Bio-fuel crops and P fertilizer liquid bio-fuels a “green gold”? – mitigate global climate change, (Europe) – promote energy security, and (USA) – support agricultural producers. (Brazil)

Bio-fuel crops and P fertilizer Policies aimed at promoting the use of liquid bio-fuels Brazil, PROALCOOL Programme: • A blending requirement that all gasoline used in Brazil contain a minimum of 25% anhydrous alcohol, • The banning of diesel-powered personal vehicles to boost the demand for ethanol powered vehicles; • A requirement that all government entities purchase 100% hydrated alcohol fuelled vehicles, • A taxing regime that is favourable to ethanol compared to gasoline, • Low interest loans for financing producer owned stocks; • A protective tariff of 20% ad valorem; • The potential for special production subsidies for the North-eastern section of Brazil; and • Brazil successfully reintroduced its flex-fuel vehicle in 2006 that runs on any blend of gasoline.

Bio-fuel crops and P fertilizer

Bio-fuel crops and P fertilizer

Bio-fuel crops and P fertilizer

Bio-fuel crops and P fertilizer Conclusions: Limited extent to energy security and this typically at high cost; Carbon taxes, tradable permits and energy conservation may be more cost-effective than bio-fuels in reducing greenhouse gas emissions; Where the agricultural sector is able to respond to higher price incentives. This depends on infrastructure, institutions, technology, the scale of production and other factors as is true for agriculture in general.

Bio-fuel crops and P fertilizer A typical 190 million l ethanol plant needs 460,000 t stock feed from 52,000 ha when yields are 8.8 t/ha

Bio-fuel crops and P fertilizer Technological developments in bio fuels could radically alter biomass requirements US: corn used for ethanol production doubled in the last four years Brazil: 6 million ha sugar cane planting in 2005 55% of crop for ethanol production China: annual ethanol production increase from 1 billion gallons to 1.7 billion gallons by 2010

Bio-fuel crops and P fertilizer

Bio-fuel crops and P fertilizer

Bio-fuel crops and P fertilizer

Bio-fuel crops and P fertilizer Global supply potential for ethanol Global acreage Supply as % of 2003 Crop (million hectares) global gasoline use, % Wheat 215 12 Rice 150 16 Corn 145 17 Sorghum 45 1 Sugarcane 20 6 Cassava 19 2 Sugar beet 5.4 Total 599 57

Bio-fuel crops and P fertilizer

Bio-fuel crops and P fertilizer Sources of crop growth

Bio-fuel crops and P fertilizer Potential for crop land expansion

Bio-fuel crops and P fertilizer Land suitability for crop land expansion

Bio-fuel crops and P fertilizer Potential yield increases, wheat

Bio-fuel crops and P fertilizer Fertilizer implications New bio fuel crops need fertilizers; The yield of other crop areas needs to be raised in order to sustain food production and other agricultural products and; There will also be opportunities to develop special fertilizer grades for use on energy crops

Bio-fuel crops and P fertilizer Past and Projected Global Fertilizer Consumption

Bio-fuel crops and P fertilizer Scenarios investigated Scenario 1 - Increase in Bio-Energy Crop Yield Scenario 2 – Early Adoption of High Yielding Technology Scenario 3 – Proportional (Ratio) Fertilizer Projections Based on Land and Crop Projections

Bio-fuel crops and P fertilizer Scenario 1 - Increase in Bio-Energy Crop Yield, sugarcane in Latin America   2015 2030 Base 3.75% 7.50% 15% Latin America 14.8 15.41 16.01 17.22 16.7 17.36 18.02 19.35

Bio-fuel crops and P fertilizer Scenario 1 - Increase in Bio-Energy Crop Yield, maize in North America   2015 2030 Base 3.75% 7.50% 15% North America 25.2 26.12 27.03 28.87 27.9 28.91 29.92 31.94

Bio-fuel crops and P fertilizer Scenario 1 - Increase in Bio-Energy Crop Yield, oil palm in Asia   2015 2030 Base 3.75% 7.50% 15% Asia 90.9 94.18 97.45 104.01 115.2 119.65 124.1 133

Bio-fuel crops and P fertilizer Scenario 2 – Early Adoption of High Yielding Technology achieving projected yields for 2030 and 2050 in 2015 and 2030 N P2O5 K2O Total 2005 86.8 35.8 26.8 149.5 2015 99.9 40.1 29.4 169.4 2030 111.9 43.4 32.6 187.9 2050 127.1 48.4 37.6 213.1

Bio-fuel crops and P fertilizer Scenario 3 – Proportional (Ratio) Fertilizer Projections Based on Land and Crop Projections base scenario for 2015 N P2O5 K2O Total 5.2 4.5 5.1 14.8

Bio-fuel crops and P fertilizer Scenario 3 – Proportional (Ratio) Fertilizer Projections Based on Land and Crop Projections base scenario for 2015 N P2O5 K2O Total 14.9 5.1 25.2

Bio-fuel crops and P fertilizer Scenario 3 – Proportional (Ratio) Fertilizer Projections Based on Land and Crop Projections base scenario for 2015 N P2O5 K2O Total 56.2 21.5 13.2 90.9

Bio-fuel crops and P fertilizer Scenario 3 – Proportional (Ratio) Fertilizer Projections Based on Land and Crop Projections Million tonnes plant nutrient, by increment bio-fuel crop production   2015 2030 Production Change Base 5% 10% 20% North America 25.2 26.3 27.5 29.8 27.9 29.2 30.4 32.9 Latin America 14.8 15.4 15.9 17.0 16.7 17.3 17.9 19.2 Asia 90.9 95.3 99.6 108.4 115.2 120.7 126.2 137.2 Other 38.5 28.0 World 169.4 175.5 181.5 193.6 187.8 195.2 202.6 217.4 Potential impact 6.1 12.1 24.2 7.4 29.6 3.6% 7.2% 14.3% 3.9% 7.9% 15.7%

Bio-fuel crops and P fertilizer Increment requirement when bio-fuel crop production increases in response to bio-fuel demand in 2015, million tonnes P2O5 : 5% 10% 20% North America 0.23 0.46 0.92 Latin America 0.17 0.33 0.67 Asia 1.03 2.07 4.13