. and Marland, G., Full Fuel Cycle Carbon Balances of Bioenergy and Forestry Options, Energy Convers. Mgmt, 1996, 37, 813±818. 26. Nielsen, V. and Sùrensen, C. G., Grùnne Marker. Driftstekniske analyser og model-beregninger. Green ®elds. Operational analyses and model simulations. In Beretning Nr., 59. 1994, Statens Jordrugstekniske Forsùg, Horsens, 1994. 27. Skov-info, Ny skov, nyt landskab (New forest, new landscape). In skov-info, 16. Skov-og Naturstyrelsen, Copenhagen, 1995. 28. Scholes, H., Is there a future for energy crops in South West England?. Aspects Appl. Biol., 1997, 49, 465±474. 29. Shell, The Evolution of the World's Energy Systems. Shell International Limited, Group External Aairs, London, 1996. 30. Gopalakrishnan, C., The Economics of Energy in Agriculture. Avebury, Aldershot, 1994. 31. BoÈrjesson, P. I. I. and Gustavsson, L., Regional production and utilization of biofuel in Sweden, Energy, 1996, 21, 747±764. 32. Nonhebel, I. S., Comment on ``Biofuel energy options in Western Europe (OECD) to 2050''. In Energy Technologies to Reduce CO2 Emissions in Europe. OECD, Paris, 1994, pp. 195±197. 33. Hedin, N., Udbytter fra pileplanager (Harvest results from willow plantations), Dansk BioEnergi, 1997, (34), 6. 34. Sander, B., Properties of Danish Biofuels and the Requirements for Power Production, Biofuel and Bioenergy, 1997, 12, 177±183. 35. Kofmann, P. D., Storage of willow from short rotation forestry, Aspects Appl. Biol., 1997, 49, 417±422. 36. Dalgaard, T., Resource control of fossil energy in crop production. M.Sc. (Agric) Thesis. L8532, KVL, Frederiksberg (in Danish) 1996. 37. GEMIS, Total Emission Model of Integrated Systems, OÈko-Institut Darmstadt and GH Kassel, 1992, (in German). 38. DEA, Biofuel for Energy±Danish Solutions. Danish Energy Agency, Copenhagen, 1996. 39. CASA, Biofuels±Improving Nature and the Environment, ed. J. Nielsen, C. E. Jùrgensen, K. KragAndersen, M. Anderson and A. SigsgaÊrd. Centre for Alternative Social Analysis, Copenhagen, 1994. 40. Kula, E., Economics of Natural Resources, the Environment and Politics, Chapman & Hall, London, 1994. 41. Personal communication of HaÊkan Rosenqvist. SLU, Uppsala, Sweden. 42. Econet, Energy and environmental plus economic consideration of the exploitation of biofuel crops,
43. 44. 45. 46.
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Biofueleinstituttet, Esbjerg, econet, Forskningscenter Riso, Energistyrelsen, Copenhagen, 1994, (in Danish). Personal communication of Friis. EU-Directorate, Copenhagen. Skùtt, T., Heat from straw more expansive than heat from wood, Dansk Bio-Energi, 1997, , 4±6 (in Danish). Nielsen, C., ELSAM con®rms coal/biofuel-strategies. In ELSAM-posten (in Danish), 9/95. Frederica, 1995, p. 4. Jùrgensen, U. and Sander, B., Biofuel requirements for power production: how to optimise the quality by agricultural management, Biofuel and Bioenergy, 1997, 12, 145±147. Personal communication of Rodolfo Linqvist. Salix Maskiner Company, Stockholm. Personal communication from H. C. Skov fuel traders, Copenhagen. Skyum, J., Marginal wood resources in Denmark. Potential amounts, geographical distribution and economy in fuel use. Stovteknisk Institut, Frederiksberg (in Danish), 1979. Personal communication of Bent Jeppesen. KVL, Taastrup. Meyer, H., Mortholst, P. E., Schleisner, L., Meyer, N. I., Nielsen, P. S. and Nielsen, V., Cost calculation of environmental externalities connected to energy production. In Risù-R-770(DA). Forskningscenter Risù, Roskilde (in Danish), 1994. Breinholt, T., Cheap to clean pesticides in water, Ingeniùren, 1996, 22(17), (in Danish). Christiansen, J., Cheap to clean pesticides, Ingeniùren, 1997, 23(49), (in Danish). Sùrensen, B., Externality estimation of greenhouse warming impacts, Energy Convers. Mgmt, 1996, 37, 693±698. ETSU and Metroeconomica, ExternE. Externalities of Energy. Vol. 2. Methodology. EUR 16521 EN, European Commission, DG XII. Brussels, 1995. Andersen, F. M. and Trier, P., Environmental satellite models for ADAM. CO2, SO2 and NOx emissions. In NERI Technical Report No 148. National Environmental Research Institue, Risù, 1995. Gustavsson, L., Bùrjesson, P. I. I., Johansson, B. and Svenningsson, P., Reducing CO2 emissions by substitution biofuel for fossil fuels, Energy, 1995, 20, 1097± 1113. Kuemmel, B., Nielsen, S. K. and Sùrensen, B., Life Cycle Analysis of Energy Systems. Roskilde University Press, 1997. Marsh, J. S., The policy approach to sustainable farming systems in the EU, Agric. Ecosyst. Environ., 1997, 64, 103±114.
