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Can organic crops increase the economic potential for biorefineries?

With the current cost and price relations, the profitability of biorefineries is still challenged. The use of organic crops, such as grass, in biorefineries can increase the profitability because organic products can be sold at higher prices.

2017.02.21 | Morten Gylling & Andreas Battrup Jakobsen, Dept. of Food Resource Economics, KU

The biorefining process in the organic and the conventional biorefinery is in general the same, but to meet the criteria for organic production the treatment of organic biomass must be separated from the treatment of conventional biomass. This can be done by having separate plants or by running in campaigns. Therefore, the differences in the economic potential of organic versus  conventional biorefineries are mainly related to what goes on in the value chain before and after the biorefinery.

Before the biorefinery the difference is primarily related to the yield, where conventional production is generally able to give a higher yield than organic production at about the same cost.

This means that the production cost of the input for the organic biorefinery  is higher. On the other hand, the value of organic crops tends to be higher; for instance the price pr. kg output is about 27 % higher for organic grass. Variation in the yield level is higher for conventional production than for organic production. Compared to size of production however, the variation of output is relatively equal.

After biorefining the difference in the price of the products is substantial. Prices on organic produce are in general higher than on similar conventional products.  Biorefining mainly produces three outputs: protein paste, fibres and a fluid. The organic protein paste can be used in the feed for organic animal production which is sold at higher prices than conventional animal feed. An example is the price on organic pig feed with a price about 3,20 DKK per kg compared to 1,60 DKK per kg conventional. The fibres and the fluid can be used in biogas production, and the remains from the biogas production can be used as organic fertilizer, again with a significantly higher economic value.

When comparing the “before the biorefinery” costs for biomass, the input transportation cost is a serious cost item. As the transport cost for organic and conventional grass are somewhat the same, the transportation costs will not make any difference between organic or conventional; it is a matter of localisation and planning.

Why use clover grass for biorefining?

Grass is not necessarily the only relevant green biomass. Lupines and faba beans are already used as protein sources for monogastrics. The choice to produce protein from clover grass by biorefining or growing dedicated protein crops must be based on quality, quantity and price. The figure below shows the yield for different crops measured in dry matter in the period 2013 – 2014.

 

Grass production is likely to give the largest amount of dry matter biomass. At the same time the protein content of dry matter organic clover grass is up to 40 %, but only around 29 % on average for organic faba beans. Yield and protein content are not the only relevant attributes, but it seems that grass is the most promising green biomass for biorefineries.

The question then arises: Is organic grass production in Denmark sufficient?  Currently around 95 000 hectares are used for production of organic greens and 260 000 hectares for conventional grass most of which is used for fodder. Since one of the primary outputs of biorefining is protein fodder, it’s likely that the current production area can supply biorefineries without necessarily limiting the fodder basis for animal production and, moreover, reduce the import of soy protein.

Green organic biorefineries will through a further technology development increase the possibilities of substituting organic soy, increase the production  of organic fertiliser from biogas digestate and give the organic arable farmers the possibility of growing an additional cash crop.

The project OrganoFinery is part of the Organic RDD 2 program, coordinated by ICROFS (International Centre for Research in Organic Food Systems). It has received grants from the Green Development and Demonstration Programme (GUDP) under the Environment and Food Ministry.

Visit the project website of OrganoFinery

Agriculture and food
Tags: OrganoFinery, Organic RDD 2, GUDP