Exploring the potential for calories and bioenergy in France

Eva Gossiaux, Pierre-Alain Jayet , INRAE, France

The current agricultural production system is investigated in terms of biomass supply for both food calories and energy.

In the European Union, as in many EU member states, public policy projects are outlined to respond to the multiple arising challenges such as food security, energy transition and rising energy demand, along with the transversal objective to reduce greenhouse gas emissions and mitigate the effects of climate change. Biomass, while having various enduses and competing for already pressured production resources (land, water), remains the primary source of renewable energy in the European Union. Although, the share of agricultural

crops and co-products, dedicated energy crops and waste reuse would have to increase to meet European targets, adding pressure on our agricultural systems to meet multiple purposes: food, feed and energy production, and a significant role in the mitigation of GHGE and the protection of the environment. Identifying the availability and scale of resources across territories is crucial to determine the viability of our policy responses to the issues at stake and the role of biofuels particularly, but also to foster the development of stable and sustainable biomass value chains. We propose to study to which extent the current agricultural production system of the European Union could meet such ambitious objectives, in a technically and economically realistic environment, in terms of biomass supply for both food calories and energy, and provide an assessment of the tensions it imposes on the system. We choose to focus on secondgeneration biomass feedstocks as a development pathway to use and produce biomass more efficiently, and to investigate the role of non-food feedstock in alleviating the competition for agricultural biomass and the pressure on the environment, although the competition for land can remain. We represent the potential of agricultural biomass production for road transport biofuels. The production set illustrated in this article is for France, as a preliminary exercise, by varying the thresholds for food calories and bioenergy simultaneously. Results at the EU scale will be presented at the EUBCE 2021.

METHODOLOGICAL ELEMENTS

Our analysis relies on the agroeconomic supply-side model AROPAj [1]. AROPAj is a linear programming model describing the annual choices of the European farmers in terms of land allocation among numerous crops, vegetables and animal production and other activities, as well as the associated pollution (CH4 and N2O emissions from various sources). The farmers are clustered in farm groups within each region based on a statistical representation of the techno-economic characteristics observed in FADN individual data to represent a wide array of technical constraints and behaviors among European farmers. The current version of the model is based on the year 2012, the scope is EU-27, and we use it in aggregate mode, which aims at selecting the level of all supply variables for each farm group to maximize the total gross margin of the system, subject to several constraints related to cropping requirements, animal breeding, land endowment and CAP directives.

For the purpose of our analysis, the AROPAj model is augmented by allowing for the net food calories (accounting for on-farm consumption) and biofuel quantities produced to be constrained across farm-groups, differentiating the respective production of biodiesel and bioethanol from the agricultural resources produced by the system, weighted by crop and fuel dependent conversion coefficients. Note that we only introduce the transformation of biomass to biofuels in AROPAj through this single fuel yield coefficient, without accounting for market considerations, nor transportation or processing costs.

Quantities related to food calories are expressed in metric tons of soft wheat equivalent (tsweq), based on the caloric content for each product with respect to that of soft wheat. Furthermore, as the country’s dependence on imports for proteins is already one of the main issues at stake for its food security, we track changes in domestic food production regarding the production of proteins. We used FAO data and methods to calculate caloric content and protein content in terms of caloric yield [2] [3].

We introduce several perennial crops in the model and the collection of conventional crop residues potentially available for biofuel transformation. Agricultural by-products yields are derived on the basis of an existing methodology [4] [5] [6]. We use documented crop-specific correlations to compute residue-toyield ratios based on farm-groups known crop yield. We then calculate the potential yield of crop residues in each farm-group, using default residue collection rates of 40% for cereals and 50% for corn, rapeseed and sunflower which complies with technical constraints and is in line with the average environmental requirements for the preservation of organic carbon stocks commonly used in the literature. Miscanthus x Giganteus and Switchgrass are introduced in the AROPAj model by using the “Faustmann” rule to compute net present values [7]. Potential yields are econometrically correlated to the farm-group cereal yield and allow us to determine the optimal duration of rotation so as to maximize the gross margin of cultivating the crop over time with annual harvests. From there, we can calculate the average yield of dry matter per year and the discounted costs at the farm-group level [8]. This is an imperfect estimation, mainly because of a lack of data; however, it can be considered as a reasonable representation of feasible production observed for these crops under favorable conditions. We include 4 other perennial crops which have been widely explored for bioenergy and are susceptible