Biomass and Bioenergy Vol. 15, Nos 4/5, pp. 407±416, 1998 # 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0961-9534/98 $ - see front matter S0961-9534(98)00047-6
ENERGETIC, ECONOMIC AND ECOLOGICAL BALANCES OF A COMBINED FOOD AND ENERGY SYSTEM BERND KUEMMEL%*, VIBEKE LANGER%, JAKOB MAGID$, ANDREAS DE NEERGAARD% and JOHN R. PORTER%* %Agro-ecology Group, Department of Agricultural Sciences, The Royal Veterinary and Agricultural University (KVL), Agrovej 10, DK-2630 Taastrup, Denmark $Laboratory for Plant Nutrition, Department of Agricultural Sciences, The Royal Veterinary and Agricultural University (KVL), Thorvaldsensvej 40, DK-1871 Frederiksberg, Denmark AbstractÐAgriculture is one of the industries most exposed to climate change and is also a contributor of anthropogenic CO2 emissions to the atmosphere. In this paper we describe an integrated agricultural system with the goal of neutralising the energy-related CO2 emissions from agriculture by substituting fossil with biofuel energy produced on mandatory set-aside areas. We show that such a system can be economically viable both from a farmer's point of view and from a social point of view, and that the introduction of biofuel production on a local scale can have bene®ts apart from energetic and climatic aspects. The net reduction of CO2 emissions is equivalent to an externality bene®t of about 300 Euro per hectare, an amount equivalent to the current set-aside payments for Denmark. # 1998 Elsevier Science Ltd. All rights reserved KeywordsÐBiofuel; agroforestry; ecological farming; externalities; social costs; set-aside support; economic viability; greenhouse eect.
1. INTRODUCTION
Since the start of the industrial revolution atmospheric concentrations of CO2 and other so-called greenhouse gases have been rising.1 The associated radiative forcing2 from the enhancement of the greenhouse eect is currently about 2.7 Wmÿ2. It is now considered certain that the eects of this radiative forcing on the world's climate are already detectable.3 The rise in the atmospheric CO2 concentration can only be stopped if anthropogenic emissions are reduced to amounts much lower than today's levels.4 Agriculture is not only a sector especially exposed to natural climatic variability5 and anthropogenic climate change,6,7 it is also a contributor to the increased radiative forcing by emitting CO2 and other greenhouse gases into the atmosphere.8,9 For example, agriculture is responsible for 3.7 percent of the total fossil fuel related CO2 emissions in Germany;8 at the same time agricultural GNP is only about 1.55 percent.10 This means that German agriculture has sector-speci®c CO2 emissions more than twice the national average. This *Corresponding authors: [email protected] or [email protected] 407
puts emphasis on agriculture to reduce its emissions, despite the fact that it may seem to use a small amount of the total commercial energy. Agriculture's share of the CO2 emissions may be reduced by reducing the energy demand for given activities, i.e., by improving the energy-use eciency.6 Another possibility is to use set-aside areas for the production of solid biofuel11 to substitute fossil energy with renewable, CO2-neutral energy, such as solid biofuel in the form of wood, which this article focuses on. We present a combined food and energy (CFE) system and look at some of the energy, economic and environmental consequences of it. The result shows that it is possible to provide areas for biofuel production, at least in the European Union (EU) where there is a surplus production of certain agricultural products. This surplus production strained the EC budgets and led to the change in agricultural support schemes. In 1992 the EU enacted setaside regulations and reformed the Common Agricultural Policy to put more emphasis on environmental protection.12 Farmers in the EU are now requested to set-aside part of their total area and not use it for producing food or fodder.13
