VI.a Agriculture and land use Costs

Title: VI.a Agriculture and land use Costs

Content: This covers:

# The cost of producing the feedstocks of bioenergy in the UK:
## Growing biocrops: See Biomass 1st generation biocrops cost data and Biomass 2nd generation biocrops cost data
## Collecting straw: See Biomass straw collection cost data
## Collecting manure: See Biomass manure collection cost data
## Collecting the arisings from forestry: See Biomass forestry arisings collection cost data
# The cost of reducing agricultural emissions:
## Soil management cost data
## Enteric fermentation abatement cost data
## Manure management cost data

This section does not cover:

* Converting the feedstocks into a useful fuel (see V.a Biomatter to fuel conversion costs)
* Imported bioenergy (see V.b bioenergy imports Costs)
* Non-agricultural waste (see VI.b Volume of Waste & Recycling Costs)
* UK algae production for fuel (see vi.c Marine algae Costs)

h1 TECHNICAL ASSUMPTIONS

UK land use is modelled on sheet VI.a of the excel model.

The technical assumptions are documented on pages 125 to 146 of the original 2050 Pathways Analysis Report. In response to the call for evidence, the tool was changed so that land use and livestock could be adjusted separately, and the yield growth of 2nd generation biocrops was altered. These changes are documented on pages 107 to 115 of the Government's response to the Call for Evidence. 

The user can make two changes that impact on agriculture and land use costs. 

# They can set the area of UK land taken up by energy crops
# They can set the livestock population in the UK

Some key assumptions are:

h2 Land use

* In 2050 biocrops could be cultivated over 3502, 11726, 23850 and 41680 km2 at levels 1, 2, 3 & 4 respectively.
* Second generation biocrop yield is assumed to be 10 oven dried tonnes/hectare and to grow at between 0.3% and 1.5% a year.
* In 2050, between 5% and 100% of straw is collected for energy use, compared with 3% in 2007.
* In 2050, between 50% and 90% of manure is collected for energy use compared with 2% in 2007.
* In 2050, between 5% and 80% of 'arisings' from forestry are collected for energy use, compared with 3% in 2007.

h2 Livestock

* The number of dairy cows grows at 0.2% pa, stays static, declines at 0.2% pa or declines at 0.5% pa at levels 1,2,3 & 4 respectively. Poultry numbers remain static. Other livestock follow a similar trajectory to dairy cows.

h2 Emissions

* Dairy cows emit 302 kgCO2e/head in 2007 and this declines by 0.1% to 0.4% pa to 2050.
* Non poultry livestock is assumed to produce 0.4 odt/head of manure in 2007. The emissions from slurry are assumed to be 484 kgCO2e/odt in 2007 and decline 0.1% to 0.4% pa to 2050.
* Soil emissions are assumed to be 23 MtCO2e in 2007 and decline 0.6% pa to 2020, and then 0% to 0.2% pa to 2050.

h1 COSTS METHODOLOGY

h2 Energy Crops

Once the percentage of land in the UK taken up by energy crops is set, this is translated into a level of energy (TWh) available. Energy crops are treated as a fuel cost in £/TWh. The values used are:

* 2050 working assumption Biomass 1st generation biocrops 2010-2050
* 2050 working assumption Biomass 2nd generation biocrops 2010-2050
* 2050 working assumption Biomass straw collection 2010-2050
* 2050 working assumption Biomass manure collection 2010-2050
* 2050 working assumption Biomass forestry arisings collection 2010-2050

h2 Agricultural emissions

As a temporary solution, the cost of agricultural emissions reductions are calculated using £/tCO2e abated costs from exiting marginal abatement curves. A longer term solution will be to calculate the specific capital and operating costs required to implement the changes that would actually cause the emissions reductions.

h3 Abatement costs of soil management

Emissions from soil are assumed to decline at different annual rates from their 2007 level across the pathways. This is translated into a MtCO2e saved compared with 2007. This is multiplied by a £/tCO2e to create a cost of that abatement. 

The £/tCO2e is defined separately for the first 1.9MtCO2e, which is abated under all pathways by 2020, and the subsequent extra range of 0 to 1.5MtCO2e which might occur between 2020 and 2050, depending on the pathway.

