Cereal straw for bioenergy production in an Australian region affected by climate change

Abstract

The south-west of Australia is being affected by a warming, drying trend in its climate. In response to these changing climatic conditions, as well as changes in farm commodity price relativities, farmers have adjusted their mix of enterprises to favour cereal production. As a result, an increasing potential source of cereal straw for bioenergy production has emerged. This paper examines how temporal and spatial costs of cereal straw accumulation may affect the establishment of a bioenergy plant in the region, with climate change impacts being highlighted. Logistics models based on mathematical programming are constructed for a range of plant sizes. Modelling results identify the cost structures of cereal straw accumulation for these plant sizes. Plant sizes are characterised by different cost structures and levels of volatility in their costs of grain accumulation. The profitability of bioenergy production based on cereal straw in this region of Australia is particularly exposed to climate variability, especially for larger plant sizes. The projected change in climate supports a relatively small reduction in the costs of cereal straw accumulation. These findings will affect decision-making over investment in a long-lived specific asset such as a bioenergy processing plant.