NNFCC Market Review Feedstocks issue thirteen april 2013
NNFCC Market Review, April 2013, Page 1 of 8FeedstocksHighlightsPage 2 Wood NewsPage 3 Crops NewsPage 5 Waste NewsPage 7 Research NewsPage 7 EventsPage 8 Feedstock PricesNNFCC Market ReviewIssue Thirteen, April 2013ach month we review the latestannouncements and news fromacross the global crops, wood andwastes industries that supply bio-basedmarkets. This service is exclusively for ourmembers.ForewordWelcome to the April 2013 issue of ourmarket review for biomass feedstocks. Thismonth the Joint Research Centre of theEuropean Commission conducted athorough review of the greenhouse gasemissions reduction potential of using woodto displace coal and natural gas.The study recognised the complexity of theissue and perhaps unsurprisinglyrecommended further research. But it diddraw out some interesting qualitativeconclusions. It revealed that out of the fiftyfour scenarios analysed, forty five (83 percent) demonstrated that the use ofbiomass reduced greenhouse gas emissionsrelative to coal and natural gas.It did go on to conclude that “theassumption of biogenic carbon neutrality isnot valid under policy relevant timehorizons (in particular for dedicated harvestof stemwood for bioenergy only) if carbonstock changes in the forest are notaccounted for”, which lobby groups suchas the RSPB were quick to jump on.This conclusion does raise an importantissue about how best to communicate thebenefits of biomass and incentivise the useof biomass with higher greenhouse gassavings, but the report also clearlydemonstrates that there is still a vital role forbioenergy to play in Europe reaching itsrenewable energy targets and reducinggreenhouse gas emissions, not only in thelong-term but also in the short to medium-term too.Read on for all the latest sector news.E
NNFCC Market Review, April 2013, Page 2 of 8WoodBurning wood can reduce GHGemissions, says JRC report on carbonaccounting of forest bioenergyQualitative evaluation of the papersreviewed in JRC study, Source: JRCThe European Commission‟s Joint ResearchCentre of the European Commission haspublished its report on the carbonaccounting of forest bioenergy. The studyreviewed at a large number of peer reviewedpublications and reports in order tounderstand the consequences of increasedforest bioenergy production on greenhousegas emissions.The study found that most of the forestfeedstocks used for bioenergy, as of today,are industrial residues, waste wood, residualwood (thinnings, harvest residues, salvageloggings, landscape care wood etc.) forwhich, in the short to medium term, GHGsavings may be achieved. On the otherhand, the study found that in the case ofstemwood harvested for bioenergy purposesonly, if all the carbon pools and theirdevelopment with time are considered inboth the bioenergy and the reference fossilscenario, there is an actual increase in CO2emissions compared to fossil fuels in the short-term (few decades). In the longer term(centuries) also stemwood may reach thefossil fuel parity points and then generateGHG savings if the productivity of the forest isnot reduced because of bioenergyproduction.Concluding, the study said “from the studiesanalysed it emerges that in order to assess theclimate change mitigation potential of forestbioenergy pathways, the assumption ofbiogenic carbon neutrality is not valid underpolicy relevant time horizons (in particular fordedicated harvest of stemwood forbioenergy only) if carbon stock changes inthe forest are not accounted for”.Click here for more information.UN officials stress forestry as key toeconomic development andsustainabilityThe vital role of forests in global developmentand peoples lives as well as protecting theseresources for future generations are at theheart of discussions at the Forum on Forests,senior officials said on 8th April, as the UnitedNations body began its current session."The tenth session of the Forum is a timelyopportunity to re-emphasize the critical roleof forests in global development," Under-Secretary-General for Economic and SocialAffairs Wu Hongbo told a news conferenceon the opening day of the two-week meetingin Istanbul, Turkey."This is especially important given the ongoingdeliberations on defining a post-2015 UnitedNations development agenda withsustainable development at its core," headded.The current session of the UN Forum on Forests(UNFF10) will examine these issues, in additionto its main focus - forests and economicdevelopment. National level policies forforests have far-reaching implications forglobal sustainable development. The formalforestry sectors contribution to global grossdomestic product (GDP) is estimated to benearly $468 billion annually.
