social and economic issues of pyrolysis processing systems and biochar

Department of Economics

Social and Economic Issues of Pyrolysis Processing Systems and Biochar

Pyrolysis and Biochar WorkshopAmes, Iowa

November 30, 2009

Chad HartAssistant Professor/Grain Markets Specialist

[email protected]


Crop Productivity

Source: USDA - NASS

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

Re

lativ

e Y

ield

(1

97

0 =

1)

Wheat Corn Cotton Soybean


Crop Productivity Boost from Biochar

0

50

100

150

200

250

300

Co

rn Y

ield

(bu

/acr

e)

0

20

40

60

80

100

120

Wh

ea

t Y

ield

(b

u/a

cre

)

Corn Co+8 Co+25 Wheat Wh+8 Wh+25


Agricultural Production Costs

Source: USDA, Economic Research Service

Item 2009F 2010F 2009F 2010F 2009F 2010F 2009F 2010F 2009F 2010F

Dollars per planted acreOperating costs: Seed 71.62 77.84 58.08 63.13 14.27 15.51 101.12 109.91 59.51 64.68 Fertilizer 135.86 147.63 22.33 24.27 51.54 56.01 72.63 78.93 110.71 120.30 Chemicals 28.62 29.46 17.61 18.12 10.35 10.66 73.68 75.83 77.66 79.93 Custom operations 11.21 11.61 6.68 6.92 6.97 7.21 27.55 28.53 68.92 71.37 Fuel, lube, and electricity 28.66 33.81 13.82 16.30 17.94 21.16 43.23 51.00 95.83 113.04 Repairs 15.73 16.16 13.08 13.44 13.61 13.98 24.56 25.23 28.84 29.63 Other variable expenses 1/ 0.13 0.14 0.11 0.12 0.34 0.35 108.02 115.88 12.06 12.48 Interest on operating capital 0.44 1.27 0.60 1.72 0.21 0.61 0.68 1.94 0.64 1.85 Total, operating costs 292.27 317.92 132.31 144.02 115.23 125.49 451.47 487.25 454.17 493.28

Allocated overhead: Hired labor 2.44 2.49 2.13 2.18 2.72 2.79 16.78 17.18 20.06 20.54 Unpaid labor 25.82 26.43 17.23 17.65 23.68 24.24 40.13 41.09 45.63 46.72 Capital recovery 79.96 82.59 75.41 77.90 61.74 63.77 85.74 88.56 116.10 119.93 Land 111.58 114.69 98.29 101.03 50.82 52.24 54.73 56.25 145.19 149.24 Taxes and insurance 9.15 9.78 10.64 11.37 9.99 10.67 10.54 11.26 21.26 22.71 General farm overhead 14.55 14.95 14.66 15.06 9.37 9.62 18.21 18.71 25.94 26.65 Total, allocated costs 243.50 250.93 218.36 225.19 158.32 163.33 226.13 233.05 374.18 385.79

Total costs listed 535.77 568.85 350.67 369.21 273.55 288.82 677.60 720.30 828.35 879.07

Corn Soybeans Wheat Cotton Rice


Change in Economic IncentivesCorn Soybeans Wheat

Yield (bu/acre) 162.9 43.3 44.4

Price ($/bu) 3.55 9.20 4.85

Revenue ($/acre) 578.30 398.36 215.34

Costs ($/acre) 535.77 350.67 273.55

Net ($/acre) 42.53 47.69 -58.21

Current cropping decisions based on grain revenues and costs

Harvest of biomass and reincorporation of biochar could significantly change incentives

•Higher crop yields, lower crop prices•Biomass revenues•Biochar costs•Carbon policy benefits/costs

It’s the creation of a new set of markets.

Department of EconomicsSource: NREL

Price Variations

Department of EconomicsSource: NREL

Department of EconomicsSource: USDA - Census of Ag.

Department of EconomicsSources: USDA - Census of Ag., ISU - Mike Duffy

Percent of Iowa Farmland by Residence of Owner

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Iowa Resident Non-Iowa Resident

1982 1992 2002 2007

Department of EconomicsSources: USDA - Census of Ag., ISU - Mike Duffy

Percent of Farmland Based on Primary Reason for Owning Land

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Income Investment Family Home, hunting, etc

Department of EconomicsSource: USDA, Agricultural Prices, Oct. 30, 2009


Portable Biochar Facilities

Source: Biochar Systems


Government Policies Biomass Crop Assistance Program

To support production of crops for bioenergy and assist with collection, harvest, storage, and transportation of biomass to conversion facilities

Matching payments$1 for each $1 per ton paid by conversion facility, up to $45

per ton, for 2 years

Water Efficiency via Carbon Harvesting and Restoration (WECHAR) BillWould establish loan guarantees and grants for

biochar projects


Thank you for your time!

Any questions?

social and economic issues of pyrolysis processing systems and biochar

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