Report predicts increased use of ag residue

By Staff | March 14, 2014

A recent report by the Netherlands-based Rabobank predicts that agricultural residues will pay an increasingly important role in European bioenergy production. Although wood is expected to continue to dominate the sector, Rabobank indicated that increasing global demand for solid biomass is expected to increase prices for current feedstocks, including pellets and wood chips. Agricultural residues would help meet bioenergy demand.

The report notes there are several challenges associated with using agricultural residues in place of wood pellets, including a lack of high-volume suppliers, which complicates the supply chain in terms of logistics and contracting. In addition, agricultural residues have generally not been pelletized and are less efficient for use in cofiring applications. While solutions for these problems exist, the report stresses that it will take investment to achieve them. By 2020, Rabobank predicts that the revenues and cost savings resulting from the use of agricultural residues will more than compensate for higher supply risks and investments.