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Non-food products are allowed to a certain degree. They qualify for set-aside payments in the form of refunds, calculated on an area basis and depending on the product grown in the ®eld. Solid biofuel is a legitimate set-aside product.13 The CFE system is a temperate agroforestry system which would absorb CO2 from the atmosphere.14 The basic idea is that the biofuel produced on the set-aside areas should substitute at least as much fossil energy as is consumed in the direct and upstream agricultural part of the scheme; this also includes the energy used in harvesting and transporting the biofuel. This substitution of fossil with biofuel energy neutralises the fossil CO2 emissions from agricultural activities.15,16 The Danish CFE system is managed according to ecological practices which are called ``organic'' in ocial EU parlance.17 Neither mineral fertilisers nor synthetic biocides are
employed in the system. In particular, the reduction in mineral fertiliser application minimises the indirect energy demand of the farming scheme.18 We continue with a description of the CFE system, the calculation of the energy balances within it, examples of the consequences of its more widespread realisation and the conclusions. 2. CFE SYSTEM DESCRIPTION
Various experimental CFE schemes are currently being investigated in Europe. The ®rst of these to be established is at the research station of the Danish Royal Veterinary and Agricultural University (KVL). The Danish CFE system (Fig. 1), consists of short rotation coppice (SRC) biofuel strips separating ®elds used for crop production, similar to agroforestry systems that have been proposed for the tropics.19 The CFE is an application of the
Fig. 1. Field Design and Layout of the CFE system at KVL-Taastrup, Denmark. The ®elds are separated by biofuel strips. In the experimental scheme at KVL the distance between the biomass strips varies between 50 and 200 meters, partly to investigate whether there will be some measureable eect of the biomass strips on pest control and microclimate depending on the scale. The total area of the scheme is about eight hectares.
Energetic, economic and ecological balances of a combined food and energy system
agro-forestry idea to a temperate climate. A mixture of three willow species was chosen to minimise the risk of willow leaf rust attacks from the fungus Melampsora epitea.20,21 Stools (pieces of willow stem about 20 cm long) were planted in 0.7 m wide twin-rows with 1.3 m between each twin-row and an along-row distance of 0.5 m in a rectangular pattern. The willows occupy the central six rows. On the outer edges of the biomass strip there are twin-rows of either hazel or alder, and there is 1 m left to the food crops to allow machinery to turn. This means 18,700 stools per hectare biofuel strip; a planting density used for larger plantations.22±24 Theoretically even higher densities are possible by triangularising the stool pattern, which may have advantages with respect to light interception. In the Danish CFE system the biofuel share is about 11 per cent of the total experimental area. This is more than the present mandatory set-aside demand of 5 percent of the farm land,13 but the scheme was developed when the set-aside demand was 12 percent. The reduction in set-aside demand was due to a rise of the world market price for important agricultural products. A four-year rotation of spring barley undersown with clover, clover-grass, fodder beets and spring oats with a following catch crop has been established with equal shares of the ®eld area between the biomass belts. The almost two-year clover-grass ley reduces the energy needed for ®eld operations, as one season's ploughing is saved and is needed for fodder production and important for nitrogen and carbon ®xation. The catch crop is sown with minimal tillage. After the oats have been harvested, the ®eld is lightly harrowed and not ploughed. Instead of producing biofuel and crops in separate plantations and in monoculture, as is the case with most current agricultural and forestry temperate systems, the CFE exploits other eects of the biofuel strips. These are perceived to be: energy neutrality, increased plant and insect biodiversity, a shelter belt eect, the conservation of nitrogen and carbon, new revenue for farmers, an extensi®ed agriculture, a more varied landscape and a ``soft biofuel'' start. 2.1. Energy neutrality The system will not only have a low energy demand but it will at least balance its use of
