AGRICULTURE AND BIO-FUELS IN DEVELOPING COUNTRIES

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1 AGRICULTURE AND BIO-FUELS IN DEVELOPING COUNTRIES Brussels, 06 July 2007 Alexander Müller Assistant Director-General Natural Resources Management and Environment Department Food and Agriculture Organization of the United Nations

2 Food markets: drivers of the long-term outlook Total population (billions) Annual increments (billions) The driving forces of demand to 2030

3 Food markets: drivers of the long-term outlook Urbanization to accelerate 6 5 actual expected Billion people Urban Rural Source: UN, World Population Assessment 2002

4 Population growth is concentrated in developing countries Population growth: absolute increments millions Developed Developing World

5 Ageing and population dividend of an Asian Tiger

6 and rising consumption of livestock products

7 Food markets: Review and outlook to 2030

8 World markets and export opportunities Cereal imports of developing countries million tonnes Historical Development East Asia South Asia Near East/North Africa Latin America s.s.africa Projections

9 How big is the market for biofuels? Energy production and potential, biofuels and land use Energy source: All sources Exajoule (10 18 ), EJ Year World OECD non-oecd ) Potential based on Schrattenholzer and Fischer, IIASA, ) Based on IEA: Key energy statistics, ) Derived from Earth Policy Institute

10 How big is the market for biofuels? Energy production and potential, biofuels and land use Energy source: All sources Exajoule (10 18 ), EJ Year World OECD non-oecd Biomass Actual use ) Potential based on Schrattenholzer and Fischer, IIASA, ) Based on IEA: Key energy statistics, ) Derived from Earth Policy Institute

11 How big is the market for biofuels? Energy production and potential, biofuels and land use Energy source: All sources Exajoule (10 18 ), EJ Year World OECD non-oecd Biomass Actual use Biofuels Ethanol Biodiesel ) Potential based on Schrattenholzer and Fischer, IIASA, ) Based on IEA: Key energy statistics, ) Derived from Earth Policy Institute

12 Bioenergy supply in 2004 (according to IEA 2006) [%] Africa Asia Latin America China Non- OECD Europe Share of Bioenergy* in Total Primary Energy Supply [%] 3.0 OECD Former USSR Middle East

13 Brazil Indonesia Latvia El Salvador Pakistan Bangladesh India Senegal Honduras Vietnam Nicaragua Sri Lanka Guatemala Paraguay Gabon Rep. of the Congo Zimbabwe Eritrea Angola Cote d Ivoire Benin Ghana Togo Nigeria Myanmar Haiti Kenya Cameroon Zambia Sudan Mozambique Nepal Ethiopia United Rep. of Tanzania Democratic Rep. of Congo [%] of total primary energy supply Share of energy from biomass and waste in total primary energy supply for countries with a share of 30% and above Source: Juergens (FAO) 2006 based on data from IEA 2006

14 Bioenergy potential per region: different scenarios, year 2050 Exajoules/yr Africa 198 Latin America and the Caribbean CIS* & Baltic States North America Oceania 77 [EJ/year] Source: Juergens and Mueller forthcoming 2007, based on data from WWI 2006)

15 Bioenergy potential per type of biomass: different scenarios, year 2050 Exajoules/yr Total (more likely) Total Energy Crops (current agri. lands) Energy Crops (marginal lands) Forest Residues Agricultural Residues Dung Organic Wastes [Exajoules] Source: Juergens and Mueller forthcoming 2007, based on data from Faaij 2006

16 Net energy yield for different biofuels and crops [GJ/(ha*yr )] Eth. -Ligno-cellulose *** Biohydrogen - Ligno-cellulose BtL - Ligno-cellulose Eth. -Sugar beet Biomethane - silo maize SNG - Ligno-cellulose DME - Ligno-cellulose DMM - Ligno-cellulose Methanol - Ligno-cellulose Eth. -Wheat (grain only) Synthetic diesel - Lignocellulose Eth. -Sugar cane Hydrogen - Ligno-cellulose RME - Rapeseed Plantoil - Rapeseed Eth. -Grain Eth. -Maize (grain only) Eth. -Ligno-cellulose RME- Rapeseed Eth. -Sugar cane Eth. -Sugar beet [GJ/(ha*yr )] -20 Sources: FNR 2004; Hamelinck 2004; own calculations Notes: *** Yields based on Willow and Poplar in Europe and US; Large variations even between identical feedstock-biofuel combinations (Example: sugar cane derived bioethanol) due to differences in settings (AEZ, productivity, etc.)

17 Competitiveness by feedstock Parity prices: Petrol Crude oil Ethanol 120 Various feedstocks and farming/production systems 100 Crude, US$/bbl Petrol, US$/l Gasoline-Crude US$ Cane, Brazil, average Cassava, Thailand, OTC joint venture Mixed feedstock Europe BTL: Synfuel/Sunfuel Cane Brazil, top producers Cassava, Thaioil, 2 mio l/d Maize, US Palmoil, MPOB project Josef Schmidhuber (2005)

18 Floor and ceiling price effect in the sugar markets Crude oil prices drive sugar prices US$/bbl Cts/lb January January January January January January January January 2007 West Texas Intermediate Rawsugar contract Nr 11, NYBOT Data: Nymex and EIA, J. Schmidhuber (2007)

19 Poverty and Traditional Energy use Source:

20 International food security: Boom or bust for trade balances through an increased link between energy and food prices

21 Source: FAO Food Outlook

22 Source: FAO Food Outlook