## French President Calls for Non-Food Agriculture for Bio-based Fuels and Chemicals, Pilots on Second-Generation Biofuels

##### 08 October 2006

In a speech to an agricultural conference in France last week, French President Jacques Chirac asserted the important role of non-food agriculture for France and Europe, and called for the immediate launching of two pilot projects to develop second-generation biofuels.

Second-generation biofuels include cellulosic ethanol and biomass-to-liquids (BTL) Fischer-Tropsch synthetics. “It [second-generation biofuel technology] is technically very promising. And it will make it possible to use French [agricultural] production fully,” said Chirac.

Crops should be used to produce vegetable-based fuels and chemicals, said Chirac, noting that he has set a targeted biofuel component in French fuels of 10% by 2010. Chirac also said that the European Common Agricultural Policy (CAP) needs to reflect the production of energy and chemical crops, but also rejected any overhaul of the CAP before 2013.

France will carry this ambition, this vision of the agriculture of tomorrow, into the heart of the European structure. Europe does not have the right to take the wrong way. Europe must advance with two priorities: high technology and agriculture.

The new common agricultural policy must maintain community preference and the government aid for the social and environmental aspects of the agriculture, which cannot be solely remunerated by prices. But above all, the CAP will have to be extended to the new dimension of non-food uses of agricultural products by clearly providing privilege to European products.

Plantings of some crops for first-generation biofuels are already increasing in France. A report from the USDA Foreign Agricultural Service (FAS) in March 2006 projected that following a record crop in 2005 of 4.5 million MT from 1.2 million ha, French rapeseed production will this year again be very high in response to increased biodiesel demands.

The sad thing is that he also called for biofuel subsidies. Hopefully, the EU doesn't close its market for biofuels from places where it actually makes sense to produce them.

Lorenzo: Didn't you get the point? He asserted the important role of NON Food Agriculture in France. That means, that in the medium term, the direct subsidies will decrease. But only, if farmers get more money from direct product sales. Wait and see. And he is right so. We farmers have seen within the last 25 years ever decreasing prices for our products. Inflation adjusted, wheat is trading at around of 5% of the peak price in 1972. That's right: we have seen a price slump of 95%!!!

This should be good stuff. There is a lot of "set-aside" land in europe to prevent the farmers producing too much food. This land should be used for biofuels production.
The key is to manage the subsidies and legal framework properly. It has to be aimed at energy security rather than farming subsidies. The problem is that the biofuels space is very dynamic with new fuels and techniques being developed all the time. (Unlike food agriculture (as it seems to me)). Thus, subsidies need to be set up in such a way as to enable farmers to plan to grow biofuel crops, but not lock them into a particular crop or technology.

What we need are biofuels that can be grown on questionable land without too much fossil input to grow and harvest.
We should use all the set aside land that is feasable for energy crops of one form or another.

We do not want an insane white elephant like the common agricultural policy (CAP) which spends 44% of the EC budget subsidising farmers.

Mahonj -

"But above all, the CAP will have to be extended to the new dimension of non-food uses of agricultural products by clearly providing privilege to European products."

The French will gladly surrender anything but their precious farm subsidies, regardless of what they are for. As long as the UK gets its rebate, the CAP is not going away. Turkeys don't vote for Christmas. Besides, who did you think finances political parties in the Grande Nation, especially those on the right?

What do you want? Subsidy free fuel? Then don't buy gasoline. The war in Iraq is a great big subsidy for oil. What is it now, a billion dollars a week?

While Chirac currently speaks against revising the CAP on an earlier timetable, I think his position on fuel crops shows that he has realized that they are a very promising outlet for surplus European agricultural capacity. The US/EU overcapacity issues and agricultural subsidy regimes are probably the biggest problem on the world-trade table today -- they were responsible for sinking the recent WTO talks, and have been the cause of immense dislocation in developing-country economies. Firming up prices through growth in demand -- increasing the use of biofuels -- both stabilizes farm incomes while reducing resort to direct subsidy, and takes excess grain off the world market, where it currently serves to depress and destabilize prices.

This can be accomplished either by diverting existing primary crops from the food supply to the fuel supply (ethanol from sugarcane and corn; biodiesel from soy, rapeseed and palm oils), or by diverting farmland currently used for food crops into the production of dedicated fuel crops. Increasing biofuel production by bringing out-of-cultivation or marginal lands into cultivation would have a positive effect on our fuel supply but a neutral effect on our food supply, and as such are not the best way to go. Strange as it may sound, the world would probably be better off if, over the medium-term time frame (10-15 years), the first world found a way to somewhat reduce its average food production and export. Biofuel production schemes can be rigged to accomplish this result -- to an extent they already have, with ethanol production soaking up a large amount of U.S. corn production -- and I would not be surprised to see Europe try it.

