Advertisement

BioEnergy Research

, Volume 6, Issue 1, pp 336–350 | Cite as

Financial Analysis of the Cultivation of Short Rotation Woody Crops for Bioenergy in Belgium: Barriers and Opportunities

  • Ouafik El KasmiouiEmail author
  • Reinhart Ceulemans
Article

Abstract

This paper analyses the financial performance of a poplar short rotation woody crop (SRWC) plantation in Belgium, from a farmer’s and an investor’s viewpoint, based on simulations from the newly developed model POPFINUA. The establishment, production and harvest costs were investigated to calculate the net present value (NPV) and the equivalent annual value (EAV) of the SRWC cultivation when the biomass chips were sold at a price of 40 € Mg−1 with a moisture content (m.c.) of 50 %. The calculated NPVs were 229 and −485 € ha−1, and the EAVs equalled 16.3 and −34.6 € ha−1 year−1 for the farmer’s and investor’s scenario, respectively. The break-even price at which the produced biomass could be sold at the farm gate excluding transport, handling, storage and profit margins of the involved companies was calculated using the levellised costs (LC) method and equalled 78.4 and 83.5 € oven-dried ton (odt)−1 for the farmer’s and investor’s viewpoint, respectively. Three harvesting strategies, applied on a SRWC plantation of 18.1 ha in Flanders (Belgium), were studied and compared. It became clear that preference should be given to more economic, small-scale harvesters instead of large-scale self-propelled harvesters, given the relatively limited surface available for SRWCs in Belgium. Furthermore, the inclusion of transportation over a distance of 50 km by truck increased the LC by 15.1 € odt−1. Moreover, subsidies such as establishment grants and/or yearly incentives proved indispensable to make this long-term investment profitable. This is particularly true for the scenario where an investor decides to cultivate SRWCs for energy purposes.

Keywords

Economic analysis Bioenergy crops Poplar Willow Feasibility/viability assessment 

Notes

Acknowledgments

The principal author is a Ph.D. fellow of the Research Foundation Flanders (FWO, Brussels). The research leading to these results has received funding from the European Research Council under the European Commission’s Seventh Framework Programme (FP7/2007-2013) as ERC Advanced Grant agreement no. 233366 (POPFULL), as well as from the Flemish Hercules Foundation as Infrastructure contract ZW09-06. Further funding was provided by the Flemish Methusalem Programme and by the Research Council of the University of Antwerp. Finally, we gratefully acknowledge both Joris Cools for excellent technical support and Kristof Mouton for logistic support at the field site and the information regarding biomass sales and agricultural machinery.

