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The Biofuel Revolution: Implications for CGIAR ‘Public Goods’ Research Kenneth G. Cassman, Director Nebraska Center for Energy Sciences Research University of Nebraska—Lincoln www.ncesr.unl.edu Mega Trends Rapid rate of economic growth in most populous developing countries

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slide1

The Biofuel Revolution: Implications for CGIAR ‘Public Goods’ Research

Kenneth G. Cassman, Director

Nebraska Center for Energy Sciences Research

University of Nebraska—Lincoln

www.ncesr.unl.edu

8th CGIAR SC meeting

mega trends
Mega Trends
  • Rapid rate of economic growth in most populous developing countries
    • Per capita increases in consumption of energy and livestock products
  • Climate change and increasing public concern about protection of environmental quality and natural resources
  • Uncertainty of petroleum supply
    • Political instability in oil-producing countries
    • Decreasing replacement of petroleum reserves
    • Rising petroleum and motor fuel prices

8th CGIAR SC meeting

energy consumption and income are linked
Energy Consumption and Income are Linked

5 billion low-income people in countries with rapid economic growth rates

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response to rising petroleum prices
Response to Rising Petroleum Prices
  • Increased public and private sector investment in expansion of ‘first generation’ biofuels production capacity from starch, sugar, and oilseed crops
  • Convergence of energy and agriculture
    • Highest value use of these crops is now as a biofuel feedstock, not as food or livestock feed
    • Rapid rise in crop commodity prices and spillover to non-biofuel crops and forages
    • Expansion of biofuel crop area
  • Abrupt change from 50 years of supply-dominated crop commodity markets to demand-driven markets

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slide6

Ethanol feedstock is now the highest value use for maize. Breakeven maize price versus ethanol price; current CBOT ethanol price is about $1.80/gallon ($0.48/L). Assumes US$10/Mbtu for natural gas.

Current ethanol price justifies corn price of ≈ $3.90/bu ($154/metric ton)

Natural gas @ $6 per Mbtu and current ethanol price justifies corn @ ≈ $4.25/bu ($167/metric ton)

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slide7

Corn ethanol co-product distillers grains are a nutritious livestock feed:

  • 30% CP(65% UIP), 0.8% P, 11% fat, 40% NDF
  • High fiber energy source with high digestibility
  • Energy content and feeding value ~125% (wet or dry) of corn; can replace 40% of beef cattle diets
  • Sulfur content - .35 to 1.0%, variable

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slide8

Expansion of USA Maize-Ethanol Production

40%

32%

Percentage of projected USA maize production, assuming 36 Mha planted maize area and trend line yield increase

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expansion of biofuel production is a global phenomenon
Expansion of Biofuel Production is a Global Phenomenon
  • Brazil: tremendous capacity to increase ethanol production from sugarcane, biodiesel from soybean and perhaps oil palm
  • Indonesia/Malaysia: rapid expansion of biodiesel from oil palm (perhaps also Nigeria and DR-Congo)
  • Europe and Canada: expansion of biodiesel from canola

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biofuel crops are highly concentrated in a few countries
Biofuel crops are highly concentrated in a few countries
  • Argentina + Brasil + USA account for:
    • 48% of global maize production; 65% of maize exports
    • 81% of global soybean production
  • Indonesia + Malaysia account for 81% global oil palm production
  • Brasil produces 33% of global sugarcane
  • USA accounts for 56% of global humanitarian food aid

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promise of the biofuel boom
Promise of the Biofuel Boom
  • Most exciting opportunity for agriculture since WWII
  • Economic development and jobs in rural communities in developed and developing countries
  • Substantial increases in prices for agricultural commodities
  • Higher land value and tax income
  • Less need for direct crop subsidies