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fossil derived fuels by its production of solid biofuel. This is currently the main objective of the CFE scheme. We examine the energy balance and economics of the CFE system in more detail later. 2.2. Biodiversity enhancement and microclimate improvement Biofuel hedges increase biodiversity through the conscious addition of a number of plant species. The degree of control is in¯uenced by the spatial arrangements of the food and energy crops. Assuming, for example, that the biodiversity eect could substitute for some chemical pest control, currently applied in industrialised agriculture, this would save energy for the production, transport, and application of such substances. An equivalent argument is applicable for the improvement of the microclimate. These changes mean a reduction in the total energy consumption of the CFE system. Less evapotranspiration rates by reducing windspeeds means less water loss and thus reduces the danger of a moisture de®cit. For the clover-grass and the beets any rises in temperature caused by the biofuel belts would mean a longer growing season, which might result in higher yields. Conversely, raising temperatures could shorten the growing season of the cereals. From the geometry of the CFE system (Fig. 1) it is easy to see how a farmer could bene®t from the direct and indirect economic eects of the biodiversity enhancement and the improvement of the microclimate. In some places such biofuel hedges can reduce windborne soil erosion. 2.3. Changes of nitrogen and carbon cycling The carbon and nitrogen cycles in the CFE system are perceived to be conservative. The eects of the rotation applied in the CFE system on the nitrogen cycling is being studied. It is hoped that nitrate leaching can be minimised by the choice of rotation elements and the use of catch crops. Carbon will be amassed in the below ground parts of the biofuel hedges.25 This is a means of stabilising the anthropogenic radiative forcing. The CO2 released from burning the biofuel is recycled during the life time of the biofuel hedge. As this biofuel energy substitutes fossil energy, there is a net reduction of CO2 emissions. The current set-up at the
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KVL results in an excess of oat straw, which could also be exploited for energy purposes.
Improvements in hunting opportunities is another aspect to be taken into consideration.
2.4. Exploitation of set-aside regulations
2.7. Soft biofuel start
Set-aside demands have been introduced as a means to cope with productivity surpluses arising in Europe and to extensify agricultural production. The exploitation of set-aside payments ensures the economic viability of this kind of biofuel production, as we show later. The biofuel strips qualify for set-aside payments,13 they lead to a new non-food product, thus improving the farmers' economy. If, because of budget restraints, demands to curb EU budgets were to decrease set-aside payments, whilst the mandatory set-aside area demand was kept, biofuel production would be attractive because of the generated revenue. 2.5. Extensi®cation of crop production Biofuel hedges are a means of extensifying agriculture both in terms of environmental as well as management aspects. Biofuel production is not energy intensive, and it leaves part of the land undisturbed for a longer period than with yearly fallow schemes. Another important aspect is the distribution of the work load over the seasons. Work demand for biofuel hedges is minimal, and occurs during o-peak load periods, opposite to green ®eld fallowing.26 2.6. Landscape aspects A widespread realisation of the CFE system would create a more varied landscape compared to large-scale monocultures. The biofuel hedges can become a valuable tool for improving the diversity and perception of a landscape. The system's spatial design makes it similar to the cultural landscapes prevalent in most parts of Europe until quite recently. The possibility exists of leading a spectator's eyes in directions that enhance the landscape experience; on the other hand the danger exists to spoil beautiful views,27 which has to be taken into consideration. Other inferred advantages arise from improvements in wild ¯ora and fauna. When more bird species occur in an area, as they ®nd breeding grounds and feeding opportunities in the hedges, it becomes more valuable for bird watchers and lay people. The eect of this indirect economic consequence can be inferred using a travel cost method.
