Crop Residues: Issues Relating to Collection, Transportation and Storage
Crop residues, such as corn stover (leaves and stalks of corn plants left in the field after harvest), are poised to be a significant source as a feedstock for biofuel production and as biomass for creation of electricity, but prohibitively high collection and transportation costs are often cited as major impediments to completion of projects. Despite these issues, crop residues offer significant benefits as a feedstock. First, crop residues are, as the name suggests, waste that is left over after harvesting the primary crop. This waste can be significant. Corn stover, for example, makes up about half of the yield of a corn crop. Second, use of the crop residue, rather than the primary crop, avoids the food vs. fuel debate. Third, the feedstock can come from a variety of crops (including corn, wheat or sorghum, just to name a few).
Any biomass project requires a reliable, long-term and economically viable feedstock agreement. To ensure a significant and reliable feedstock supply, developers looking to utilize crop residues must develop close, cooperative-like relationships with local farmers. Project developers often utilize a spoke and hub arrangement for the collection and storage of crop residues. The costs associated with transportation necessitate that the end user (or intermediate collection facility) be centrally located in the heart of a biomass zone. In general terms, transportation of crop residues in excess of 100 miles will likely be cost prohibitive.
Availability and Pricing
Since crop residue is a byproduct of the primary crop, the quantity available from any given grower is dependent upon the success of the harvest. Further, a certain amount of crop residue must be left on the ground to ensure soil health. The amount of residue that must be left behind is somewhere between 40 percent and 70 percent, depending on the type of crop and yield, topography, climate, management and tillage practices, soil type and other factors. Further, many growers find that leaving the entire residual amount in the field every few years or so offers additional soil enrichment benefits. Farmers must also factor in crop rotation (some crop residues yield more biomass than others), delay in fall tillage, erosion, decreased habitat for wildlife (especially game birds), soil nutrient issues and the alternative uses of crop residue, such as feed for livestock, when considering the amount of feedstock the farmer can supply and the purchase price. A 2008 report by the Biomass Research Development Board estimated that farmers will need to receive between $40 and $60 per dry ton of crop residue biomass. Densified crop residue would likely be closer to $60, if not higher. Further, issues such as baling and hauling responsibilities must obviously be factored into pricing.
Satellite processing may save costs by allowing certain preprocessing of crop residue feedstock to occur before transportation to the biorefinery or conversion facility. Drying and densification of the feedstock with mobile equipment that can be located close to the feedstock can reduce transportation costs. The establishment of regional processing centers that aggregate, process, store and supply biomass to the region could also provide significant cost reductions. In addition to drying and densification, regional aggregators could perform other preprocessing procedures to homogenize feedstock from several sources. Project developers often find that using a combination of crop residues offers significant benefits. For example, combining wheat straw and corn stover creates a higher yield biomass. Further, having a second source of feedstock protects the end user against crop failure and provides the logistical benefits associated with a broader harvest window, such as decreased storage costs. Larger developers may be able to decrease expenses associated with having multiple feedstock agreements. The aggregator, given its size, may be able to provide a more reliable supply, as a result of the large quantities it can handle.
Denser fuel pellets can offer some cost savings in transportation and storage but the drawback is that often the pelletization process results in feedstock loss. At the same time, the storage and transportation costs of denser pellets are significantly lower than other options, such as baling. Corn stover is typically compacted into large, round bales on the farm. The cost of a round baler is actually significantly less than the cost of a standard small, square baler. Further, developing synergies between harvest and transport, for example by using self-compacting wagons for both harvesting and transportation, may also provide cost savings.
Depending on the size of the end user and the feedstock involved, storage may be needed anywhere from six months to one year. In addition, storage issues will depend largely upon the climate. In the Midwest, crop residue must weather ice, rain, snow and humidity. Wrapping large, round bales with mesh offers some protection from the elements. Water tends to bead up and roll off the mesh-wrapped bales. If the bales are stacked, some of this water repellant effect is lost, so a tarp over the top bales may add additional protection. The mesh wrap and tarps obviously add additional cost, but the avoided feedstock loss may offset the costs. Indoor storage is another option, although that usually results in more densely packed bales, which increases the risk of loss due to fire. Improper storage techniques can result in potentially significant biomass loss. The longer dry biomass sits, loss due to aerobic biodegradation will occur. If the biomass gets wet, you will also have loss, including methane. These emissions, when added to the energy expended in harvest, collection and transportation can result in significant greenhouse gas emissions. In addition to feedstock loss and emissions, wet bales can heat up to the point that fire becomes a realistic concern.
Transportation and Delivery
Transportation is arguably the single most important cost factor in the entire biomass supply chain. The transportation costs can make or break a project’s margin. Transportation cost is directly associated with the form of feedstock, with pellets, bundles, bags and bales offering more efficiencies than loose feedstock. Transportation may occur in stages, such as from field to aggregator and then aggregator to end user. Transportation by tractor-trailer is most common, although train or water as the primary transport mechanism should also be considered.
Delivery schedules must be negotiated and will depend upon the requirements of the purchaser, its storage capacity and the type of feedstock. Further, if large round bales are being delivered, the receiving area must be large enough and organized in a way that avoids truck congestion. The parties involved should consider how emergency deliveries will be handled and whether either party has the right to cancel or postpone a regularly scheduled delivery. Further, the time of day during which delivery will occur must be considered so that deliveries do not disrupt operations. Depending upon the facility design, the type of feedstock and the storage capacity of the facility, deliveries may be to a storage area or a staging area. The facility may want some flexibility in delivery location depending upon the time of year or other factors, such as facility maintenance or use of a secondary feedstock.
Because crop residue is a byproduct of the grower’s primary business, it is not often the focus of a grower’s attention and business plan. As such, growers may be less willing to make changes to their underlying business and practices simply to develop a supply of crop residues. Therefore, purchasers of crop residues must be willing to work with growers to determine what collection and transportation options will work best. Depending on the underlying feedstock and its geographic location, different collection and transportation techniques may be needed.
Author: Kate Bechen
Attorney, Michael Best & Friedrich LLP’s
Energy & Sustainability Industry Group