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biofuel pitfalls
Biofuel Pitfalls
  • Energy inefficient biofuels that require more energy inputs than energy output; reduces capacity for replacement of fossil fuels
  • Excessive inflation in consumer food prices due to insufficient grain and oilseed crops for food, feed, fiber, and biofuel
  • Environmental degradation and unsustainable farming practices due to expansion of biofuel crop area and motivation to produce highest possible yields
    • Net increases in greenhouse gas emissions rather than a decrease
    • Expansion of cropping to marginal land resulting in a significant increase in erosion and habitat degradation
    • Expansion of cropping into rain forests, wetlands, grassland savannahs in Brazil, Indonesia, and other tropical countries
    • Reduction in water quality from increased fertilizer rates without development of new technologies to avoid nutrient losses in high-yield systems

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energy efficiency and environmental impact of biofuels maize ethanol ex
Energy Efficiency and Environmental Impact of Biofuels—Maize Ethanol ex.
  • There are many life-cycle analysis (LCA) studies of maize-ethanol systems
    • Includes crop production, ethanol conversion, co-product processing and utilization
  • Results vary depending on selection of system boundaries, energy content of crop inputs, crop yields and input levels, energy use in ethanol plant

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slide15

Energy efficiency and greenhouse gas mitigation estimates from different studies

From Farrell et al.,Science 2006

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backward looking vs forward looking life cycle analyses
Backward-looking vs forward-looking life-cycle analyses
  • Previous studies use aggregate data from the recent past
  • But efficiencies of maize production and ethanol conversion are continually improving
  • More relevant question: what is the energy efficiency and greenhouse gas mitigation potential of current and future maize-ethanol systems?

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biofuel energy systems simulator bess
Biofuel Energy Systems Simulator (BESS)
  • Recently released life-cycle assessment software available at: www.bess.unl.edu
  • Uses updated input values for maize yields and production practices, energy requirements for ethanol fermentation-distillation, and co-product processing and utilization
  • Estimates much higher net energy efficiency and greenhouse gas mitigation potential than previous estimates

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slide18

BESS* Model for Emissions Trading and Biofuel C-cost certification

BESS Life-Cycle Model includes 4 components:

  • Crop production
  • Ethanol biorefinery
  • Cattle feedlot for feeding distiller’s grains
  • Anaerobic digestion unit (optional, closed-loop facility)

Three types of life-cycle analysis:

  • Energy analysis—life-cycle net energy yield/efficiency
  • Emissions analysis—net carbon dioxide (CO2) and trace greenhouse gases (CH4, N2O), and global warming potentional (GWP)
  • Resource Requirements—crop production area, grain, water, fossil fuels (petroleum, nat. gas, and coal)

*Available at www.bess.unl.edu

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slide19

Tradable GHG credit (E) = A - B - C - D

C = energy savings from use of distillers grains co-product to replace corn grain and urea in cattle diets

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slide25

BESS life-cycle analysis:

Net Energy Ratio

-----Corn Production System-----

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Based on a 378 ML/yr maize-ethanol plant

slide26

BESS LCA Analysis: GHG Emissions Reduction (%, Mt CO2eq*)

-----Corn Production System-----

8th CGIAR SC meeting

Based on a 378 ML/yr maize-ethanol plant

slide27

Energy efficiency and greenhouse gas mitigation estimates from different studies

Liska et al. Univ of Nebraska: Improved maize grain ethanol technology

From Farrell et al.,Science 2006

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slide28

Closed-Loop Integrated Corn-Ethanol Biorefinery:

high energy efficiency and positive environmental impact

CH4

CO2

N2O

Corn Production

--Grain and stover yields in relation to climate and management

--All inputs and outputs have energy and GHG equivalents

--Soil C sequestration, soil quality, water quality

CO2

Ethanol Plant

--Ethanol output per in relation to grain and energy inputs, and total ethanol yield

--Greenhouse emissions

--Distillers grains and other by-products

Grain

Ethanol

Grain

NO3 leaching

Distillers grain

Stillage

N2O

CH4

CH4

CO2

Cattle Feedlot

--Feed, energy and other inputs

--Animal weight gain and feed efficiency

--Manure and urine outputs

--Greenhouse gas emissions

Methane Biodigestor

--Manure, urine, stillage inputs

--Methane biogas output

--Biofertilizer output, fertilizer replacement value, land requirement

Meat

manure, urine

NO3 leaching

Biofertilizer

Horticultural uses/organic ag?