An SRC plantation binds the land for a period of 20 or more years, and farmers are likely to be very reluctant to set-aside a major share of their area for such a long period. On the other hand, institutional biofuel users are dependent on long-term, and reliable, supplies of biofuels to ensure their investments' pro®tability. Only when this is the case, will they invest in a biofuel ®red power station or district heating plant.28 Farmers often appreciate the advantages of hedges, which many would like to reintroduce. With CFE they do not have to bind a large share of their land as is the case with a regular SRC plantation. Farmers can collect experience with biofuel production on a small scale and become acquainted with it. The CFE idea therefore enables a ``soft biofuel'' start and can pave the way for plantations. Their potential role in a future global energy system based on renewables is increasingly acknowledged by sections of the fossil fuel industry.29 3. ENERGY BALANCES
As described above the CFE system consists of ®eld areas divided by biofuel strips. The direct energy balance of the system includes cultivation activities in the ®elds, the planting and harvesting of the biofuel. Energy is also used to manufacture the engines and machinery used for production and the transport of machinery and equipment to the application sites. These indirect energy requirements have also to be included in calculating an overall energy balance. It is not within the scope of this paper to attribute the total upstream activities related to the extraction and use of primary energy and raw materials in the CFE system. We will use a simpler approach based on the primary energy equivalents of the machinery and equipment used and the energy consumed during ®eld activities. The system boundary allocation with respect to the indirect energy use is dicult to de®ne. One could argue that the production of the steel for an agricultural machine should not be included in the indirect energy calculations, because the steel did not have a use dedicated to agriculture when it was milled.30 From a
Energetic, economic and ecological balances of a combined food and energy system
life-cycle point of view it would be illogical to follow this assumption, as it ignores the simple fact that steel is necessary in all circumstances in today's technology, so this energy should be included. 3.1. Energy economy of the CFE system under simple assumptions We now want to establish the energy balance, starting with estimates of the biofuel production. Currently, in Sweden willow coppice produces about 150 GJ per hectare per year; by 2015 a production of 270 GJ per hectare per year due to breeding progress and improved management practice has been estimated.31 This may be optimistic given certain biological and climatic constraints to biofuel production.32 In Denmark for plantations a yield range of 7±8 dry tonnes has been deemed realistic.33 We took samples in November 1997, i.e. after two growing seasons, and measured an average yearly growth of 1.25 oven-dry (o.d.) kilograms per willow stool. For a plantation this would be equivalent to 11.6 o.d. tonnes per hectare a year. At a lower heating value of 19.5 GJ per o.d. tonne,34 the yield is 226 GJ. If we harvest only the willow and leave the hazel and alder to keep some wind-breaking eect, the yearly o.d. energy yield is 127 GJ per hectare biofuel strip. During drying of the harvested biofuel, respiration losses will occur. Experiments35 found that energy content losses vary, depending on the size of the cuttings and the storage method, for a storage period from December to September. We choose 7 percent. The primary energy needed to produce wood chips from willow plantations is 6.4 GJ per hectare per year,31 area corrected this is 3.6 GJ. This reduces the net energy yield to 114 GJ per hectare per year. In the CFE system with a biofuel area of about 1 hectare and a crop area of 7 hectares the net energy harvest translates into an allowable maximal energy consumption of 14.7 GJ per hectare a year for the crops. This is the upper value for the permissible primary energy consumption. Dalgaard36 veri®ed a model of the energy consumption for various ®eld activities with detailed measurements of the fuel consumption on two farms in Denmark. We applied his spreadsheet program (éKOBáR), using a detailed inventory of the activities in the CFE system during 1997. This resulted in an
411
average diesel demand of 5 GJ per hectare. According to the latest version of the energy system analysis tool, GEMIS,37 the equivalent primary energy demand is 5.5 GJ, mostly in the form of crude oil. Inclusion of material and equipment energy costs result in a total gross primary energy demand of 10.8 GJ per hectare, which is 74 percent of the allowable energy. This proves that the CFE system is suited to cater for its own energy consumption. A ®nal quali®cation is that this calculation only considers the CFE system as a pure fodder and food system. It disregards energy needed for animal husbandry since the fodder crops are fed to animals for which the return is manure and milk production. This analysis does not yet contain an overview of the other energy sources that derive from the agricultural part. There has been a harvest of oat straw of about 6 dry tonnes per hectare in 1997. This straw could substitute fuel oil or coal, but corrosion problems exist for this application.38,34 Alternatively the straw could be used to produce methanol for the transport sector, if this technology matures, however, this is not a ®rst priority today.39 4. ECONOMICAL ASPECTS OF CFE
