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10.05.2005 / Hamburg2/ENFA-Workshop Folie 1 European Non-Food Agriculture E N F A University of Hohenheim, Germany, Jürgen Zeddies and Oliver Henniges.

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Presentation on theme: "10.05.2005 / Hamburg2/ENFA-Workshop Folie 1 European Non-Food Agriculture E N F A University of Hohenheim, Germany, Jürgen Zeddies and Oliver Henniges."— Presentation transcript:

1 10.05.2005 / Hamburg2/ENFA-Workshop Folie 1 European Non-Food Agriculture E N F A University of Hohenheim, Germany, Jürgen Zeddies and Oliver Henniges Kick-off-Meeting Mai 9 th – 11 th 2005 Hamburg, University Work Package 25 Bioethanol and Biodiesel

2 10.05.2005 / Hamburg2/ENFA-Workshop Folie 2 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

3 10.05.2005 / Hamburg2/ENFA-Workshop Folie 3 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

4 10.05.2005 / Hamburg2/ENFA-Workshop Folie 4 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

5 10.05.2005 / Hamburg2/ENFA-Workshop Folie 5 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

6 10.05.2005 / Hamburg2/ENFA-Workshop Folie 6 Raw material (oilcrops, cereals, beets) Regional dimension (Germany, EU-15, and EU-28) Assessment of supply elasticities Assessment of production potential

7 10.05.2005 / Hamburg2/ENFA-Workshop Folie 7 National markets (Germany) EU domestic market World market Markets for biofuel

8 10.05.2005 / Hamburg2/ENFA-Workshop Folie 8 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

9 10.05.2005 / Hamburg2/ENFA-Workshop 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

10 10.05.2005 / Hamburg2/ENFA-Workshop Folie 10 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

11 10.05.2005 / Hamburg2/ENFA-Workshop Folie 11

12 10.05.2005 / Hamburg2/ENFA-Workshop Folie 12 Supply elasticity in der EU 15

13 10.05.2005 / Hamburg2/ENFA-Workshop Folie 13 Supply potential for energy crops in Germany (base 1000 t)

14 10.05.2005 / Hamburg2/ENFA-Workshop Folie 14 Supply potential for energy crops in EU-15 (base 1000 t)

15 10.05.2005 / Hamburg2/ENFA-Workshop Folie 15

16 10.05.2005 / Hamburg2/ENFA-Workshop Folie 16

17 10.05.2005 / Hamburg2/ENFA-Workshop Folie 17 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

18 10.05.2005 / Hamburg2/ENFA-Workshop Folie 18 Wood Agricultural by products (straw) Liquid energy from crops (bio diesel/RME, ethanol Biogas Resources

19 Heating facilities for wood pellets Folie 19 10.05.2005 / Hamburg2/ENFA-Workshop

20 Folie 20 Biomass from: Wood, primarily old wood from buildings Agricultural by products (straw) Liquid bio energy Biogas Markets for bio energy - Electric Energy -

21 Electricity plants for biomass Folie 21 10.05.2005 / Hamburg2/ENFA-Workshop

22 Electricity plants from biogas Folie 22 10.05.2005 / Hamburg2/ENFA-Workshop

23 Folie 23 Bio diesel from oil crops Ethanol Synthetic fuel (biomass to liquid) Biogas Markets for bio fuel

24 Bio diesel plants capacity Folie 24 10.05.2005 / Hamburg2/ENFA-Workshop

25 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

26 10.05.2005 / Hamburg2/ENFA-Workshop Folie 26 Kyoto Protocol  CO 2 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?

