Memorandum submitted by the Agricultural
Biotechnology Council (abc)
EXECUTIVE SUMMARY
The UK has committed to substitute an increasing
proportion of transport fuels with biofuels, rising to 5% by 2009.
The objective is to reduce carbon dioxide emissions from the combustion
of carbon-based fuels, and so contribute to an overall reduction
in levels of so-called greenhouse gases.
In addressing this policy commitment, the UK
has yet to decide whether the substitution of fossil fuel consumption
will be based upon biofuels produced and processed from crops
grown in the UK, or imported from elsewhere.
The decision will take account of fiscal implications,
notably the fuel duty reductions needed to make biofuel processing
in the UK viable and competitive. It must also consider the wider
questions of what benefits home-grown crops for biofuel production
and their processing in the UK, will bring in terms of added value
to the UK economy and environment.
Other countries, notably France and Germany,
have already recognised that such benefits can be significant.
Compared with other EU member states, as well
as countries around the world, UK progress towards a biofuel processing
and production industry has been largely absent. Not only is this
difference related to variations in duty reduction, but also to
differences in the interpretation and implementation of EU policy
on the provision of appropriate incentives for pilot and developmental
processing facilities.
There is another, vital aspect to the decision-making
process. How can the viability and competitiveness of a UK-based
biofuels sector be enhanced through improvements in the crops
themselves, either in their production efficiency, or in their
suitability for conversion into biofuels?
The Agricultural Biotechnology Council estimates
that even within the current generation of GM herbicide tolerant
beet and oilseed rape crops, significant cost savings can be made
in the production of crops for biofuel, bringing potential savings
to the Exchequer in the order of £85 million per year (£50
million for beet and £35 million for oilseed rape).
This estimate is based on the reduced production
costs and higher yield potential of GM crops. Currently, prospective
investors in biofuels processing capacity in the UK are pressing
Government for an additional 6-10 pence/litre fuel duty rebate
on top of the 20 pence/litre tax rebate already available for
biofuels. Our calculations indicate that GM crops could close
that gap by 3.29 pence/litre in the case of beet crops for bioethanol
production, and by 2.43 pence/litre in the case of oilseed rape
for biodiesel.
These savings are derived exclusively from the
on-farm costs of crop production. They do not account for the
reduced fuel consumption (and therefore reduced CO2 emissions)
associated with the fewer sprays and cultivations required to
grow GM herbicide tolerant crops.
In the short-term, therefore, the production
of GM herbicide tolerant beet and oilseed rape as a feedstock
for biofuel production could offer a win:win solution for the
rural economy and the environment. Producing GM crops for non-food
purposes, as a renewable source of alternative fuels, may also
provide the basis for a more rational and balanced consideration
of the technology and its potential benefits, away from the disproportionate
hysteria, which has so often accompanied the debate over GM foods.
Longer term, new plant breeding technologies
offer the potential to bring additional gains in crop production
efficiency, as well as improvements in processing quality and
oil, sugar or starch content, in each case further enhancing the
relative economic viability of a UK-based biofuels sector.
1. BACKGROUND
1.1 Biofuels encompass a range of potential
crop uses, both existing and novel.
1.2 There is considerable consensus that
rates of increase in levels of so-called greenhouse gases (GHG)
are unsustainable and undesirable, in particular those of carbon
dioxide (CO2) from the combustion of carbon-based fuels.
1.3 Agricultural crops have the potential
to contribute to a reduction in CO2 emission relative to petroleum-based
fuels, because crop biomass is formed from carbon fixed from the
contemporary atmosphere ("current-account carbon"),
unlike fossil fuels, which are formed of carbon fixed millions
of years ago.
1.4 The agricultural biotechnology council,
abc, represents companies involved in research and commercial
applications of agricultural biotechnology. This broad area of
expertise encompasses a range of new technologies applied to plant
breeding and new crop production methods, including, but not exclusively,
applications of recombinant DNA technology, more commonly referred
to as Genetic Modification or GM technology. Other techniques
include genomics and related functional analytics, marker assisted
breeding and a range of enhanced plant breeding methods.
1.5 Turning to the potential for agriculture
to contribute to the area of biofuels, we believe the greatest
opportunity is in the provision of liquid fuel for vehicles. This
is a sector for which there are few practical and publicly acceptable
alternatives, but is nonetheless expected to lead to the largest
proportion of increase in carbon emissions over the coming decades.
1.6 There exist a range of opportunities
from the cultivation of crops which farmers grow already, and
their processing into either ethanol ("bioethanol")
for substitution of gasoline (petrol), or fatty acid esters ("biodiesel")
for substitution of diesel. There are few technologies which are
likely to offer a realistic and acceptable alternative to petrol
and diesel within the next 15 to 20 years.