NNFCC Market Review, April 2013, Page 3 of 8But the value of forests cannot be measuredin GDP only. "Forests also provide criticalecosystem services," Mr. Wu stated, notingthat three-quarters of the freshwater used forhousehold, agriculture and industry isprovided by forested catchment areas.Forests also play a vital role in the fight againstclimate change, Turkeys Minister of Forestryand Water Affairs, Veysel Eroðlu, underscoredat the briefing: "They are very important in thefight against climate change becausecarbon dioxide gases are absorbed by forestsand forests are producing oxygen. Therefore,they are like the lungs of the world. We haveto protect our forests. We have to take careof them," he stated.Click here for more information.UK biomass investment decreased 21per cent in 2012Project & Asset Finance in UK Biomass Projects,Source: Clean Energy PipelineUK biomass project finance activity totalled$1.8 billion in 2012, a 21 per cent decrease onthe $2.3 billion invested in 2011. Some 17 UKbiomass power projects were financed in2012, slightly less than the 19 financed in 2011.Despite a year-on-year decrease, the UK wasstill the third largest country for biomassinvestment globally in 2012, behind onlyChina ($4.1 billion) and the USA ($2.1 billion).It is interesting to note that 96 per cent ofproject finance allocated to biomass projectsin 2012 was invested in the second half of theyear. Only $80 million debt and equity wasinvested in biomass projects in the first half ofthe year due to uncertainty over governmentsubsidies, most notably around the biomassco-firing Renewables Obligation Certificate(ROC) banding review and proposals of asupplier cap on dedicated biomass power.Click here for more information.CropsFeedstocks used to make bioplasticsrequire only a ‘small fraction’ of globalagricultural areaLand use for bioplastics 2011 and 2016,Source: European Bioplastics and IfBBThe surface required to grow sufficientfeedstock for today‟s bioplastic production isless than 0.006 per cent of the globalagricultural area of 5bn hectares. This is thekey finding published by European Bioplastics,based on figures from the United NationsFood and Agriculture Organization (FAO) andcalculations from the Institute for Bioplasticsand Biocomposites (IfBB) in Germany.According to European Bioplastics, increasingthe efficiency of feedstock and agriculturaltechnology will be key to assuring thebalance between land-use for innovativebioplastics and land for food and feed. Theemergence of reliable and independentsustainability assessment schemes will alsocontribute to this goal.Click here for more information.
NNFCC Market Review, April 2013, Page 4 of 8Palm oil stocks down, marketscautious ahead of latest USDA reportLatest data from the Malaysian Palm Oilboard shows Malaysian stocks in March weredown 11 per cent month-on-month at 2.17Mt.Malaysia is the second largest producer ofthe oil and prices have been depressed byhigh inventories. However, higher exports (+10per cent) at 1.54Mt, due to lower pricesrelative to other oils, has helped thedrawdown of stocks. Weak productiongrowth estimated at 1.33Mt, up 2.3 per centmonth-on-month also helped.Prices on the Malaysian Exchange wereexpected to rise on this news however on 10April they finished at MYR2,370/t (June-13),which was down 1 per cent from the previousdays close, due to a firmer Malaysian ringgit.The Malaysian currency reached a near-month high against the dollar following newsof the upcoming election.Click here for more information.USDA reports on world supply anddemand of arable cropsWheat2012/13 world production was left virtuallyunchanged at 655.43Mt, but carryover stocksfrom the previous season were increased by3Mt to 199.38Mt. Total global wheat demandwas cut by more than 1Mt to 672.55Mt withestimates of feed usage down by over 5Mt.The net impact of all of this is a rise in the endstock forecast to 182.26Mt from the 178.23Mtforecast last month. As a result, this new stockforecast