It is necessary to investigate how implementing the CFE system on a larger scale would in¯uence farming and societal economics. For the farmer, it is the direct revenue generated from implementing a CFE scheme that could drive its more widespread acceptance. For society it is important to investigate what changes in agricultural systems mean for society and the environment. The latter are factors other than the traditional economic ones, which economists have started to acknowledge.40 In the following, the common monetary unit used is the Euro, which is supposedly the forthcoming currency unit within the EU. Prices are calculated according to 1995 exchange rates when one Euro was worth 7.5 Danish kroner or 9 Swedish kroner. An mEuro is a thousandth of a Euro. A US dollar is worth about 1.25 Euro. (Dollar prices are quoted in brackets.) Our calculations are based on a 25 year rotation for the whole system. The maiden cut after the ®rst year, resulting in about 1 o.d. tonne per hectare, is
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followed by six four-year rotations with an assumed average yearly harvest of 8 o.d. tonnes per hectare. 4.1. Farmers' economies Farmers, who are producing biofuel, will not invest in the machines necessary for planting and harvesting the willow plants.24 It would impose a capital cost too large for the farmer to have these machines standing idle for long periods. The same consideration applies for harvesting of the cereals, where farmers tend to rent combine harvesters from contractors rather than own them. There are only few companies in Denmark currently oering such services since the market is small with only 400 hectares of willow plantation.24 Taking Danish cost ®gures will therefore result in non-representative costs for establishing such energy hedges. Therefore we have used cost ®gures from Sweden, where willow plantations of about 1500041 hectares exist. Establishing a biofuel plantation is currently possible for an investment cost of about 1100 Euro ($880) per hectare in Denmark.42 An equivalent Swedish value41 is about 800 Euro ($640). This includes the ®rst two years mechanical weeding but excludes chemical weed treatment, as the ecological biofuel production in the Danish CFE system does not allow herbicides. According to our activities inventory, mechanical weeding was only necessary once in the Danish CFE system, so the basis of our calculation is conservative. As described above, the CFE system exploits EU set-aside regulations. These currently require farmers to set-aside ®ve percent of their agricultural land. In Denmark, farmers receive a yearly subsidy of about 370 Euro per hectare of set-aside ($295).13 The set-aside payment is calculated on the basis of average historical grain harvests and varies over Europe.43 Currently Danish wood chip prices are about 4.5 Euro ($3.6) per GJ.44,45 This price of biofuel is arti®cially high due to Danish agreements asking the power sector to consume 1.2 million tons of straw and 0.2 million tons of wood until the year 2000.46 For the following calculations we therefore apply a price of 65 Euro per o.d. tonne ($48), or 3.3 Euro per GJ ($2.7). With storage and transport costs totalling 400 Euro ($320) per harvest, the present value
(PV) of producing biofuel in such biofuel hedges is 7500 Euro ($6000) per hectare over the 25 years period at a recommended42 discount rate of 7%. Instead of separately buying the harvesting service, caring for the storage and transport of the biofuel and negotiating prices with biofuel consumers, farmers can contract a specialised company for these purposes. Such businesses can be found in Sweden today.47 Calculations using prices41 for such services presented during a biofuel conference in Uppsala, Sweden, in October 1997 indicate that the prices currently paid in those schemes, around 33 Euro ($27) per dry tonne, would result in a PV of about 6000 Euro ($4800) per hectare for the biofuel produced. Even better economics could be obtained, if the private market was approached, where prices are higher than those given by the energy utilities. Wood fuel is sold at about 80 Euro ($64) net of VAT for a cubic meter delivered.48 At about 600 kg per cubic meter.49 and assuming transport and handling costs of 30 Euro per tonne ($24), this translates into 103 Euro ($83) per oven dry tonne. The net PV is then 10500 Euro ($8400), but fuel handling problems at the customers prevent a fast introduction of SRC wood chips fuel in this market segment. Alternatively a farmer might decide to employ a simple fallow on the set-aside land. In this case the farmer does not bind part of his land for the long time-span a SRC biofuel hedge implies but would neither be able to exploit the bene®ts of the hedge, such as wind breaking, biodiversity and insect pest control or harvest stabilisation. Normally grass or wild ¯owers are sown on the set-aside area. Good agricultural practice demands regular mowing of such ®elds and imposes a cost of about 65 Euro ($52) per hectare a year.50 Including these oset costs we calculate a PV of an investment in biofuel crops of about 3500 Euro per hectare ($2800). If the farmer only mows every second year, the PV still only reaches 3900 Euro ($3120). As can be seen, it is pro®table for farmers to engage in biofuel production of a CFE kind compared to simple set-aside. The comparison is even more favourable if we also consider the considerably reduced peak work load with biofuel production during the normally stressed summer periods, which reduces demand for possible external inputs.