1.7 In contrast, biomass for electricity
generation, whilst technically feasible, must compete economically
with a wide range of alternatives (nuclear, wind, wave, hydroelectric
and others), and mostly do not involve established agricultural
crops. Alternative crops such as biomass crops will need new husbandry
regimes and infrastructures to be established before they can
become a commercial reality. This of course not only presents
extra barriers to entry, but also results in less flexibility
of cropping, should changes in farm policy need to alter in the
future.
1.8 Current policy proposals for the substitution
of liquid transport fuel with biofuels (targets laid out in the
EC proposed Directive on biofuels), would require substantial
cultivation of appropriate crops.
2. UK CROPS WITH
POTENTIAL FOR
BIOFUEL PRODUCTION
2.1 The abc considers that the main crops
of relevance for the production of biofuels in the UK, within
a five to 10 year timeframe, are:
2.2 Oilseed rape for biodiesel. At the current
UK average yield of 3.25 tonnes per ha, and standard oil content,
oilseed rape can deliver over 1200 litres of biodiesel per ha.
2.3 Wheat or barley grain, sugar or fodder
beet, and possibly potatoes, for ethanol. Various estimates, plus
significant commercial production data (for example three major
plants in Spain), put ethanol yields from cereal grains at 2,400
to 4,000 litres per hectare. A good average is 2,700 l/ha at typical
UK wheat yields of 8 tonnes/ha. Sugar beet is already used for
ethanol production, notably in France, and yields of 4,750 to
6,000 litres per hectare are feasible.
3. AGRONOMIC
LIMITS, AND
THE MAXIMUM
POTENTIAL PRODUCTION
OF BIOFUELS
3.1 Assuming the EC proposed targets for
fuel substitution are to be met evenly between biodiesel and bioethanol,
it is possible to estimate the required crop area and relate these
to realistic limits on agronomic grounds.
3.2 We estimate that the maximum likely
area of oilseed rape which could be grown in the UK is around
1.35 million hectares (compared with the current approximately
0.4 million hectares). We estimate that 700,000 ha (above the
current cropped area) would be needed to grow oilseed rape in
order to produce the proposed 2009 target of 5% of diesel substitution.
This is therefore practically and agronomically feasible.
3.3 Meeting the proposed 2009 target for
petrol substitution from equal shares of sugar beet and wheat
grain, would demand around 250,000 hectares of beet (in addition
to the current 180,000 hectares used for sugar production), and
around 260,000 hectares of wheat grain. Again, given rotational
constraints, this is also possible.
3.4 In current land use, about half a million
hectares of land are set-aside from cropping, and this land could
be used for biofuel cropping. It is therefore welcome that current
proposals for the Mid-Term Review of the CAP make this provision.
4. POTENTIAL
CONTRIBUTION FROM
PLANT BREEDING
AND AGRICULTURAL
BIOTECHNOLOGY
4.1 It is generally recognised that neither
biodiesel from oilseed rape, nor bioethanol from cereal grains
or sugar beet, can currently be produced competitively with fossil
fuels without fiscal support, of which the most commonly supported
form is reduction of fuel duty. Even the current 20 pence per
litre duty reduction has not been sufficient to make production
cost-competitive and industry has estimated an additional 6-10
pence per litre is needed to change this dynamic. 1
4.2 However, there are a number of ways
in which the overall economics could be improved over time, given
investment and research and development incentives.
4.3 The plant breeding and agricultural
biotechnology industries are very active in a number of areas
which offer significant potential to improve the economics of
crop production, as well as efficiencies of raw material provision
and their efficiency of conversion to the appropriate fuel.
4.4 Gains in production efficiency through
seed are already being seen in the now vary large corn ethanol
industry in the USA, where over two billion US gallons of bioethanol
are produced per annum, representing 6% of all corn grown, and
predicted to rise to double that proportion in three to four years.
4.5 Crop yields per unit area are a major
contributor to the economics of any crop, especially a low-priced
commodity crop, which of course is essential for low cost production
of biofuels. Yield remains a major target in plant breeding and
agronomy. New technologies, including marker-assisted breeding
and GM technology, offer both direct and indirect routes to increase
crop yields. Exciting developments such as direct yield enhancement
from improved photosynthetic efficiency are some way off, however
other yield improvements using GM techniques, such as the development
of hybrid oilseed rape are already a commercial reality.
4.6 Indirect yield enhancements have been
widely reported from the current generation of pest-resistant,
disease-resistant and herbicide tolerant crops. Further gains
are anticipated from improvement in nutrient utilisation, which
will also have the benefit of reducing the amounts of synthetic
fertilizer usage.