equates to 99 days of supply againstthe 97 from last month‟s forecast.Maize2012/13 production was estimated almost 2Mthigher than last month‟s forecast at 855.92Mt,with a 1.5Mt increase in the Brazilian cropestimate to 74Mt. On the demand side, thiswas also bearish with a 5.24Mt cut in theforecast to 862.51Mt. This has resulted in anoticeable rise in ending stock estimates to125.29Mt from 117.48Mt last month; equatingto 53 days of supply against the 49 from lastmonth‟s forecast.SoyabeansWorld soyabean production was increasedby 1.6Mt to 269.6Mt, mainly due to increasesin Paraguay and Uruguay; Argentina andBrazil were left unchanged. Totalconsumption was reduced by 1.1Mt mainlydue to lower crushings in Argentina and Brazil.A reduction in imports by China (-2Mt)lowered levels of trade with exports from Brazil(-1.7Mt) and Argentina (-0.5Mt) reduced tocompensate in the main. Higher productionand lower consumption amount to largerglobal ending stocks which increase by 2.4Mt.Click here for more information.Cold weather concerns offer somesupport to European wheat pricesConcerns over the potential impact of a slowarriving spring across northern Europecontinue to offer support to UK and Frenchwheat futures prices. The current coldconditions are stimulating early concernsabout possible delays to spring planting.The latest EU Crop Monitoring (MARS) reporthighlights that as at mid-March winter cropsacross Europe generally showed goodpotential. Winter kill levels were reported tobe low following light frosts to date andgenerally good snow cover. The report alsosuggests that although the situation needsmonitoring, the impact of the current coldweather may be limited. This is becausecrops remain fully hardened in northernGermany and Eastern Europe where some ofthe coldest temperatures were expected.Click here for more information.
NNFCC Market Review, April 2013, Page 5 of 8UK wheat yields fall to lowest level inmore than a decadeData from the HGCA has shown that in 2012both UK wheat plantings and UK wheat yieldswere lower than in previous years. In terms ofplantings, data from various surveys suggestsa UK wheat area by 1 Dec 2012 of 1.484M ha,which is down 25 per cent on 1 Dec 2011.Beyond 1 Dec 2012, it is expected that somewheat planting occurred, but not in idealconditions. At this stage, UK wheat yields for2013 look uncertain – even more so thanusual given the current crop conditions.In this analysis, the 2012 yield is used as theworst case scenario (6.70t/ha). 2001 is a yearof interest because similarly to the currentcrop, wet autumn weather disrupted plantingand impacted crop condition. For the 2009harvest a wet autumn again disruptedplantings, but not to the extent seen for eitherthe 2001 or 2013 crops. In addition, the 2009growing season saw generally favourablespring and summer weather conditions tosupport what was a vulnerable crop throughto harvest.Despite concerns for the size of the UK wheatcrop in 2013, it must be remembered thatgrain markets operate in a globalenvironment. As a result, it must beappreciated that large scale price moves willbe dictated by production prospects in widerEurope, the Black Sea region and NorthAmerica.Click here for more information.WasteReport: Global waste industry coulddouble to $2 trillion by 2020The combination of urbanisation, loomingresource shortages and environmentalregulation means the global waste industry ispoised for a period of breakneck expansion,according to a major new report from Bankof America Merrill Lynch.The report, entitled “No time to waste - globalwaste primer”, calculates that the globalwaste, incorporating municipal and industrialwaste management, recycling, waste-to-energy, and sustainable packaging, iscurrently worth $1trillion a year.But it predicts that there is the potential forthe market to double in size to about $2 trillionin just seven years time, with a wide range ofdemographic, environmental, regulatory andcommercial factors driving investment rightacross