a) Aggregate gross margin (M€) b) Aggregate GHG emissions (MtCO2eq)

c) Shadow price associated with the calorie constraint (€/kgsweq) d) Shadow price associated with the biodiesel constraint (€/kgoe)

Notes: In linear programming problems, a shadow price or dual value is associated with each constraint. It represents the marginal cost on the whole system of strengthening the constraint, in terms of the decrease it incurs in the gross margin at optimum, therefore defining an implicit price for the production under consideration. Figure 1.c. for instance depicts the marginal cost for the agricultural system of an increase in the food calories requirement. The negative sign on these values is only related to the technical specification of the constraint in the model and can be disregarded for interpretation.

Figure 1 - Production frontier obtained for France with 1138 simulations given various biofuel and food calories production goals. Along the x-axis, we vary the net calorie production threshold, QCL, expressed in kilotons of soft wheat equivalent (ktsweq). Along the y-axis, QNR denotes the targeted total production of biofuels, in kilotons of oil equivalent (ktoe). In each panel, this same production set is contrasted in terms of various characteristics of the solution that was reached under each pair of constraints.

Figure 2 - Evolution of the area sharing (in % of UAA) of cereal crops, oilseeds and proteins, energy crops, fodders, grasslands (permanent and temporary) and fallow lands for various calorie thresholds, ranging from 0 to 87500 ktsweq, and biofuel targets, from 5000 to 40000 kgoe (split between biodiesel and bioethanol according to a fixed ratio). As background, the UAA of mainland France in AROPAj is 23.6 Mha.

to be grown as energy crops in Europe: Eucalyptus, Black Locust, Poplar, and Willow. As such, we can explore diverse sources of biomass with geographical heterogeneity, in terms of both profitability and biomass production efficiency. To document these crops in the model, we follow the crop management itinerary advised by the LIGNOGUIDE project publications[9] [10]. We compute yields based on an econometric relation between Willow and Oat yield, adjusted for the other crops to meet an average reference yield. The possibility to grow Eucalyptus, which shows more sensibility to cold, is restricted to regions with suitable conditions. We implement the model and conduct simulations by varying the level of 2 parameters of interest: QCL, the net calorie production threshold, and QNR, the targeted amount of biofuels. Within this total amount, we assume the diesel to gasoline ratio to remain constant and equal to 3 (in accordance with the EU Commission projections [11]) in all simulations. The benchmark situation is when both QCL and QNR, and the associated constraints, are null (not binding), which does not mean that no calorie production nor biomass production will result from the optimization program, depending on their profitability only. We then increase both targets incrementally until the model fails to be solvable. This process allows us to determine the boundaries of the feasible production set for the country, in terms of calories and biomass production, in a technically and economically realistic environment (under the initial conditions), and to explore the outcomes within this area. The analysis is prospective and does not account for potential price effects nor climate change impacts.

RESULTS

As a first exercise, we determine the jointly reachable biofuel and calories targets for France, under the current economic and technical conditions as represented in the model. Our results show great potential for France agricultural sector to produce biomass for energy. The potential quantity of biofuels ranges from 13.8 Mtoe (unconstrained optimum) up to 40 Mtoe under nonbinding food calories requirements, corresponding to the transformation of 180 Mt of agricultural biomass, in dry matter. The joint production set for the French agricultural system is presented in Figure 1 and contrasted in terms of various characteristics of the solution that was reached under each combination of simultaneous constraints.