References

  1. 1.
    Dubuisson X, Sintzoff I (1998) Energy and CO2 balances in different power generation routes using wood fuel from short rotation coppice. Biomass Bioenerg 15(4–5):379–390CrossRefGoogle Scholar
  2. 2.
    European Commission (2008) 20 20 by 2020—Europe’s climate change opportunity. http://www.energy.eu/directives/com2008_0030en01.pdf. Accessed 20 Dec 2011
  3. 3.
    European Commission (2006) Renewable energy road map—renewable energies in the 21st century: building a more sustainable future. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0848:FIN:EN:PDF. Accessed 20 Dec 2011
  4. 4.
    European Commission (2007) An energy policy for Europe. http://ec.europa.eu/energy/energy_policy/doc/01_energy_policy_for_europe_en.pdf. Accesed 21 Dec 2011
  5. 5.
    Djomo SN, El Kasmioui O, Ceulemans R (2011) Energy and greenhouse gas balance of bioenergy production from poplar and willow: a review. Glob Chang Biol Bioenergy 3(3):181–197. doi: 10.1111/j.1757-1707.2010.01073.x CrossRefGoogle Scholar
  6. 6.
    De Cuyper B (2008) Poplar breeding programme in Flanders, Belgium. In: Pâques LE (ed) Treebreedex activity no. 5. INRA, Orléans, pp 3–4Google Scholar
  7. 7.
    Dillen SY, El Kasmioui O, Marron N, Calfapietra C, Ceulemans R (2011) Poplar. In: Halford NG, Karp A (eds) Energy crops. Royal Society of Chemistry, Cambridge, pp 275–300Google Scholar
  8. 8.
    Bradshaw HD, Ceulemans R, Davis J, Stettler RF (2000) Emerging model systems in plant biology: poplar (Populus) as a model forest tree. J Plant Growth Regul 19(3):306–313CrossRefGoogle Scholar
  9. 9.
    Mitchell CP, Stevens EA, Watters MP (1999) Short-rotation forestry—operations, productivity and costs based on experience gained in the UK. For Ecol Manag 121(1–2):123–136CrossRefGoogle Scholar
  10. 10.
    Styles D, Thorne F, Jones MB (2008) Energy crops in Ireland: an economic comparison of willow and Miscanthus production with conventional farming systems. Biomass Bioenerg 32(5):407–421. doi: 10.1016/j.biombioe.2007.10.012 CrossRefGoogle Scholar
  11. 11.
    Ericsson K, Rosenqvist H, Ganko E, Pisarek M, Nilsson L (2006) An agro-economic analysis of willow cultivation in Poland. Biomass Bioenerg 30(1):16–27. doi: 10.1016/j.biombioe.2005.09.002 CrossRefGoogle Scholar
  12. 12.
    Buchholz T, Volk TA (2011) Improving the profitability of willow crops-identifying opportunities with a crop budget model. Bioenerg Res 4(2):85–95. doi: 10.1007/s12155-010-9103-5 CrossRefGoogle Scholar
  13. 13.
    Ceulemans R, McDonald AJS, Pereira JS (1996) A comparison among eucalypt, poplar and willow characteristics with particular reference to a coppice, growth-modelling approach. Biomass Bioenerg 11(2–3):215–231CrossRefGoogle Scholar
  14. 14.
    Rosenqvist H (1997) Willow cultivation—methods of calculation and profitability. PhD thesis, Swedish University of Agricultural Sciences (SLU), Uppsala, SwedenGoogle Scholar
  15. 15.
    Global Bioenergy Partnership (2010) Analytical tools to assess and unlock sustainable bioenergy potential. http://www.globalbioenergy.org/uploads/media/1005_GBEP_-_Bioenergy_analytical_tools.pdf. Accessed 16 Mar 2012
  16. 16.
    Vandenhove H, Thiry Y, Gommers A, Goor F, Jossart J-M, Holm E et al (1999) RECOVER—relevance of short rotation coppice vegetation for the remediation of contaminated areas. Final report No. F14-CT95-0021c. SCK-CEN, Mol, BelgiumGoogle Scholar
  17. 17.
    Madlener R, Myles H (2000) Modelling socio-economic aspects of bioenergy systems: A survey prepared for IEA Bioenergy Task 29. IEA Bioenergy. http://www.task29.net/assets/files/reports/Madlener_Myles.pdf. Accessed 14 Mar 2012
  18. 18.
    Goor F, Jossart JM, Ledent JF (2000) ECOP: an economic model to assess the willow short rotation coppice global profitability in a case of small scale gasification pathway in Belgium. Environ Model Softw 15(3):279–292CrossRefGoogle Scholar
  19. 19.
    Bell J, Booth E, Ballingall M (2007) Commercial viability of alternative non food crops and biomass on Scottish farms—a special study supported und SEERAD advisory activity 211. Scottish Agricultural College (SAC), Midlothian, UKGoogle Scholar
  20. 20.
    Broeckx LS, Verlinden MS, Ceulemans R (2012) Establishment and two-year growth of a bio-energy plantation with fast-growing Populus trees in Flanders (Belgium): effect of genotype and former land use. Biomass Bioenerg 42:151–163. doi: 10.1016/j.biombioe.2012.03.005 CrossRefGoogle Scholar
  21. 21.
    European Commission (2012) Reference and discount rate (in %) since 01.08.1997. http://ec.europa.eu/competition/state_aid/legislation/reference_rates.html. Accessed 5 May 2012
  22. 22.
    Al Afas N, Marron N, Van Dongen S, Laureysens I, Ceulemans R (2008) Dynamics of biomass production in a poplar coppice culture over three rotations (11 years). For Ecol Manag 255(5–6):1883–1891. doi: 10.1016/j.foreco.2007.12.010 CrossRefGoogle Scholar
  23. 23.
    Dillen SY, Vanbeveren S, Al Afas N, Laureysens I, Croes S, Ceulemans R (2011) Biomass production on a 15-year-old poplar short-rotation coppice culture in Belgium. Asp Appl Biol 112:99–106Google Scholar
  24. 24.
    Pearson CH, Halvorson AD, Moench RD, Hammon RW (2010) Production of hybrid poplar under short-term, intensive culture in Western Colorado. Ind Crop Prod 31(3):492–498. doi: 10.1016/j.indcrop.2010.01.011 CrossRefGoogle Scholar
  25. 25.
    Meiresonne L, De Schrijver A, De Vos B (2007) Nutrient cycling in a poplar plantation (Populus trichocarpa × Populus deltoides ‘Beaupre’) on former agricultural land in northern Belgium. Can J For Res 37(1):141–155. doi: 10.1139/X06-205 CrossRefGoogle Scholar
  26. 26.
    Wang JR, Zhong AL, Comeau P, Tsze M, Kimmins JP (1995) Aboveground biomass and nutrient accumulation in an age sequence of aspen (Populus-tremuloides) stands in the Boreal White and Black Spruce Zone, British-Columbia. For Ecol Manag 78(1–3):127–138CrossRefGoogle Scholar
  27. 27.
    Rosenqvist H, Dawson M (2005) Economics of willow growing in Northern Ireland. Biomass Bioenerg 28(1):7–14. doi: 10.1016/j.biombioe.2004.03.001 CrossRefGoogle Scholar
  28. 28.
    Eurostat (2011) Labour cost structural statistics. http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Labour_cost_structural_statistics. Accessed 20 Mar 2012
  29. 29.
    Edwards WM (2009) Machinery management: estimating farm machinery costs. Iowa State University, Extension Service, Ames, IA, USAGoogle Scholar
  30. 30.
    Smeets EMW, Lewandowski IM, Faaij APC (2009) The economical and environmental performance of Miscanthus and switchgrass production and supply chains in a European setting. Renew Sust Energ Rev 13(6–7):1230–1245. doi: 10.1016/j.rser.2008.09.006 CrossRefGoogle Scholar
  31. 31.
    American Agricultural Economics Association (2000) Commodity costs and returns estimation handbook. AAEA Task Force on Commodity Costs and Returns, Ames, IA, USAGoogle Scholar
  32. 32.
    Paris P, Mareschi L, Sabatti M, Pisanelli A, Ecosse A, Nardin F et al (2011) Comparing hybrid Populus clones for SRF across northern Italy after two biennial rotations: survival, growth and yield. Biomass Bioenerg 35(4):1524–1532. doi: 10.1016/j.biombioe.2010.12.050 CrossRefGoogle Scholar
  33. 33.
    Pontailler JY, Ceulemans R, Guittet J (1999) Biomass yield of poplar after five 2-year coppice rotations. Forestry 72(2):157–163Google Scholar
  34. 34.
    Laureysens I, Bogaert J, Blust R, Ceulemans R (2004) Biomass production of 17 poplar clones in a short-rotation coppice culture on a waste disposal site and its relation to soil characteristics. For Ecol Manag 187(2–3):295–309. doi: 10.1016/j.foreco.2003.07.005 CrossRefGoogle Scholar
  35. 35.
    Labrecque M, Teodorescu TI (2005) Field performance and biomass production of 12 willow and poplar clones in short-rotation coppice in southern Quebec (Canada). Biomass Bioenerg 29(1):1–9. doi: 10.1016/j.biombioe.2004.12.004 CrossRefGoogle Scholar
  36. 36.
    ScarasciaMugnozza GE, Ceulemans R, Heilman PE, Isebrands JG, Stettler RF, Hinckley TM (1997) Production physiology and morphology of Populus species and their hybrids grown under short rotation. 2. Biomass components and harvest index of hybrid and parental species clones. Can J For Res 27(3):285–294CrossRefGoogle Scholar
  37. 37.
    Heilman PE, Ekuan G, Fogle D (1994) Aboveground and belowground biomass and fine roots of 4-year-old hybrids of Populus trichocarpa × Populus deltoides and parental species in short-rotation culture. Can J For Res 24(6):1186–1192CrossRefGoogle Scholar
  38. 38.
    Deckmyn G, Laureysens I, Garcia J, Muys B, Ceulemans R (2004) Poplar growth and yield in short rotation coppice: model simulations using the process model SECRETS. Biomass Bioenerg 26(3):221–227. doi: 10.1016/S0961-9534(03)00121-1 CrossRefGoogle Scholar