4.7 Two clear examples of how GM crop technology
could help the economics of bioethanol production in the UK are
GM herbicide-tolerant (GMHT) sugar beet and GMHT oilseed rape.
These crops have been grown in trials in the UK since the late
1980s and the experience of having grown them in the Farm Scale
Evaluations has added to the considerable data available from
commercial production outside the UK.
Example 1—GM sugar beet saves 3.29p/litre
in bioethanol production
Research at the Brooms Barn Research Centre2
concluded that "Growing costs of sugar beet are currently
in the range of £18 per tonne and the use of GMHT would reduce
this to £15-16 per tonne. Lower production costs would also
allow beet to be grown for ethanol production with less need for
public funded tax breaks."
In area terms, the Broom's Barn research calculated
average savings of £154/ha for GM compared to conventional
beet crops. Expressed in terms of cost saving per litre of bioethanol,
this equates to 3.29 pence/litre, as shown in the calculation
below:
Conversion rate from harvested sugar beet to
bioethanol = 14.6 to 1.
Therefore 1 tonne of harvested sugar beet produces
68.5 kg of bioethanol.
68.5kg = 86.7 litres (density of bioethanol =
0.79kg/litre).
So each tonne of sugar beet can produce 86.7
litres of bioethanol.
Average non-GM beet yield is 54 tonnes/ha (source:
Broom's Barn).
Saving for GMHT beet of £154/ha = £2.85/tonne.
£2.85 divided by 86.7 litres = 3.29 pence
per litre.
Example 2—GM oilseed rape saves 2.43p/litre
in biodiesel production
Current average UK yields of winter oilseed
rape are approximately 3.25 tonnes/ha. Given average oil extraction
yields from crops averaging 40% oil content, and assuming average
conversion rates, the oilseed rape crop can deliver 1200 litres
of biodiesel per hectare.
Current growing costs for oilseed rape average
£235/ha or £72.30/tonne.
Trials work carried out in the UK, including
the Farm Scale Evaluations, have shown that on average, the new
GM hybrids, in combination with their companion herbicide, yield
14% more than their non-GM counterparts. Assuming that growing
costs remain the same (increased price of seed, balances lower
herbicide costs), then with GM oilseed rape, production costs
are reduced to £63.34/tonne.
This represents a net saving in production costs
of £8.97/tonne, which equates to a 2.43p/litre saving in
bio-diesel production costs.
5. GM HERBICIDE
TOLERANT CROPS:
PRODUCTION EFFICIENCY
& FOSSIL FUEL
SAVINGS
5.1 As well as improving prospects for an
economically viable UK biofuels industry, the production methods
associated with GM crops can result in significant fuel savings
compared with current practices. This in turn supports the overall
objective of reducing greenhouse gas emissions.
5.2 Weeds compete with the crop for light,
water and nutrients and so reduce yield. Some, such as charlock
in oilseed rape can also affect the wholesomeness or quality of
the harvested crop. Traditionally, farmers have opted for a cost-effective,
"pre-emptive" strike approach to weed control, which
includes the use of residual herbicides. These are applied just
before or soon after the crop has emerged. These residual herbicides
control most of the weeds as they germinate and continue to do
so throughout the growing season. However, in order for them to
work to their highest efficiency, they need to be applied to a
fine level soil surface, which ensures good contact with the soil.
Numerous cultivations and techniques are needed to establish such
a fine seedbed. With GM crops the herbicide used is a contact
herbicide and is applied to the crop if and when needed. This
can mean two key changes:
— Farmers spray less often. Studies
at Scottish Agricultural Colleges5 showed that cost effective
weed control in GM oilseed rape could be achieved with one singe
pass compared to the current two or three passes. This in turn
saves fuel use in tractors. In Canada it is estimated that they
now use 6,000 tonnes less herbicide on the oilseed rape crop than
they did before GM crops3. Similar reductions would accrue in
the UK and independent research4 shows for example that a 50%
GM adoption rate would result in a 32% reduction in herbicide
use. Such reductions could also save fossil fuel use in manufacturing,
transport and application.
— Farmers no longer have to cultivate
the soil as much, because they are not using residual herbicides.
This means that they not only improve soil structure and reduce
soil erosion, but also save fuel. Since the introduction of GM,
Canadian farmers are now using 31 million litres less fuel to
farm the same area of crop3 (enough to fuel 10,000 cars). In the
UK it has recently been shown in independent studies5,6 that in
the oilseed rape crop (450,000 Ha), it currently takes 52.2 million
litres of fuel to establish and spray herbicides onto the crop.