27 10.05.2005 / Hamburg2/ENFA-Workshop 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

28 10.05.2005 / Hamburg2/ENFA-Workshop Folie 28 Tax Relief in the EU Source: FO Licht, Ethanol Production Costs – A Worldwide Survey

29 Bio ethanol Requirements EU Directive 2003/30 EG Share of renewable energy in fuels in 20062,00 % (+0,75 % points/year) 20115,75 % (  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 10.05.2005 / Hamburg2/ENFA-Workshop

30 Required Land Assumption: 5,75 energy-% ethanol blend Potential ethanol demand EU-25 (acc. to COLBERT) : 132 mln hl Cereals 85 %:112 mln hl Sugar beet15 %:20 mln hl Raw material requirement: Cereals31,8 mln t Sugar beet19,9 mln t Required land6,4 mln ha Cereals6,1 mln ha Sugar beet0,3 mln ha Total agricultural area EU-25:167 mln ha Set aside area EU-25:7,0 mln ha Data according to C OLBERT, D: EU Need for Biofuel Import? FO Licht World Ethanol Conference 2004, London, 9. Nov. 04 Folie 30 10.05.2005 / Hamburg2/ENFA-Workshop

31 World Production by Country Source: Dr. Christoph Berg, FO Licht, World Ethanol Conference 2003 EU need in 2010: 130 mln hl Folie 31 10.05.2005 / Hamburg2/ENFA-Workshop

32 International Trade 4.16 mln hl 4.77 mln hl Now: 1.5 mln hl Planned Mercosur Contingent 12 mln hl Source: FO Licht, Germany For comparison: World Production 400 mln hl CBI: 2.66 mln hl Folie 32 10.05.2005 / Hamburg2/ENFA-Workshop

33 Folie 33 Bio ethanol in Germany today...

34 10.05.2005 / Hamburg2/ENFA-Workshop Folie 34 Production Costs Germany Assumptions: Multiple feedstock plant a) 0,5 mln hl/year b) 2,0 mln hl/year Raw material Beet campaign (90 days): beet juice Rest of year: wheat  64 % ethanol from wheat, 36 % from beet Wheat Price: 100 €/t  Beet Price: ?

35 Production Costs Germany (p Wheat = 100 €/t incl. transport ) Folie 35 10.05.2005 / Hamburg2/ENFA-Workshop Please contact Prof. Zeddies (zeddies@uni-hohenheim) or Oliver Henniges (henniges@uni-hohenheim) for further information regarding this slide

36 10.05.2005 / Hamburg2/ENFA-Workshop Folie 36 Beet Price? Please contact Prof. Zeddies (zeddies@uni-hohenheim) or Oliver Henniges (henniges@uni-hohenheim) for further information regarding this slide

37 Production Costs in D (p Wheat = 100 €/t incl. transport ) Folie 37 Please contact Prof. Zeddies (zeddies@uni-hohenheim) or Oliver Henniges (henniges@uni-hohenheim) for further information regarding this slide

38 10.05.2005 / Hamburg2/ENFA-Workshop Folie 38 Bio ethanol in Brazil

39 Folie 39 10.05.2005 / Hamburg2/ENFA-Workshop Please contact Prof. Zeddies (zeddies@uni-hohenheim) or Oliver Henniges (henniges@uni-hohenheim) for further information regarding this slide

40 10.05.2005 / Hamburg2/ENFA-Workshop 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

41 10.05.2005 / Hamburg2/ENFA-Workshop 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

42 Bagasse Burning Folie 42 10.05.2005 / Hamburg2/ENFA-Workshop Please contact Prof. Zeddies (zeddies@uni-hohenheim) or Oliver Henniges (henniges@uni-hohenheim) for further information regarding this slide

43 10.05.2005 / Hamburg2/ENFA-Workshop Folie 43 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

44 10.05.2005 / Hamburg2/ENFA-Workshop Folie 44 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

45 International Comparison of Production Costs Folie 45 10.05.2005 / Hamburg2/ENFA-Workshop Please contact Prof. Zeddies (zeddies@uni-hohenheim) or Oliver Henniges (henniges@uni-hohenheim) for further information regarding this slide

46 Competitiveness against Gasoline in Germany Folie 46 10.05.2005 / Hamburg2/ENFA-Workshop Please contact Prof. Zeddies (zeddies@uni-hohenheim) or Oliver Henniges (henniges@uni-hohenheim) for further information regarding this slide

47 10.05.2005 / Hamburg2/ENFA-Workshop Folie 47 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%

48 10.05.2005 / Hamburg2/ENFA-Workshop Folie 48 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

49 10.05.2005 / Hamburg2/ENFA-Workshop Folie 49 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 %


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