Harvesting agricultural residues that are normally left to rot in fields and turning them into next-generation biofuels could generate up to €31bn for the EU economy per year by 2020, according to a new study released by Bloomberg New Energy Finance last week (14 September).
Moreover, it could revitalise the ailing farming sector by generating up to a million man-years of employment across the 27 member states over the next decade, most of them in rural areas, it said.
The report, supported by Danish biotechnology giant Novozymes, estimates that the 27 EU member states will have somewhere between 250 and 300 million tonnes of agricultural residues available annually by 2020 to convert into bio-products if current land use patterns are retained.
The greatest biomass supply potential lies in Europe's agricultural powerhouses France and Germany, the report states. Central and Eastern European member states as a group contribute about a quarter of the total potential, it adds.
Wheat straw, sugar beet residues and barley straw will be the top agricultural contributors to the EU's biomass potential up to 2020, it states. Agriculture would supply 80% of these biomass residues, complemented by forestry and municipal solid waste.
If a sustainable proportion of the residues were collected instead of being left to rot in fields, they could be processed into 75bn-90bn litres of next-generation ethanol, Bloomberg estimated. It assumed that only 25% of the biomass would be physically recovered, with the remainder left to return nutrients to the soil.
However, there is currently no financial incentive in the EU for farmers to harvest residues to be transported to a biorefinery, which would in future have the capacity to process them into next generation bioethanol or biochemicals, the report states.
By contrast, the US government put in place in 2009 a scheme that offers farmers financial incentives to collect agricultural residues. The Biomass Crop Assistance Programme (BCAP) offers matching payments of up to $45 per dry tonne of harvested biomass.
"A similarly clear and supportive policy would greatly assist EU-27 biomass producers and help unlock some of this resource," the report says.
It concludes that the EU must develop a next-generation biofuels mandate on top of its current obligation to produce 10% of transport fuels from renewable sources by 2020.
The idea is that a next-generation biofuels mandate will first provide a market for agricultural residues. Once farmers start supplying them in large quantities, investment in biomass supply chain infrastructure will follow.
The agricultural sector has an interest in developing commodities and services to contribute to the rural economy and development, said Pekka Pesonen, secretary-general of Copa-Cogeca, which represents European farmers.
"Biofuels are a very good example," he said. Pesonen pointed out that after initial enthusiasm, biofuels became a hot potato because they were linked to food production as a competitor for land.
"All of a sudden everybody said that farmers cannot go into that because it would endanger the supply of food," Pesonen said, countering the claim.
"We have by-products that could easily be used for biofuels, but politically it has not been that clear yet that we should encourage these," he said. "For farmers it would make sense, as it all boils down to using resources efficiently and increasing productivity," he added.
"This seems to have been forgotten in the EU a long time ago," Pesonen argued.
The study offers a rare positive view on bioenergy after numerous recent studies have painted a bleak picture of biofuel sustainability.
The row over potential indirect effects of increased biofuel consumption continues to rage, as the European Commission is preparing a report assessing the risks of energy crops. These include "indirect land-use change" in distant countries - a result of food production displacement - and virgin forests being hacked down in search of more agricultural land.
Next-generation biofuels, however, are touted as the 100% sustainable alternative, but only when using by-products that would otherwise have been left to rot in the fields. Experts, however, say the 10% transport fuel target will be met mainly by first-generation biofuels made from food crops, as next-generation biofuels and electric cars will only become widely available after 2020.
Earlier this year, Novozymes unveiled a new enzyme, which it said would reduce the price of bioethanol production to put it on par with petrol. The US would be the first to take advantage of the new technology with its more advanced political framework, Lars Hansen, president of Novozymes Europe, told EurActiv.
A mandate for next-generation biofuels would drive investment in the EU's agricultural sector, which is struggling to attract capital to invest in machinery, the report stated. It added that it would be an incentive to increase crop productivity, particularly in Eastern member states, which lag behind more efficient France and Germany.