The adoption of GM technology would facilitate the uptake of minimal
cultivation and this combined with fewer applications of the companion,
contact herbicide would mean that the same area of crop could
be grown using 36 million litres of fuel. This in turn represents
a saving in fuel use of 16 million litres, equivalent to reduced
greenhouse gas emissions of 57,000 tonnes and further production
cost savings of £3 million per annum.
5.3 In simplistic terms, efficiency of production
can be calculated by looking at fuel out to fuel in ratios. At
the moment, UK oilseed rape production is running at a 12:1 efficiency
ratio. With the improved yields and reduced inputs associated
with GM HT oilseed rape, this ratio can be increased to 19:1.
5.4 This means that the adoption of GM HT
crops can not only enhance the physical yield potential and production
efficiency of agricultural crops for biofuels, but can do so in
a way which reduces dependence on fossil fuels and other inputs.
6. FUTURE POSSIBILITIES:
RAW MATERIAL
YIELD AND
QUALITY
6.1 Higher oil content (in the case of Oilseed
rape) and sugar or starch content (beet and cereal crops) are
key components of the efficiency and economics of processing.
6.2 Producing hybrids using GM, rather than
conventional hybrid techniques allows for a wider genetic pool
to be used as parental lines. This coupled with strategy of selection
breeding for higher oil content has meant that already, the GM
hybrids used in the Farm Scale Evaluations have on average a 1%
higher oil content than conventional hybrids. In Canada, where
the breeding programme is more mature, 2% is now being achieved.
Advances such as these can add further efficiency. For example,
the 1% increase in oil content, will reduce production costs of
bio-diesel by a further 1p/litre to 3.43p/litre.
6.3 Current GM research and plant breeding
are targeting not only higher oil contents (it is thought that
with GM 50% is possible), but also looking to improve the oil
profile, so allowing for both better conversion and combustion
efficiencies.
6.4 Grain crops (wheat and barley) are a
good source of carbohydrates, mainly starch. Work is underway
by several abc member companies to improve the extractable and
fermentable cereal carbohydrates. These measures, leading to higher
ethanol yields, will help overall economics. Both conventional
and transgenic approaches are involved.
7. CONCLUSIONS
7.1 Agricultural crops provide an opportunity
to make a major contribution to national and international commitments
to reducing emissions of greenhouse gases, as well as bringing
significant benefit to the UK economy and particularly the agricultural
sector.
7.2 abc members believe that advanced plant
breeding and biotechnology can make a major contribution to the
economics and efficiency of biofuel production.
7.3 Even within the current generation of
GM herbicide tolerant beet and oilseed rape crops, significant
cost savings can be made in the production of crops for biofuel,
equivalent to a minimum of 3.29p/litre for bioethanol and 2.43p/litre
for biodiesel.
7.4 Expressed in terms of the biofuel duty
rebate, such efficiency gains would imply savings to the Exchequer
in the order of £85 million per year (£50 million for
beet and £35 million for oilseed rape).
7.5 The establishment of a UK-based biofuel
production and processing capability will demand suitable incentives,
beyond simple duty reduction, but including provision of conditions
which encourage investment in commercial scale pilot operations,
and the easier availability of new plant varieties, including
those using GM technology.
7.6 abc members believe that current GM
technology offers real possibilities to increase crop production
efficiency so making bio-fuels more of an econiomic reality. This
can also be achieved in a more environmentally friendly way and
their production which has reduced reliance on inputs will save
still further on greenhouse gas emissions.
REFERENCES
1. "The case for a fuel duty reduction
for bioethanol", British Sugar, December 2002 (htttp://www.britishsugar.co.uk/bsweb/biofuel/briefing.htm).
2. May, MJ. 2003. Economic consequences
for UK farmers of growing GM herbicide tolerant sugar beet. Annals
of Applied Biology. 142, 41-48.
3. Canola Council of Canada. 2001. http//www.canola-council.org/production/impactsurvey.pdf.
4. Phipps, R, Park, J. 2002: Environmental
benefits of Genetically Modified crops—Global and European
perspectives on their ability to reduce pesticide use. Journal
of Animal & Food Sciences. 11: 1-18.
5. Booth,EJ, Walker, RL, Walker KC: The
use of herbicide tolerant oilseed rape with minimal cultivation
techniques. Proceedings Crop Protection in Northern Britain 2002.
6. Walker, RL, Wightman, PS, Booth EJ, Walker,
KC.: Energy balance evaluation of minimal cultivation techniques
for establishing oilseed rape comparing herbicide tolerant and
conventional systems GCRIC Congress, July 2003.
July 2003
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