Energetic, economic and ecological balances of a combined food and energy system
4.2. Social economy and externalities Our calculation has until now only considered the internal economic eects of the biofuel production from the CFE system. It has neglected the implications for society. We would like to address two topics: the groundwater pollution saved by the ecological nature of our scheme, and the benign eect on the global climate of the substitution of fossil energy by biofuel energy. The question of groundwater pollution is currently being debated very strongly. In Europe the ocial demand for drinking water is a limit of 0.1 microgram per litre for a single substance and of 0.5 microgram per litre for all substances, with the exception of nitrate for which the limit is 50 milligrams per litre. In Denmark these standards are also the ocial ones for groundwater, so that pollution from biocides surpassing those limits currently means banning such groundwater sources from the drinking water supplies. A Danish study51 concluded that between 250 m3 and 800 m3 of groundwater per year could be contaminated by the application of herbicides at the start of a biofuel plantation. Cleaning groundwater for drinking water purposes by active-coal ®lters has been estimated to be as high as 1 Euro per m3 by the Danish Environmental Agency,52 although latest sources claim values of 70 to 290 mEuro.53 These values indicate a maximal damage potential of about 0.9 Euro per GJ biofuel. Ecological biofuel production does not rely on biocides. It minimises the risk of new additions to the groundwater pollution and would not cause such an externality. To calculate the bene®ts from the reduced CO2 emissions from the substitution of fossil energy with biofuels, we follow an approach by Sùrensen,54 who combined data from working group II of the IPCC on the expected damages of global warming with evaluations of the EU externality research programme, ExternE,55 on damage assessments. 90% of the damages are expected to arise in the devel-
413
oping world. As such countries also face competition between consumptive and productive income distribution, we have to correct the costs for dierences in purchasing power parities (PPP). The PPP relates the costs of comparable services and goods in dierent countries to the average national incomes. With this method a central CO2 damage value of 38 Euro per tonne results. Biofuel produced in the CFE system substitutes fossil energy. Emission factors for coal, oil or natural gas are:56 95, 78, and 56.9 kg per GJ. As biofuel technology currently is not as advanced as fossil energy conversion, we have corrected the biofuel primary energy equivalents. This results in yearly mean net reduced CO2 emissions by 9.6, 7.9, and 5.7 tonnes per hectare of biofuel hedge, or a social bene®t of 2.7 Euro per GJ biofuel (Table 1). The central value of about 300 Euro per hectare and year, when oil is substituted with CFE biofuel, indicates the value that this kind of biofuel production has for society. Other factors that need to be included for a fuller investigation are the social costs occurring from nitrate leaching, from irrigation practices, or from changes in landscape appearance. For example the biofuel hedges reduce the wind speed, which by itself reduces evaporation losses. This can have importance for groundwater recharge, both directly by a smaller decrease of the water ®eld capacity and indirectly by the reduced demand for arti®cial irrigation. 5. CFE IN REALITY?
