Instead of offering financial incentives or subsidies to stimulate the use of biomass, governments should encourage technical innovation as a way of narrowing the price gap with oil and gas products, the report says. 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 states.
Financial incentives for bioproducts distort markets and should be avoided as they can lead to a long term dependency on subsidies, it claims. Agriculture as a whole is under pressure to reduce its dependence on subsidies, and the report is equally critical of subsidies for the use of fossil fuels.
Instead, 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, also finds that:
- the price 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 already making use of bioplastics;
- around seven per cent of heat generation and one per cent 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;
- 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.
International standards and codes of practice should be established for biomass products to ensure that greenhouse gas emissions are reduced and environmental benefits maximised, the report states. It adds that clear lines of communication should be established between suppliers, processors and potential users and that a better assessment of costs and benefits taking into account economic, environmental and social aspects is needed.
By David Hopkins