The £/tCO2e range used is shown here:

# Up to 1.9 MtCO2e abatement: 2050 working assumption Soil management Up to 2020 2010-2020
# Subsequent up to 1.5 MtCO2e abatement: 2050 working assumption Soil management Up to 2050 2020-2050

h3 Abatement costs of enteric fermentation

Emissions per head of animal are assumed to decline at different annual rates from their 2007 level across the pathways. To work out the cost of abatement:

# The MtCO2e emissions saved compared with 2007 are calcualted assuming that the number of animals are held constant.
# This value is multiplied by a £/tCO2e to create a £m figure.
# That £m figure is linearly scaled to reflect any increase or decrease in catle numbers in that pathway.

The £/tCO2e working assumption is detailed here: 2050 working assumption Enteric fermentation abatement 2010-2050

h3 Abatement costs of Manure management

Emissions per head of animal are assumed to decline at different annual rates from their 2007 level across the pathways. The fraction of manure that is collected for use in anaerobic digestion also changes. To work out the cost of abatement:

# The MtCO2e emissions saved compared with 2007 are calculated assuming that the number of cattle and the proportion of manure collected are held constant.
# This value is multiplied by a £/MtCO2e to create a £m figure.
# That £m figure is linearly scaled to reflect any increase or decrease in cattle numbers and any increase in manure collection for anaerobic digestion in that pathway.

The £/tCO2e working assumption is detailed here: 2050 working assumption Manure management 2010-2050

Note that the cost of emissions savings from using manure in anaerobic digestion are already captured in the manure collection costs (above) and the costs of anaerobic digestion (see V.a Biomatter to fuel conversion costs)

h3 Our approach to food consumption

We are not assuming food consumption decreases. Therefore do not model costs of arable land.

h1 Methodology Concerns

h2 Double counting of fuel costs

The cost of fuel in producing biocrops may be double counted, once in the £/TWh of crop and once in the fuel used for UK agriculture.

h2 Splitting the cost of producing biocrops into capital and operating costs

Ideally we would like to split the cost of producing biocrops into capital and operating costs.

h2 Misaligned counterfactual for marginal abatement curves

We are relying on marginal abatement curves for calculating the cost of emissions abatement. We are applying this cost to the abatement compared with 2007, which may be different from the underlying counterfactual used in the abatement curve.

In particular, the potential abatement from manure management differs between the 2050 pathway calculator and the MacLeod et al 2010 cost source. This may be due to the way MacLeod et al have worked out the interaction between manure management and anaerobic digestion.

h2 Splitting the cost of emissions abatement into capital and operating costs

Ideally we would like to split the cost of emissions abatement into the actual capital investments and operating costs changes required to deliver that abatement, rather than a simple £/tCO2e abated.

h2 Negative abatement costs

The MacLeod et al 2010 cost source reports many of the abatement options as being at negative cost. It is unclear whether it is valid in our methodology to have negative abatement costs, so for the moment assuming the range starts at zero. We need to establish whether this is correct.

h2 Abatement potential after 2022

The MacLeod et al 2010 cost source reports abatement to 2022. It is unclear whether these costs and potentials can be extended to 2050.

h1 GENERAL COMMENTS

Please use this space to add any general comments. Please include your name when you comment.

Are the yield calculations right? In Trajectory 4, which has 17% of the country, i.e. 4.1m hectares, you get 545 TWh, i.e. 1960PJ, which comes to 476GJ per hectare. If you start in 2010 with 10 oven dried tonnes (odt) per hectare, and allow forty years of 1.5% yield growth, that gives you around 18 odt/hectare. Which means you're assuming a calorific value of the wood at 26 GJ/oven dried tonne - much higher than figures normally seen in the literature, of around 17-19 GJ/odt.

Secondly, there is a supply curve at work here. If 17% of UK land (which equates to 90% of arable land) is under energy crops, what kinds of prices must be paid to energy crops to out-compete food production? Clearly, in Trajectory 4, the average price per GJ of energy crop should be higher than the average price in Trajectory 1. 