the sector. The report said that therecovery of energy from waste is a marketthat is currently worth $7.4 billion but thiscould grow to $81 billion by 2022.Click here for more information.Austria tops EU recycling rate, UK &Ireland rapidly improvingA new report by the European EnvironmentAgency (EEA) has shown that in 2010 35 percent of municipal waste in Europe wasrecycled, which was a “significantimprovement” on the 23 per cent recycled in2001. Austria topped the table with amunicipal waste recycling rate of 63 per cent,while the UK and Ireland are among the mostrapidly improving.However, a number of other countries are ingrave danger of failing to meet EU targets torecycle 50 per cent of household and similarwaste by 2020, warned the EEA. The agencysaid that Europe is still wasting vast quantities
NNFCC Market Review, April 2013, Page 6 of 8of valuable resources by sending them tolandfill and even though five countries havealready achieved the target, most others willneed to make “extraordinary efforts” to do sobefore the deadline.The EEA gave the example of Bulgaria andRomania, which it said must increaserecycling rates by more than 4 per cent peryear during this decade to meet its targets –something which no country managed to dobetween 2001 and 2010.The agencys figures also showed that the UKincreased its municipal waste recycling from12 to 39 per cent between 2001 and 2010,while Ireland raised recycling rates from 11 to36 per cent over the same period. Slovenia,Poland and Hungary have also dramaticallyimproved recycling rates since joining the EU.Recycling rates were highest in Austria, with63 per cent, followed by Germany on 62 percent, Belgium on 58 per cent, the Netherlandsand Switzerland both on 51 per cent.Click here for more information.Banning more materials and foodfrom landfill could save UK billionsSavings per year from potential UK landfill ban,Source: Green AllianceExtending landfill bans to food, wood, textilesand plastics could save the UK over £3 billionin recovered resources and landfill costs, saysa new report.The UK stands to save £1 billion in landfill costs,if the Government extends the existing landfillbans on cars and mobiles to food, wood,textiles and plastics. But the recoveredresources would also bring £2.5 billion in valueto the economy, according to a report fromindependent think tank Green Alliance.The report shows the UK could gain £1.08billion from recovered plastics and nearly £6.5million and £7 million from textiles and foodrespectively. Over half a billion pounds couldalso be saved in landfill costs, if bans wereextended to food, and an additional £363million could be saved from a plastics ban.Click here for more information.Defra refutes Daily Mail ‘recyclingcon’ claimsSource: Daily MailThe Department for Environment, Food andRural Affairs has refuted claims by the DailyMail that millions of tonnes of householdwaste from the UK is being landfilled overseas,describing the allegations as „myth‟.A front page story published by thenewspaper on Saturday 06 April, headlined„The great recycling con trick‟, alleged thatmost of the recyclable waste that is shippedto countries including China, India andIndonesia is rejected by reprocessors and isinstead disposed of in landfill.And, the newspaper claims that the largeamount being disposed of overseas is a resultof „compulsory recycling schemes‟ set up inorder to meet the requirements of the Waste