The reason why developing nations have been clamoring for reduced first-world subsidized food exports is that many of them have depressed agricultural sectors which could be earning a lot more money (and investing a lot more in improving production) if commodity prices were somewhat higher. At the same time, non-agricultural sector food consumers would generally be able to afford the moderate increase in commodity prices, because even in the third world, only a fraction of the cost of a finished food product comes from the cost of the raw wheat or corn. The price for bread would increase only a little, while rural incomes would increase a lot. And in such countries, the rural sector is very large.

Small land parcels with small farm machinery, high price of labor, climate not favoring any current energy crop (vastly superior GM corn is prohibited in Europe) – reliance on first generation food-to-fuel technology would be disastrous for France. Looks like President Chirac understand it very well (unlike some posters on this tread), hence his emphasis on second generation biofuels using agricultural waste as primary feed stock.

Andrey -

don't get me wrong, I'm all for second-generation biofuels such as cellulosic butanol, BTL and DME. These are more expensive to produce than mineral fuels, so clearly their advantages relative to energy security and global warming have to be monetized at a level that encourages private investment in the infrastructure.

What I object to is Mr. Chirac's arrogant presumption that the rest of Europe should continue subsidizing French farmers not just through 2013 but beyond that. Each EU country should fund its transition toward renewable fuels on its own nickel, e.g. by taxing biofuels less and mineral fuels more heavily than is the case right now. Conversely, the demise of the CAP should also mean the end of the UK rebate.

HI,
If anyone is still listening, could they define what are
1st, 2nd and 3rd generation biofuels ?

Mahonj -

by convention:

1st gen biofuels: methanol/DME from wood, ethanol from sugar/starch crops, SVO/biodiesel from oil crops. Only a fraction of the total biomass is turned into fuel, the rest into fodder, compost etc. Suitable feedstocks tend to compete with food crops for land. Technology for large-scale industrial application available today, though not neccessarily economical.

2nd gen biofuels: cellulosic ethanol/butanol, biodiesel from algal oil, BTL. There is virtually no biomass residue, fuel yield per ton of feedtock is much higher. Fuel properties are superior in some cases. Suitable feedstocks are agricultural/forestry waste and/or dedicated energy crops that do not compete with food crops for land. Technology for large-scale industrial application not yet proven or even available.

3rd gen biofuels: any biology-based hydrocarbon or hydrogen fuel production process not covered above (e.g. artificial photosynthsis)

Csurrent overproduction and very low free market price for food are the main drivers for the huge subsidies given to farmer in USA-Canada and Europe.

Diverting a certain percentage of useful land to produce food and non-food feedstocks for biofuels may reduce the current food surpluses and force prices up enough for farmers to survive without subsidies.

Crop insurances should be maintained to protect the farmers against bad crops and/or extremely low prices.

A few billion dollars to our farmers is much better than billions for imported oil and oil wars.

French farmer builds polytunnel algae ponds...

Yield, 3,000 gallons of oil per acre per year...

Free market price, $1 per gallon, farmer with 100 acres of ponds makes sales of$300,000 per year.

Result, no need for any subsidy whatsoever. Win win for taxpayer, farmer, environment, economy (everyone in fact except Shell, BP, etc).

Clett -

http://www.unh.edu/p2/biodiesel/article_alge.html

suggests theroretical yields of 15,000 gallons/acre-year in New Mexico, based on the NREL study.

http://www1.eere.energy.gov/biomass/pdfs/biodiesel_from_algae.pdf

That study assumed a source of exhaust gas containing a high concentration of CO2, e.g. from a coal fired power station, to be percolated though open racetrack ponds. Even so, actual yields were less than 5000 gallons/acre-year, mostly due to low water temperatures in the morning hours (the pools were not heated). In France - which receives considerably less sunshine - yields would be lower. Your 3000 gallon/acre-year (28000 liters per hectare-year) figure may or may not be feasible.

The average size of a French farm in 2000 was 50 hectares (124 acres), so your assumption of 100 hectares (40 hectares) net available for algae production also sounds about right.

http://www.nationsencyclopedia.com/Europe/France-AGRICULTURE.html

For us metric folks, that translates to 28000 liters of biodiesel per usable hectare and year. Wholesale prices are around EUR 0.70/liter but an algal oil farmer would only see one-third of that. That would suggest raw revenue of EUR 260,000 per year for an average-sized farm, close to the \$300k you had suggested. From that, you need to subtract the (substantial) depreciation plus operations overheads for the ponds and CO2 duct infrastructure - assuming the CO2-rich exhaust gas as such is made available for free. Subtract general business overheads and taxes and what the farmer is left with might be as much EUR 40000-60000 a year, without subsidies.

Btw, France produces most of its electrictity from nuclear power. Other countries (e.g. Germany) would be better candidates for this.

DME developments in CHina today!!
DME is an LPG-like synthetic fuel can be produced through gasification of Biomass. The synthetic gas is then catalyzed to produce DME. A gas under normal pressure and temperature, DME can be compressed into a liquid and used as an alternative to diesel. Its low emissions make it relatively environmentally friendly. In fact, Shandong University completed Pilot plant in Jinan and will be sharing their experience at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:

DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
By:
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
By:
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation

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