21 Oktober 2014

Seizing the opportunity of a new agricultural economy

Impact of Europe’s biorefineries extends way beyond farming

Europe should be pushing for the rapid expansion of its network of biorefineries, to produce European food, fuel and feed, as well as a range of other high-value products that replace fossil fuels, writes Robert Wright.

There are many challenges facing new Agriculture Commissioner Phil Hogan. Managing one third of the EU’s budget; TTIP negotiations; dealing with the fall-out from the Ukraine crisis to name but a few. But the Commissioner also has a historic opportunity: to help drive the creation of a new biobased agricultural economy, built around European biorefineries.

With all the pressures it faces, Europe should be pushing for the rapid expansion of its network of biorefineries, which use European biomass, grown on European farms, to produce European food, fuel and feed, as well as a range of other high-value products that replace fossil fuels.

The importance of this potentially revolutionary economic system for agriculture and farmers can already be seen. By creating attractive demand for biomass feedstocks, leading to additional and regular income streams for farmers, it allows farmers to invest in increased mechanisation, better quality seeds and improved farming methods. That in turn improves their productivity, meaning more output of food, feed and fuel from every farmed hectare.

For the farmers of wheat, maize and sugar beet – which account for 90% of the raw material which goes into Europe’s renewable ethanol biorefineries – the economics of farming are being transformed. And this is only the start. Advanced production technologies enable the production of so-called second-generation ethanol. That means even more value for farmers from the same feedstock thanks to cellulosic and other agricultural residues.

Biorefineries are also helping European farmers by increasing the availability of locally produced, high-protein animal feed. Europe currently has a gaping deficit in animal feed with over 70% of what we use being imported from 3rd countries, such as soya meal from South America. Ethanol biorefineries help replace the need for imported soya meal and create a virtuous circle, helping to reduce the cost and environmental impact of European’s animal feed requirements and at the same time creating more productive, sustainable rural communities in Europe.

But the impact of Europe’s biorefineries extends way beyond farming. Rural biorefineries are economic hubs, producing green transport fuel, animal feed, food and beverage ingredients, biobased energy and chemicals. The advantages of proximity mean that these biorefineries are acting as hubs not just for agricultural supply, but also around which clusters of new biobased production are being established.

Europe’s rural population enjoys, on average, an income just two thirds of that of their urban cousins. Nearly 5 million full-time jobs in agriculture disappeared across the EU between 2000 and 2012. Europe’s biorefineries, situated in the countryside, provide an opportunity to reverse this decline. Every new biorefinery creates, on average, 3,000 high quality jobs, both directly, and with the contractors, engineers, technicians, transporters and others needed to service them. More employment means more money for the local economy, and more likelihood that local schools and communities continue to function.

To get a sense of the economic potential of each biorefinery you just have to look at the US. A wave of advanced renewable ethanol biorefineries is now coming on stream, with the first opening just recently in Iowa. This biorefinery alone is predicted to generate $24 billion in economic output for Iowa over the next 20 years.

For many the biobased economy might seem too good to be true. It isn’t. Europe has some of the most efficient agricultural production in the world and is already well advanced in key technologies. By driving further agricultural efficiency and putting to use degraded and abandoned land, Europe has the opportunity to lead this innovative new sector and to realise the massive potential of biorefineries and the biobased economy.

So the real question is not whether, but how we can best advance this new biobased economic model.

It is essential that we establish the right policy framework. As this economic system is driven by biorefineries, we first need to create stable demand for their primary product: renewable ethanol. We need a supportive and long-term policy framework that gives a clear signal to those who are planning to invest in a new rural biorefinery that the market for ethanol will be there after 2020. We need to learn the lessons from the US experience, where the mandating of ethanol blending rates through the Renewable Fuel Standard has underpinned rural regeneration and cut US oil dependency at the same time.

So Europe needs to move quickly to resolve the current discussions around the Renewable Energy and Fuel Quality Directives and provide clarity to investors. And we need a more holistic policy approach; one which re-focuses Horizon 2020, the CAP and structural funds towards biobased technologies and agricultural productivity; and recognises the vital importance of biorefineries and ethanol in the 2030 Energy and Climate Framework and energy security strategy.

But what we need more than anything is leadership. Europe’s rural communities need a Commissioner that recognises this historic opportunity and is prepared to push the creation of this new economic system to the top of the Commission’s policy agenda. We hope that Mr Hogan is that man.

 

Source: Euractiv, 2014-10-14.
Author: Robert Wright (Secretary General of the European Renewable Ethanol Association (ePure))

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