Emerging international bio-energy markets and opportunities for socio-economic development

Abstract

Rapidly developing international bio-energy trade may evolve over time into a "commodity market" which can secure supply and demand in a sustainable way; sustainability being a key factor for long-term security. It is clear that on a global scale and over the longer term, large potential biomass production capacity can be found in developing countries and regions such as Latin America, Sub-Saharan Africa and Eastern Europe. If indeed the global bio-energy market is to develop to a size of 400 EJ over this century (which is quite possible given the findings of recent global potential assessments) the value of that market at US$ 4/GJ (considering pre-treated biomass such as pellets) amounts some US$ 1.6 trillion per year. This creates important future opportunities for such regions, given the expected increased role of bio-energy within the world's energy supply. Consequently, this poses the fundamental question of how these potential major producers and exporters of bio-energy can benefit from the growing global demand for bio-energy in a sustainable way, i.e., that bio-energy exports can contribute to rural development, benefit local communities and be an integral part of overall development schemes, including the existing agricultural and forestry sectors. In this paper the links between international bio-energy trade and socioeconomic development and how sustainable bio-energy production could be realized are explored. Drivers, barriers and future potentials for international bio-energy markets are discussed and socioeconomic implications for possible exporting countries are identified. By doing so, several key opportunities and issues for the developing international bio-energy markets and their possible socioeconomic impacts on developing and rural regions are raised that should be taken into account by policy-makers, market parties, international stakeholders and other key stakeholders. Summarizing, although international bio-energy trade and markets are developing very rapidly and the future looks bright given market demand and potential supplies, many barriers also exist that can disturb or at least slow down a sound development of such markets. Also, there are important concerns about competition for land that may result in conflict with food production, water resources and biodiversity protection. Although biomass production may well provide a crucial strategy to enhance sustainable land-use management, negative developments should be avoided, e.g., by clear standards and best-practice guidelines for (the design of) biomass production systems and their integration in agricultural areas.

Bioenergy from “surplus” land: environmental and socio-economic implications

“…Land abandoned due to poor economics of farming, for example after a political transformation period, might have a high potential for bioenergy supply, once the eco-nomical situation has changed or payment schemes for farmers have been established (Faaij and Domac 2006;Krasuska et al 2010). If, however, abandoned land of below average quality gets reinstated for cultivation of dedicated energy crops, yields might be modest (Krasuska et al 2010).…”

“…Consequently, a major constraining factor for cultivation of energy crops in such areas is water availability and the water footprint (Faaij and Domac 2006;Smeets et al 2009). The issue is severe and Gerbens- Leenes et al (2009) suggest extending the ethical discussion on whether food crops can be used for energy to a discussion on whether we should use our limited water resource base for food or for energy (a discussion best held on the basis of catchment areas).…”

“…The type of employment in marginal areas may be related to the type of bioenergy chain, in turn associated with the productivity of a region and the spatial extent of the area, setting the potential scale of the bioenergy enterprise. Faaij and Domac (2006) distinguish between high-value employment and low value employment generated by bioenergy supply chains, noting that in developed countries wages for bioenergy workers are equivalent to other technical qualified workers, whilst in developing countries workers are often paid below average wages. The implementation of standards, such as those of the International Labour Organisation, may help to assure higher quality employment in developing countries.…”

“…Economic forces and farmer flexibility considerations may favour planting of high yield annual crops on fertile soils, with poor environmental and socio-economic performance (Boehmel et al 2008). Rapid expansion of sugar cane and biodiesel production in Columbia and Brazil provide possible examples of a trade-off between economic growth and employment on the one hand, and environmental pressure on the other (Faaij and Domac 2006).…”

“…Human rights may also be adversely affected where bioenergy chains are developed rapidly in response to top-down targets and economic drivers (NCB 2011). Faaij and Domac (2006) report that bioenergy chains in Austria and Sweden developed by entrepreneurs in a bottom-up process lead to a more diverse pattern of development compared with patterns arising from development by mature industries (e.g. Finnish forestry industry), where large-scale centralised operations are preferred.…”