Fertilizer offset in crop production

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slide29

BESS LCA Analysis: GHG Emissions Reduction (%, Mt CO2eq*)

-----Corn Production System-----

8th CGIAR SC meeting

Based on a 378 ML/yr maize-ethanol plant

bottom line energy efficiency and ghg mitigation
Bottom line: Energy Efficiency and GHG Mitigation
  • Current state-of-the-art USA maize ethanol systems
    • 30-70% net energy surplus and 25-70% GHG reduction compared to gasoline
  • Sugarcane-ethanol even better
    • Improvements in maize-ethanol will approach sugarcane efficiencies and GHG mitigation
  • Palm oil biodiesel is also highly energy efficient, but GHG mitigation depends on whether forest clearing is accounted for
  • Soybean will become the dominant vegetable oil crop because it is too low-yielding to be competitive as a biofuel feedstock

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slide31

Potential Ripple Effect: accelerated deforestation due to abrupt increase in demand for food, feed, and biofuel crops

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slide32

Ripple effect of rising food prices or shortages: rural poor in developing countries will be motivated to expand subsistence crop production onto marginal soils not suited for annual food crops causing soil degradation and loss of environmental services.

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slide33

Cereal Imports to Sub-Sahara Africa

Wheat

Percent of global exports

Rice

Maize

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avoiding excessive food price inflation and ensuring environmental protection
Avoiding excessive food price inflation and ensuring environmental protection
  • Assure adequate grain and oilseed supply to meet global demand for food, feed, fiber, and biofuel
  • Maintain soil quality
  • Improving water quality
  • Avoid a large expansion of crop area into marginal land or into natural ecosystems (forests, wetlands, grassland savannahs)

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slide39

Rate of gain for all cereals is linear, not exponential, which means that the relative rate of gain is decreasing: relative rates of gain in 1966.

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slide40

Rate of gain for all cereals is linear, not exponential, which means that the relative rate of gain is decreasing: relative rates of gain in 2004.

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a critical question will there be enough maize
A Critical Question:Will there be enough maize?
  • USDA Secretary Mike Johanns (11/16/06):
    • US farmers should be able to meet booming corn demand
    • We have companies telling us they are very close in their research to having more drought-resistant, more pest-resistant, more disease-resistant corn hybrids
    • 4 to 7 million idled CRP acres are viable for corn production
  • Robert Fraley, Chief Technology Office, Monsanto: National Renewable Energy Conf, St Louis, 10/12/06
    • Average corn yields will double within the next 30 years (2.3% per year exponential growth rate versus actual current linear rate equal to 1.2% of current trend-line yield)
    • New biotech hybrids will achieve substantial yield increases under drought and require less N fertilizer
  • Little published in refereed journals to support these claims; most crop physiologists/agronomists who work on corn yield potential disagree with this prognosis

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slide42

USA Corn Yield Trends, 1966-20051

(embodies tremendous technological innovation)

12000

Transgenic (Bt) insect resistance

Soil testing, balanced NPK fertilization, conservation tillage

10000

8000

Double-X to single-X hybrids

Reduced N fertilizer & irrigation?

GRAIN YIELD (kg ha-1)

6000

y = 112.4 kg/ha-yr

4000

Integrated pest management

[1.79 bu/ac-yr]

Expansion of irrigated area, increased N fertilizer rates

2

R

= 0.80

2000

1965

1970

1975

1980

1985

1990

1995

2000

2005

YEAR

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From: Convergence of Energy and Agriculture, www.cast-science.org

slide43

Nebraska contest-winning and average yield trends

No increase in yield potential ceiling since the 1980s; average yields will soon approach this ceiling.

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From: Cassman et al., 2003

slide44
WILL THERE BE ENOUGH RICE, WHEAT, AND OTHER STAPLE FOOD CROPS FOR THE RURAL AND URBAN POOR?