The CFE system, in the form it is enacted at the KVL, is an experimental scheme. What could be the consequences of its more widespread development? As a ®rst assumption we follow a proposal that biofuels should be used for direct combustion.39 This can take place either in local heating systems, or in smaller, decentralised electricity stations. Some biofuel conversion systems have been proposed:57 a
Table 1. CO2 bene®t data. In Euro per hectare and year, assuming 10 odt/ha/yr Fossil Fuel substituted Coal Fuel oil Natural gas
Emission factors kg/GJ 95 78 57
Source: Own calculations, based on Sùrensen.58
Saved emissions kg CO2 9.6 7.9 5.7
Saved social costs (Euro/ha) 368 302 220
Saved social costs (Euro/GJ) 3.2 2.7 1.9
414
B. KUEMMEL et al. Table 2. Capacity and consumption data for three biofuel users
Output/capacity Yearly utilisation Fuel use eciency Yearly fuel demand Plantation area demand Eective radius Average transport distance
Small central heating
Medium district heating
15 kW 2000 h 0.65 166 GJ 1.5 ha 0.31 km 0.25 km
6 MW 3000 h 0.9 72 TJ 653 ha 6.5 km 5.2 km
Small power station 36 MW 6000 h 0.45 1728 TJ 15683 ha 31.6 km 25.3
Medium district heating: 2000 hours at 100% capacity for space heating and warm water during the winter and 6760 hours at 15% for warm water during the rest of the year. A yearly average harvest of 110.2 GJ per hectare has been used. Source: Based on Gustavsson et al.57
small-scale central heating device, a mediumscale district heating plant and a small electricity station (Table 2). To describe the eect of a large scale realisation of the CFE system we assume that 5% of the landscape is covered by biofuel belts like in the CFE system, i.e. with an eective production of only 114 GJ per hectare due to the share of hazel and alder which are not assumed to contribute. The eective radius in Table 2 takes into account that only 5% of the landscape is available for biofuel production, if the biofuel user is located in the centre of a circle. However, this will not be the average transport distance from the distributed biofuel sources to their user. Theoretically the average distance within a circle from its centre is two thirds of its radius, but in reality it is impossible to drive the shortest distance. The average transport distance is about 20% longer.31 According to Table 2 a small central heating system with the potential to supply a normal house with heat will use a fuel amount equivalent to an area of about 1.5 ha. A medium district heating installation would demand an area of about 653 ha, and the small power station 12000 ha or 120 km2, which is equivalent to a plantation of a square with 11 kilometres side length. The average transport distances are about 250 meters, 5.2 km and 25.3 km respectively. The energy demand for the fuel transport over the mentioned distances is between 0.01 and 0.44 percent and has been neglected in the calculations; even for transport to private customers this share is only 0.5%. Regarding the emissions caused by various transport means, in all those case tractor transport is still possible.31 In reality the transport to the power station, and very likely also to the medium district heating plant, will take
place with lorries, as tractor transport has a high injury and accident risk, it is energy demanding and very uncomfortable to cover long distances by tractors, and slow speed makes tractor use manpower-intensive and thus expensive! 6. CONCLUSION
The CFE system can be a step towards a more sustainable agricultural system. As a temperate agroforestry system, its agricultural part can bene®t from the biodiversity and microclimatic eects of the biofuel hedges, which will have a positive eect on farm economies and agriculture's energy balance. We emphasise that the CFE system is an ecologically interacting system that produces food and biofuel energy together. It uses the longer time-scale of the energy crop component as a means of stabilising the production of the food component and exhibits spatial complementarity of the crops. Biofuel complements other, intermittent renewable energy forms. It is easily stored, therefore it will play a large role in tomorrow's energy systems,6,11,15,29 where future large consumers, like industrial conversion sites to produce methanol or hydrogen,58 will demand large-scale plantations, but they are not feasible everywhere and not likely today. The CFE system is a decentralised solution enabling biofuel to enter the market smoothly, which is a big advantage today. When farmers can enter the heating market for smaller scale private customers, the CFE system is a highly pro®table choice, and it could pave the way for large-scale biofuel production. Ecological production means other related social bene®ts, like the reduction of the risk of potential groundwater pollution. The neutralisation of CO2 emissions from biofuel substi-
Energetic, economic and ecological balances of a combined food and energy system
tution indicates potentially large social bene®ts. Furthermore SRC on agricultural area and the substitution of fossil fuels with biofuels have been shown to result in a larger cumulative absorption of CO2 from the air than replacing forestry with SRC.25 All these aspects make us conclude that the CFE system is a win-win-win approach to several of the current problems agriculture and society face. The central value of about 300 Euro per hectare of biofuel hedge and the current hectare support from the EU are comparable in amount, which would allow to convert current set-aside payments to a scheme that re¯ects externality avoidance. Such a strategy would harmonise well with recent WTO agreements that aim to reduce the support of agricultural production but allow environmental protection.59 Current energy and CO2 taxes in i.e. Denmark or Sweden seem to cause a comparatively high price for biofuels41 but do not necessarily re¯ect the true externality costs. If energy prices imposed the proper so-called ``externality adders'', market forces would lead to a fast diusion of renewables that have lower total, i.e. internal and social, costs.58 This development likewise would enhance the market position of solid biofuels. AcknowledgementsÐBernd Kuemmel is supported by an EU grant: FAIR3-PL96-No. 1449. John R. Porter and Vibeke Langer acknowledge support from the Danish Agricultural Research Council.
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