The dual values depicted in 1. (c) and 1. (d) represent the cost, in terms of loss in the total gross margin of the production system, and of the production of the additional biomass associated with the extension of the constraints. These values stem from the adjustment of the whole system, the production cost and the opportunity cost of growing biomass and/or food; we do not isolate the specific cost terms associated to this production. As cautious as we should be regarding the comparison between the shadow prices and actual prices, the dual values illustrate the extent to which each of the constraint is binding and thus the burden for the agricultural system to produce more biomass for food or energy from a certain point of production. The largest part of the production set we have determined, up to 25 Mtoe of biofuels and 60 Mtsweq appears like reasonably achievable targets to be reached in a potential equilibrium, in the current economic and physical conditions of French agriculture, with or without prioritizing one of the 2 targets. However the dual values, notably for the biofuel constraints, grow exponentially as we go up to the frontier.

Quite ambitious targets could therefore be reached on both fronts but would potentially impact food and energy prices (see dual values) and require great structural and geographical changes in the French agricultural production system. Figure 2 illustrates the changes in the area dedicated to several major activities when the production of dietary calories is constrained to increase, and for various levels of biofuel production. We can see how higher biomass requirements for biofuel exacerbate the land conversion patterns induced by an increase in calories production. Caloric requirements complicate biomass production efficiency and its potential to increase, and conversely, because both food and energy crops aim at superseding others on highly productive lands and taking up land used to produce calories inefficiently (i.e. grasslands), compensated by a substitution with other animal feed sources, namely forage and onfarm consumption of cereals.

Changes in animal feed play a key role in adjusting to the land requirement of demanding constraint, freeing up space for energy and food at a lesser cost than displacing conventional crops for example, in terms of aggregate revenue loss. As such, animal activities appear as the main adjusting factor to combine food and energy production. While the amount of cereals produced decreases with biofuel production, we can observe a spatial recomposition, cereal production

Figure 3 - Evolution of the regional average area share dedicated to cereals (soft and durum wheat, barley, oats, rye, maize, and other cereals), grasslands (permanent and temporary) and energy crops (miscanthus, switchgrass, eucalyptus, black locust, poplar, willow) when increasing the biofuel target, for a given calorie threshold QCL=65000 ktsweq .

gradually concentrating in traditional grain-producing areas while the cultivation of energy crops becomes more and more predominant in the west and south of the country to produce biomass more efficiently. More specifically, when the biofuel target becomes more challenging to reach, the system prioritizes the switching of cereals for highyield annual crops, miscanthus and switchgrass, as well as, in smaller proportions, poplar in central regions and eucalyptus in Brittany and other regions with oceanic climate, while the share of land dedicated to more remunerative energy crops (as willow and black locust) increases more slowly. The type of assessments conducted in this work allows to outline a food & fuel production frontier in a technically and economically sound environment, although imposing quotas on the production of calories and biomass is obviously suboptimal for this system and somewhat unrealistic. If the feasible set reveals a high

production potential along the two dimensions, the implicit high prices associated with the two constraints show that this potential could only be achieved at the cost of substantial structural and spatial changes of the agricultural production system. Growing of energy crops requires a significant share of land to be diverted from food production and complicates the land allocation choices, even more so for highly productive lands, where great crop potential is found for both cereals and perennial coppices. We show in particular the emerging tension on animal production and even more on animal feed. The introduction of perennial crops in the choice set, with a targeted level of production, pushes the system to switch from profitable activities to producing food calories more efficiently (i.e. displacing animal breeding for the main part).

Note that including the effect of the intensive margin would probably enlarge this production set and yield more optimal solutions precisely because it eases the competition for land to some extent. Finally, we find that food and bioenergy production targets jointly induce significant greenhouse gases emissions reductions. This would be mainly due to the saved methane emissions from a lesser livestock production and the introduction of perennial crops with low fertilization requirements supplanting grasslands and conventional crops. Impact on water use and other pollution, however, should be investigated. We should also note that these estimations do not consider emissions or pollution related to the transportation of biomass and the transformation processes, but our analysis can help complement life cycle GHG emissions assessments of biofuels, which provide more complete estimates by including land use change impacts.

References available at page 51.

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