16 November 2001

Surplus wheat perfect alternative fuel source

MEETING proposed EU levels for bio-fuel use could remove the entire UK exportable surplus of wheat, boosting prices paid on farm whether wheat is grown for the new market or not, says Wessex Grain.

The EU proposes that 2% of member states road fuel use should be bio-fuel by 2005 and 5.75% by 2010. Based on current growth rates, that would mean the UK would need a massive 2.6m tonnes of bio-fuel by 2010, says managing director Malcolm Shepherd.

Given the size of that target, every avenue of bio-fuel production must be explored, but a key one will have to be bio-ethanol from wheat, he believes. "It is the only thing we grow in anything like enough volume."

Wheat has a number of key advantages as a fuel crop. UK farmers are familiar with the agronomy and geared up to grow it, high dry matter means transport costs/t are low and, as a globally-traded commodity, processors and growers have more market options available.

But, most importantly, the UK has a surplus of between 2m and 4m tonnes of it every year, he says. That could all be channelled into bio-ethanol production, allowing the whole domestic grain market to rise.

"It would change us from being a net exporter to being a complete home consumer of wheat. Prices wouldnt have to drop to the world market floor so we can compete on the export markets."

While higher grain prices might concern some livestock producers, one-third of the output of the production process is dried distillers grain, a valuable high protein home-produced livestock feed, he adds.

In terms of bio-ethanol production, the process is about 33% efficient, producing 1t of fuel for every 3t of wheat processed. With varieties and agronomy tailored to bio-ethanol production that efficiency could increase to 40% in the future.

The most likely use of the fuel, at least initially, will be as a petrol additive, he believes. "It can be included at up to 10% without adjusting the engine and at 5% you wouldnt even know it is there."

Based on current UK petrol use of 22m tonnes/year, at 5% bio-ethanol inclusion that would be 1.1m tonnes of bio-ethanol, creating a demand for 3.3m tonnes of wheat. And that takes no account of the 15m tonnes/year of diesel used on UK roads, he adds.

All that is needed is government approval for pilot projects to go ahead and a reduction in duty on the bio-fuels. "We could easily compete at current grain and fuel prices if we were given the same duty favours that LPG is getting. At that level, we could realistically pay £80/t for wheat."

Bio-fuel project bid

Wessex Grain is one of a number of companies to have submitted bids to run pilot bio-fuel projects under the governments Green Fuels Challenge.

British Sugar is reported to be assessing the possibilities of producing bio-ethanol from fodder beet, while others are bidding to produce other alternative fuels.

An announcement is expected in the Chancellors pre-Budget statement later this month. &#42

Wheat could be the biggest bio-fuel crop of all, says Wessex Grain managing director Malcolm Shepherd.

WHEATBIO-ETHANOL

&#8226 Use up export surplus.

&#8226 All prices would rise.

&#8226 Replaces fossil fuels.

&#8226 Meets EU proposals.