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slide45

Yield trend of IRRI cultivars and lines developed since 1966

11

Yield of IR8 in 1966

IR65469-161-2-2-3-2-2

10

IR72

IR50

IR59682-132-1-1-2

9

IR36

IR64

Grain yield (t ha-1)

Based on field studies at two locations in 1997 and 1998; mean values

IR60

IR30

IR20

8

BPI76

IR26

IR8

y = -139 + 0.075x

7

2

r

= 0.73

6

1960

1965

1970

1975

1980

1985

1990

1995

2000

Year of release

Peng et al. 2000; Crop Sci 40:307

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slide46

10

(1998 dry season)

9

IR72

(De Datta et al. 1968)

IR8

8

7

Grain yield (t ha-1)

IR8

6

(1998 dry season)

5

4

3

0

50

100

150

200

-1

N rate (kg ha-1)

)

Grain yield of IR8 grown in the late 60s and 1998

Peng et al. 1999; Crop Sci 39:1552

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slide47

Conceptual framework for stagnant yield potential and red-queen breeding to maintain disease/insect resistance and adaptation to evolving agro-ecosystems (soils, [CO2], climate change)

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From: Cassman et al., 2003, ARER

slide48

Rice yields are stagnating in many of the world’s most productive intensive rice systems: China, Korea, Japan, Indonesia, and Punjab-India

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slide49

Yield trends of wheat in the Yaqui Valley of Mexico and in the major wheat producing states in India.

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slide50

Global Irrigated Area and as a % of Total Cultivated Land Area 1966-2004: little scope for further increase

In 2002, irrigated systems occupied 18% of cultivated land area but produced 40% of human food supply

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need for ecological intensification
Need for Ecological Intensification
  • Little uncultivated land suitable for expansion of intensive cereal production
  • Global rate of increase in cereal yields is falling below rate of increase in demand
  • In general, current crop and soil management practices have:
    • negative impact on water quality, greenhouse gas emissions, and biodiversity
    • In some systems, they are also causing a reduction in soil quality (loss of organic matter, nutrient depletion, salinization, acidification)

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what is ecological intensification
What is Ecological Intensification?
  • Development of high-yield crop production systems that protect soil and environmental quality and conserve natural resources
  • Characteristics of EI systems:
    • Yields that reach 85-90% of genetic yield potential
    • 70-80% N fertilizer uptake efficiency
    • Improve soil quality (nutrient stocks, SOM)
    • Integrated pest management (IPM)
    • Contribute to net reduction in greenhouse gases
    • Have a large net positive energy balance
    • In irrigated systems: 90-95% water use efficiency

8th CGIAR SC meeting

the promise of cellulosic ethanol
The Promise of Cellulosic Ethanol
  • Mostly avoids direct food vs fuel competition
    • Indirect competition for land
  • Large amount of cellulosic biomass feedstock could support substantial expansion of ethanol production capacity
  • May have greater positive environmental impact than corn grain ethanol: larger reduction in GHG emissions, better protects soil quality, reduced fertilizer inputs
    • Some concern about impact on biodiversity

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challenges to successful development of the cellulosic ethanol industry
Challenges to successful development of the cellulosic ethanol industry
  • Harvest, handling, storage of huge amounts of biomass
  • More cost-effective pretreatment and enzyme technologies
    • Can they utilize multiple feedstock sources?
  • Improved options for use of co-products
    • Feedstock for industrial chemicals?
  • Large-scale deployment is 7-10 years off
    • Meantime, biofuel production capacity builds out until the breakeven price of maize, sugarcane, and oil palm is reached for biofuels (within 5-7 years?)

8th CGIAR SC meeting

challenges for global food security poverty reduction and the cgiar in a biofuel world
Challenges for Global Food Security, Poverty Reduction, and the CGIAR in a Biofuel World
  • Accelerating crop yields to avoid excessive rise in food cost and the need for a large expansion of crop area into marginal soils and native ecosystems
  • Achieving yields near the yield potential ceiling without negative impacts on environmental quality and GHG emissions through an ecological intensification approach
  • Raising the yield potential of the major food crops and continuing to improve stress tolerance—but only slow, incremental increases likely despite the optimism of executives from major seed companies
  • The magnitude of this scientific challenge is grossly underestimated. The CGIAR must play a proactive role in meeting it!

8th CGIAR SC meeting