NNFCC - from crops to cashflow: building sustainable supply chains

The National Non-Food Crops CentreThe National Non-Food Crops Centre

The Biofuels Supply ChainThe Biofuels Supply Chain

Agri-Vision for Bioenergy

National Renewable Energy Conference

March 2007

NNFCC - from crops to cashflow: building sustainable supply chains

RemitRemit NNFCC is the single, independent source of information on

the use and implementation of non-food crops, products and technologies

Aiming to:

• Develop credible supply chain models for all crop-derived

materials, processes and by-products used in non-food

applications

• Advise industry, Government and academia on mechanisms to

reduce supply chain constraints in emerging market areas

• Encourage the development of new UK business sectors

• Develop specific communication packages and tailored events

for the media, schools and the general public

NNFCC

Remit

Funding

Staff

NNFCC - from crops to cashflow: building sustainable supply chains

FundingFunding

Government funding:• Defra £300k pa core funding• DTI £192k pa technology translation

- Bioscience for Business KTN

Industrial sponsorship / subscription• £50k per annum

– £7,000 pa sponsors – £500 pa company subscription– £50 pa individual subscription

Project management / consultancy

Events

NNFCC

Remit

Funding

Staff

NNFCC - from crops to cashflow: building sustainable supply chains

StaffStaff

Jan ’04 – 7 staff (including office support)

Jan ’07 – 13 staff at offices in York (+ 2 secondees)

CEO

Technology Translation Managers • Fine & Speciality Chemicals • Fuels & Bulk chemicals• Materials

Policy & Government Liaison Manager

Agricultural and Events Manager & Events Co-ordinator

Communications & Information Team

Regional Officer

Office Support Staff

NNFCC

Remit

Funding

Staff

NNFCC - from crops to cashflow: building sustainable supply chains

Food industry by-products = 30MT

Municipal Waste streams = 25MT

- Garden waste = 5MT

- Paper and board = 4.5MT

- Compostable kitchen waste = 4.5MT

Timber & wood waste = 2.8MT

UK ResourcesUK Resources

Feedstock potential

UK Situation

Legislation

Key product groups

Conclusion

Total UK Agricultural Land = 18.5 million ha

Set-aside = 0.9Mha

Arable = 6Mha

NFC = 0.15Mha

Land available for NFC production = 1.5 – 2Mha

Woodland =2.8Mha (10 MT timber)

Agricultural waste = 80 MT

NNFCC - from crops to cashflow: building sustainable supply chains

Renewable FeedstocksFeedstocksRenewable FeedstocksFeedstocks

FUELENERGY

OILSTARCH

FIBRE

SPECIALITY

OSR

Linseed

Crambe

Camelina

Calendula

Borage

Echium

Poppy

Chamomile

Peppermint

Wheat

Sugar Beet

Potatoes

Maize

Barley

Cereal Straw

Miscanthus

Short Rotation Coppice

Hemp

Flax

Nettle

Feedstock potential

UK Situation

Legislation

Key product groups

Conclusion

NNFCC - from crops to cashflow: building sustainable supply chains

NNFCC key product groupsNNFCC key product groupsNNFCC key product groupsNNFCC key product groups

Biolubricants • Nine companies already engaged• Potential for commercialisation in number of end uses

Biopolymers• New technology development adding value to a commodity feedstock• Need to address cross cutting issues such as labelling, segregation,

and waste disposal

Construction• Large market to develop crop derived products

Phyto – pharmaceuticals• World class science base • Traceability – critical for crop used in pharmaceutical applications

Biorefineries / biofuels• Utilisation of whole crop – analogous to the oil refinery

Remit

Services

Key product groups

NNFCC - from crops to cashflow: building sustainable supply chains

Current UK bioenergy activity

Source: REA, 2007

Activity in Ireland to be mapped during 2007 –

help!

