An economic comparison of dedicated crops vs agricultural residues as feedstock for biogas of vehicle fuel quality

Abstract

The vast majority of the biofuels presently used in the EU are so called first generation biofuels produced from crops. Concerns of food security, displacement of food crop production and indirect land use change (iLUC) has led to the introduction of measures to reduce the use of first generations biofuels and promote so called advanced biofuels based on feedstock that does not compete with food/feed crops, such as waste and agricultural residues. In Sweden, 60% of the biofuel consumption is already based on waste/residual feedstock, and a unique feature of the Swedish biofuel supply is the relatively large use of biogas for transport, representing 9% of the current use of biofuels. The use of waste/residues dominates the biogas production, but agricultural residues, representing a large domestic feedstock potential, are barely used at present. This could indicate that biofuels from such feedstock is non-competitive compared both to fossil fuels and to biofuels produced from crops and waste under existing policy framework. This study show that without subsidies, the production cost of biogas as biofuel from all non-food feedstocks investigated (grass, crop residues and manure) is higher than from food crops. A shift from food crops to residues, as desired according to EU directives, would thus require additional policy instruments favoring advanced biofuel feedstock. Investment or production subsidies must however be substantial in order for biogas from residues to be competitive with biogas from crops.