User: John Christopher

Picture updated at: 

Signed off by: 

Signed off at:

Title: VI.a Agriculture and land use Costs

Content: This covers:

# The cost of producing the feedstocks of bioenergy in the UK:
## Growing biocrops: See Biomass 1st generation biocrops cost data and Biomass 2nd generation biocrops cost data
## Collecting straw: See Biomass straw collection cost data
## Collecting manure: See Biomass manure collection cost data
## Collecting the arisings from forestry: See Biomass forestry arisings collection cost data
# The cost of reducing agricultural emissions:
## Soil management cost data
## Enteric fermentation abatement cost data
## Manure management cost data

This section does not cover:

* Converting the feedstocks into a useful fuel (see V.a Biomatter to fuel conversion costs)
* Imported bioenergy (see V.b bioenergy imports Costs)
* Non-agricultural waste (see VI.b Volume of Waste & Recycling Costs)
* UK algae production for fuel (see vi.c Marine algae Costs)

h1 TECHNICAL ASSUMPTIONS

UK land use is modelled on sheet VI.a of the excel model.

The technical assumptions are documented on pages 125 to 146 of the original 2050 Pathways Analysis Report. In response to the call for evidence, the tool was changed so that land use and livestock could be adjusted separately, and the yield growth of 2nd generation biocrops was altered. These changes are documented on pages 107 to 115 of the Government's response to the Call for Evidence. 

The user can make two changes that impact on agriculture and land use costs. 

# They can set the area of UK land taken up by energy crops
# They can set the livestock population in the UK

Some key assumptions are:

h2 Land use

* In 2050 biocrops could be cultivated over 3502, 11726, 23850 and 41680 km2 at levels 1, 2, 3 & 4 respectively.
* Second generation biocrop yield is assumed to be 10 oven dried tonnes/hectare and to grow at between 0.3% and 1.5% a year.
* In 2050, between 5% and 100% of straw is collected for energy use, compared with 3% in 2007.
* In 2050, between 50% and 90% of manure is collected for energy use compared with 2% in 2007.
* In 2050, between 5% and 80% of 'arisings' from forestry are collected for energy use, compared with 3% in 2007.

h2 Livestock

* The number of dairy cows grows at 0.2% pa, stays static, declines at 0.2% pa or declines at 0.5% pa at levels 1,2,3 & 4 respectively. Poultry numbers remain static. Other livestock follow a similar trajectory to dairy cows.

h2 Emissions

* Dairy cows emit 302 kgCO2e/head in 2007 and this declines by 0.1% to 0.4% pa to 2050.
* Non poultry livestock is assumed to produce 0.4 odt/head of manure in 2007. The emissions from slurry are assumed to be 484 kgCO2e/odt in 2007 and decline 0.1% to 0.4% pa to 2050.
* Soil emissions are assumed to be 23 MtCO2e in 2007 and decline 0.6% pa to 2020, and then 0% to 0.2% pa to 2050.

h1 COSTS METHODOLOGY

h2 Energy Crops

Once the percentage of land in the UK taken up by energy crops is set, this is translated into a level of energy (TWh) available. Energy crops are treated as a fuel cost in £/TWh. The values used are:

* 2050 working assumption Biomass 1st generation biocrops 2050
* 2050 working assumption Biomass 2nd generation biocrops 2050
* 2050 working assumption Biomass straw collection 2010-2050
* 2050 working assumption Biomass manure collection 2010-2050
* 2050 working assumption Biomass forestry arisings collection 2010-2050

h2 Agricultural emissions

As a temporary solution, the cost of agricultural emissions reductions are calculated using £/tCO2e abated costs from existing marginal abatement curves. A longer term solution will be to calculate the specific capital and operating costs required to implement the changes that would actually cause the emissions reductions.

h3 Abatement costs of soil management

Emissions from soil are assumed to decline at different annual rates from their 2007 level across the pathways. This is translated into a MtCO2e saved compared with 2007. This is multiplied by a £/tCO2e to create a cost of that abatement. 

The £/tCO2e is defined separately for the first 1.9MtCO2e, which is abated under all pathways by 2020, and the subsequent extra range of 0 to 1.5MtCO2e which might occur between 2020 and 2050, depending on the pathway.