(REA)

NNFCC - from crops to cashflow: building sustainable supply chains

Biodiesel

Greenergy

BIP Olbury site, Midlands 12,000 t/year

Immingham 100,000

Liverpool 100,000

Argent Energy (O) Motherwell 44,000

D1 Oils (O) Preston 8000 (UK)

Biofuels Corporation (O) Seal Sands, Middlesbrough250,000

(+ 2 x 200,000 plants)

ESL Biofuels (O) Frodsham, Surrey 100,000

INEOS Enterprises (’08) Grangemouth 500,000

Bioethanol

Green Spirit Fuels (’08) Henstridge 100,000 Wheat

Humber Biofuels (P) Immingham 200,000 Wheat

Roquette (’08) Northants 95,000 Wheat

Bioethanol Ltd (’07) Humberside 100,000 Wheat

British Sugar (’08) Wissington 60,000 / 30,000 Sugar Beet

INEOS Enterprises (P) Grangemouth ? Wheat

Losonoco (P) Merseyside ? Waste wood

(O)

(’06)

(P)

Feedstock potential

UK Situation

Legislation

Key product groups

Conclusion

NNFCC - from crops to cashflow: building sustainable supply chains

The Biofuel Supply ChainThe Biofuel Supply Chain

• Understand

• Communicate

• Initiate

• Get involved

Aiming to:

• Minimise number of stages / players

• Maximise value at each stage

• Produce & sell quality end-product

Grower

Merchant

Processor

Crusher

Blender / Distributor

Consumer

NNFCC - from crops to cashflow: building sustainable supply chains

What are the options?

Grower

Merchant

Processor

Crusher

Blender / Distributor

Consumer

OR

Grower

Merchant

Processor

Crusher

Blender / Distributor

Consumer

V’s

Commercial-scale production

• Contract growing

Farm-scale production

• Single-farmer

• Co-operative production

NNFCC - from crops to cashflow: building sustainable supply chains

Commercial-scale production

e.g. Greenergy: Field-to-Forecourt• Oilseed rape for Biodiesel production

• Secure contract at fixed price

• Eligible for Energy Aid Payment OR can be grown

on set-aside land

• Feedstock requirements – 250,000 tonnes for 2007

• Why?– Low risk

– No capital outlay

– No change to current production systems

– Premiums available for oil content / quality

Grower

Merchant

Processor

Crusher

Blender / Distributor

Consumer

NNFCC - from crops to cashflow: building sustainable supply chains

Farm-scale production

Co-Operative Large farm Small farm

Area (ha) 1,000 ha 100 ha 40 ha

Rapeseed (tonnes) 3,200 324 139

Rape meal (tonnes) 2,183 229 98

Vegetable oil (tonnes) 906 95 41

Vegetable oil (litres) 1,029,230 107,989 46,329

Biodiesel (litres) 967,470 101,509 43,549

Advantages

Spread risk Share costs Increase input & output volumes

Small-scale for own-use Reduce energy costs on-farm Use existing labour No transport costs

Disadvantages May require additional labour

Increased risk Limited feedstock availability

Grower

Consumer

NNFCC - from crops to cashflow: building sustainable supply chains

What are the Issues?

Feedstock Prices – e.g. variable prices make decisions difficult (e.g. Wheat at £60 - £100 per tonne – drought or market issue ??)

Security of Supply – once started, production must be constant• build relationships with feedstock suppliers & grow confidence

• An attractive package must be on offer

• Large volumes required with immediate effect

Competition • LCVP sustainability criteria due 2008

Government Incentives • Ireland – MOTR Scheme

Communication

Fossil Oil Prices

Co-product markets and prices ?

Grower

Merchant

Processor

Crusher

Blender / Distributor

Consumer

NNFCC - from crops to cashflow: building sustainable supply chains

2nd Generation Biofuels2nd Generation Biofuels

Energy Maize

15 -18 dt/ha

30 dt/ha

Source: KWS

How can farmers get involved?

How can farmers get involved?

NNFCC - from crops to cashflow: building sustainable supply chains

ConclusionConclusion

The UK is behind the US, Germany, Spain – but activity is

increasing

Collaborate & communicate to achieve best results – work with

& learn from others

Focus on local production – utilise local skills & expertise

Look to utilise whole crop – establish markets for co-products

Work to maximise available resources

Add value where possible – look at branding & local marketing of

end-product

Huge potential for both agriculture & industry!

Grower

Merchant

Processor

Crusher

Blender / Distributor

Consumer

NNFCC - from crops to cashflow: building sustainable supply chains

www.specialchem4polymers.com

Thank YouThank You Thank YouThank You

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