  39. 39.
    Deraedt W, Ceulemans R (1998) Clonal variability in biomass production and conversion efficiency of poplar during the establishment year of a short rotation coppice plantation. Biomass Bioenerg 15(4–5):391–398CrossRefGoogle Scholar
  40. 40.
    Flemish Ministry of Agriculture and Fishery (2008) How is the lease price for leased land and buildings calculated? http://lv.vlaanderen.be/nlapps/docs/default.asp?id=1013. Accessed 25 Jan 2012 (in Dutch)
  41. 41.
    Directorate General of Statistics and Economic Information (2011) Lease in agriculture (in Dutch). http://statbel.fgov.be/nl/statistieken/cijfers/economie/landbouw/financieel/pacht/. Accessed 26 Jan 2012
  42. 42.
    De Becker R, D’hooghe J, Mortier P (2009) Flemish gross standard balance for crops and livestock (2000–2005). Ministry of Agriculture and Fishery, department of Monitoring and Study, Brussels, Belgium (in Dutch)Google Scholar
  43. 43.
    Witters N, Mendelsohn R, Van Passel S, Van Slycken S, Weyens N, Schreurs E et al (2012) Phytoremediation, a sustainable remediation technology? II: Economic assessment of CO2 abatement through the use of phytoremediation crops for renewable energy production. Biomass Bioenerg 39:470–477. doi: 10.1016/j.biombioe.2011.11.017 CrossRefGoogle Scholar
  44. 44.
    Gasol CM, Martinez S, Rigola M, Rieradevall J, Anton A, Carrasco J et al (2009) Feasibility assessment of poplar bioenergy systems in the Southern Europe. Renew Sust Energ Rev 13(4):801–812. doi: 10.1016/j.rser.2008.01.010 CrossRefGoogle Scholar
  45. 45.
    Wright L (2006) Worldwide commercial development of bioenergy with a focus on energy crop-based projects. Biomass Bioenerg 30(8–9):706–714. doi: 10.1016/j.biombioe.2005.08.008 CrossRefGoogle Scholar
  46. 46.
    Mitchell CP, Keeping DJ, Ramsay FJ, Angus-Hankin CM (1998) CHDSS—coppice harvesting decision support system. Wood Supply Research Group, Forestry Department, University of Aberdeen, Aberdeen, UKGoogle Scholar
  47. 47.
    NEA (2004) Factor costs of freight transport: an analysis of the development in time (in Dutch). NEA Transport Research and Education/Advisory Service Traffic and Transport, Rijswijk The NetherlandsGoogle Scholar
  48. 48.
    Bergante S, Facciotto G, Minotta G (2010) Identification of the main site factors and management intensity affecting the establishment of short-rotation-coppices (SRC) in Northern Italy through stepwise regression analysis. Cent Eur J Biol 5(4):522–530. doi: 10.2478/s11535-010-0028-y CrossRefGoogle Scholar
  49. 49.
    Kauter D, Lewandowski I, Claupein W (2003) Quantity and quality of harvestable biomass from Populus short rotation coppice for solid fuel use—a review of the physiological basis and management influences. Biomass Bioenerg 24(6):411–427CrossRefGoogle Scholar
  50. 50.
    Buhler DD, Netzer DA, Riemenschneider DE, Hartzler RG (1998) Weed management in short rotation poplar and herbaceous perennial crops grown for biofuel production. Biomass Bioenerg 14(4):385–394CrossRefGoogle Scholar
  51. 51.
    Hill J, Nelson E, Tilman D, Polasky S, Tiffany D (2006) Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels. P Natl Acad Sci USA 103(30):11206–11210. doi: 10.1073/pnas.0604600103 CrossRefGoogle Scholar
  52. 52.
    Helby P, Börjesson P, Hansen AC, Roos A, Rosenqvist H, Takeuchi L (2004) Market development problems for sustainable bio-energy systems in Sweden (the BIOMARK project). Lund University, Lund, SwedenGoogle Scholar
  53. 53.
    Ericsson K, Rosenqvist H, Nilsson LJ (2009) Energy crop production costs in the EU. Biomass Bioenerg 33(11):1577–1586. doi: 10.1016/j.biombioe.2009.08.002 CrossRefGoogle Scholar
  54. 54.
    Heller MC, Keoleian GA, Volk TA (2003) Life cycle assessment of a willow bioenergy cropping system. Biomass Bioenerg 25(2):147–165. doi: 10.1016/S0961-9534(02)00190-3 CrossRefGoogle Scholar
  55. 55.
    Packo Agri NV (2011) Pricelist KUHN implements. Packo Agri NV, Zedelgem, BelgiumGoogle Scholar
  56. 56.
    Serup H, Falster H, Gamborg C, Gundersen P, Hansen L, Heding N et al (2002) Wood for energy production: technology–environment–economy. The Centre for Biomass Technology, Trøjborg, DenmarkGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  1. 1.Department of Biology, Research group of Plant and Vegetation EcologyUniversity of AntwerpWilrijkBelgium

Personalised recommendations