The £/tCO2e range used is shown here:

# Up to 1.9 MtCO2e abatement: 2050 working assumption Soil management Up to 2020 2010-2020
# Subsequent up to 1.5 MtCO2e abatement: 2050 working assumption Soil management Up to 2050 2020-2050

h3 Abatement costs of enteric fermentation

Emissions per head of animal are assumed to decline at different annual rates from their 2007 level across the pathways. To work out the cost of abatement:

# The MtCO2e emissions saved compared with 2007 are calculated assuming that the number of animals are held constant.
# This value is multiplied by a £/tCO2e to create a £m figure.
# That £m figure is linearly scaled to reflect any increase or decrease in cattle numbers in that pathway.

The £/tCO2e working assumption is detailed here: 2050 working assumption Enteric fermentation abatement 2010-2050

h3 Abatement costs of Manure management

Emissions per head of animal are assumed to decline at different annual rates from their 2007 level across the pathways. The fraction of manure that is collected for use in anaerobic digestion also changes. To work out the cost of abatement:

# The MtCO2e emissions saved compared with 2007 are calculated assuming that the number of cattle and the proportion of manure collected are held constant.
# This value is multiplied by a £/MtCO2e to create a £m figure.
# That £m figure is linearly scaled to reflect any increase or decrease in cattle numbers and any increase in manure collection for anaerobic digestion in that pathway.

The £/tCO2e working assumption is detailed here: 2050 working assumption Manure management 2010-2050

Note that the cost of emissions savings from using manure in anaerobic digestion are already captured in the manure collection costs (above) and the costs of anaerobic digestion (see V.a Biomatter to fuel conversion costs)

h3 Our approach to food consumption

We are not assuming food consumption decreases. Therefore do not model costs of arable land.

h1 Methodology Concerns

h2 Double counting of fuel costs

The cost of fuel in producing biocrops may be double counted, once in the £/TWh of crop and once in the fuel used for UK agriculture.

h2 Splitting the cost of producing biocrops into capital and operating costs

Ideally we would like to split the cost of producing biocrops into capital and operating costs.

h2 Misaligned counterfactual for marginal abatement curves

We are relying on marginal abatement curves for calculating the cost of emissions abatement. We are applying this cost to the abatement compared with 2007, which may be different from the underlying counterfactual used in the abatement curve.

In particular, the potential abatement from manure management differs between the 2050 pathway calculator and the MacLeod et al 2010 cost source. This may be due to the way MacLeod et al have worked out the interaction between manure management and anaerobic digestion.

h2 Splitting the cost of emissions abatement into capital and operating costs

Ideally we would like to split the cost of emissions abatement into the actual capital investments and operating costs changes required to deliver that abatement, rather than a simple £/tCO2e abated.

h2 Negative abatement costs

The MacLeod et al 2010 cost source reports many of the abatement options as being at negative cost. It is unclear whether it is valid in our methodology to have negative abatement costs, so for the moment assuming the range starts at zero. We need to establish whether this is correct.

h2 Abatement potential after 2022

The MacLeod et al 2010 cost source reports abatement to 2022. It is unclear whether these costs and potentials can be extended to 2050.

h1 GENERAL COMMENTS

Please use this space to add any general comments. Please include your name when you comment.

Are the yield calculations right? In Trajectory 4, which has 17% of the country, i.e. 4.1m hectares, you get 545 TWh, i.e. 1960PJ, which comes to 476GJ per hectare. If you start in 2010 with 10 oven dried tonnes (odt) per hectare, and allow forty years of 1.5% yield growth, that gives you around 18 odt/hectare. Which means you're assuming a calorific value of the wood at 26 GJ/oven dried tonne - much higher than figures normally seen in the literature, of around 17-19 GJ/odt.

Secondly, there is a supply curve at work here. If 17% of UK land (which equates to 90% of arable land) is under energy crops, what kinds of prices must be paid to energy crops to out-compete food production? Clearly, in Trajectory 4, the average price per GJ of energy crop should be higher than the average price in Trajectory 1. 



User: John Christopher

Picture updated at: 

Signed off by: 

Signed off at: