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06/09/2004 - Plants and animal waste could become viable alternatives to fossil fuels in providing energy and materials if governments changed strategies, according to a new OECD report out today.
Instead of offering financial incentives or subsidies to stimulate the use of such organic material, known as “biomass”, governments should encourage technical innovation as a way of narrowing the price gap with oil and gas products. This would stimulate demand and boost the supply of bioproducts. Indeed, the recent volatility in oil prices has underlined the potential increased cost competitiveness of energy and raw materials produced from biomass.
The report considers that financial incentives for bioproducts, currently used in many countries, should be avoided as they distort markets and lead to a long term dependency on subsidies. Agriculture as a whole is under pressure to reduce overall support levels and establish carefully targeted policies and market-based approaches. Similarly, the report argues against subsidies favouring the use of fossil fuels.
According to the report, long-term strategies should be developed that recognise the potential of local resources and encourage the establishment of bio-refineries to recycle a range of farm by-products in addition to using grains, oilseeds and sugar. Such complexes would be capable of producing both energy and materials derived not only from annual crops but also grass, short rotation trees, cereal straws and other by-products.
The report, Biomass and agriculture: sustainability, markets and policies, comprising a series of papers presented by international experts, argues that a significant shift could take place this century from a fossil fuel to a biomass-based economy. To aid this process it suggests creating carbon markets which would provide credits to biomass producers for displacing fossil fuels.
The report also reveals that:
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The prices of some niche market bioproducts such as plastics derived from arable crops are already competitive with certain petroleum-based plastics. The car industry, for example, is making increasing use of bioplastics.
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Around 7% of heat generation and 1% of total electricity in OECD countries is provided by agricultural bioenergy. In developing countries an estimated 25% of total energy demand is met by biomass, principally in the form of firewood and animal dung.
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Because bioethanol, produced from sugar and grains, can be used in existing engines with little modification, it is easier to exploit than other alternative transportation fuels such as hydrogen.
The report calls for international standards and codes of practice to be established for biomass products to ensure that greenhouse gas emissions are reduced and environmental benefits are maximised. A better assessment of costs and benefits taking into account economic, environmental and social aspects is therefore needed. It adds that clear lines of communication should be established between the suppliers, processors and potential users. Also, public education campaigns about the biomass sector should be developed.
Journalists may obtain a copy of the report from the OECD’s Media Relations Division (tel: + 33 1 45 24 97 00). For further information see the OECD website at www.oecd.org/agr/env and the dedicated Biomass and Agriculture website or contact Kevin Parris, OECD’s Food, Agriculture and Fisheries Directorate (tel: +33 1 45 24 95 68).
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