NNFCC Market Review, April 2013, Page 7 of 8Framework Directive, rather than lack oflandfill space in the UK.But, Defra has branded the allegations„untrue‟. The Department said: “The vastmajority of the millions of tonnes of waste thatis legally exported for recycling is dealt withproperly and recycled into other products.“It is absolutely illegal to export householdwaste from the UK for dumping. Anyonecaught illegally exporting materials that arenot properly sorted will be prosecuted. Onlysorted materials such as metals, paper, card,glass or plastic that can be reused again canlegally be exported.”Click here for more information.ResearchBBSRC urges industry to participate insteering UK bioenergy andbiotechnology researchThe Biotechnology and Biological SciencesResearch Council (BBSRC) has issued a call toUK organisations that are commercialisingbiotechnology and bioenergy to become amember of a BBSRC Industrial Biotechnologyand Bioenergy Network.In January, BBSRC launched a call for cross-disciplinary, community building Networks inIndustrial Biotechnology and Bioenergy (NIBB).The Networks will foster collaborative activitiesbetween academic researchers andbusinesses at all levels; helping to identify anddevelop new approaches to tackle majorresearch challenges and deliver benefits inindustrial biotechnology.This will be through the application of a rangeof approaches, including genomic, systemsand synthetic biology, as well as theunderpinning sciences such as biochemistry,enzymology, metabolism and microbiology.A substantial number of Networks have nowbeen proposed on _connect and BBSRCencourages comments from industry on theNetwork discussions pages to help shape theirdevelopment before the closing date of 16April.Being a member of a Network will allowindustry access to the activities they will run,meet academics and help developcollaborative proposals for a variety offunding sources.Membership of a Network is required toaccess the joint BBSRC-TSB £25 millionIndustrial Biotechnology catalyst. TheNetworks will continue be open to newmembers after they are awarded, but now isa key opportunity to help shape theirdirection.BBSRC hopes to fund up to 10 Networksacross a range of scales.Click here for more information.EventsKey Challenge event: Growingwhatever the weather, 26 June 2013 inImpington, UKwww.innovationfarm.co.uk/upcomingevents/growing-whatever-the-weather-2013This flagship workshop event is aimed atproviding our academic partners with aplatform to engage directly with small tomedium size businesses (SMEs). We want toinspire an effective and productive two-waydialogue that helps our academic andindustry partners to understand how they canbest work together.
NNFCC Market Review, April 2013, Page 8 of 8Feedstock PricesArrows indicate rise (↑), unchanged (–) or fall (↓) from previous month.ENDEX WoodPellets FuturesWood Pellets Delivered(5% VAT), UKEx-Farm BarleyStraw (D1000), UKEx-Farm WheatStraw (D1000), UKDate €/tonne £/tonne £/tonne £/tonneApr 13 - 205.00-300.00 (– - –) 58.00-85.00 (↑ - ↑) 40.00-75.00 (↑ - ↑)May 13 129.75 (↓) - - -Jun 13 130.40 (↓) - - -Jul 13 130.03Q3 13 132.19 (↓) - - -Q4 13 133.93 (↑) - - -Q1 14 135.21For details on European wood pellet futures prices see www.iceendex.comFor details on UK wood pellet spot prices contact email@example.comFor details on straw spot prices see www.fwi.co.ukLIFFEWheatMATIFWheatMATIFRape-seedCBOTWheatCBOTMaizeCBOTSoybeanDate £/tonne €/tonne €/tonne $/tonne $/tonne $/tonneMay 13 200.00 (↓) 245.75 (↑) 471.00 (↑) 255.99 (↓) 255.51 (↓) 511.70 (↓)Jul 13 202.00 (–) - - 258.28 (↓) 258.28 (↓) 502.42 (↑)Aug 13 - - 438.50 (↑) - - 490.85 (↑)Sep 13 - - - 261.50 (↓) 223.13 (↓) 468.99 (↑)Nov 13 185.95 (↑) 213.50 (↓) 431.25 (↑) - - 454.66 (↓)Dec 13 - - - 266.82 (↓) 213.78 (↓) -Jan 14 187.25 (↑) 212.25 (–) - - - 456.86 (↓)Feb 14 - - 430.00 (↑) - - -Mar 14 193.20 212.50 (↑) - 271.97 217.81 (↓) 456.61May 14 - 212.25 (↑) 428.75 (↑) - - -For details on futures prices see www.hgca.comOther biomass feedstock prices are available upon request, simply contact firstname.lastname@example.orgCredits and DisclaimerNNFCC Market Review is edited by Dr Matthew Aylott for NNFCC members. Feedback is welcome.The Review has been compiled in good faith and NNFCC does not accept responsibility for anyinaccuracies or the products or services shown.NNFCCThe Bioeconomy ConsultantsNNFCC, Biocentre, Phone: +44 (0)1904 435182York Science Park, Fax: +44 (0)1904 435345Innovation Way, E: email@example.comHeslington, York, Web: www.nnfcc.co.ukYO10 5DG.