1. Economic aspects of willow growing in Sweden
Håkan Rosenqvist,
SLU
Sweden
Thanks to different EU projects, SLF and Värmeforsk for funding

2. Important economic variables in the decision-making process
·     Profitability
·       Utilization of existing resources and its alternative value
·       Risk spreading aspects

3. What should the payment for biofuels from energy crops be from the farmers point of view?
Farmers need compensation for:
Costs for growing the crop
Costs for land
Payment for new crop and risk compensation

4. Risk and risk reduction

5. Examples of risk reduction in energy crop cultivation
Increased knowledge
Cultivation technology
Subsidies
Contract design
Portfolio thinking

6. Energy Crop Production Costs
Growing Costs for Cost for
Crop cost land risk and
EUR/GJ EUR/GJ new crop
Yield Sum
Tdm
Willow
Poplar
Reed canary grass
Miscanthus
Hemp
Triticale whole crop
Straw

7. Yield level, tonne DM per hectare5 6 7 8 9 10 11 12 13 14 60
3.4
3.0
2.7
2.5
2.4
2.3
2.1
2.0
1.9 70
4.0
3.6
3.2
2.8
2.6 80
4.6
4.1
3.7
2.9 90
5.2
4.2
3.9
3.3
3.1
100
5.8
4.7
4.3
3.5
110
6.5
5.7
4.8
4.5
120
7.1
6.3
5.3
4.9
130
7.7
6.9
6.2
5.4
5.1
4.4
Cost level (%)
Cost for willow today, (EUR/GJ)

8. More important to increase the price for willow and RCG than yield level

9. Willow production costs in Northern Europe

10. High costs with small area of willow

11. Crops for today or the future?
Different cost reduction potential for different crops
Today's large crops have the lowest cost-cutting potential
There is knowledge and infrastructure for today's crops such as cereals and rapeseed
Plant breeding, technology and organizational development can reduce future costs.

12. Expected cost reduction potential during 15 year, compared with cereals
Willow 32%
Miscanthus 18%
RCG 15%
Hemp 12%
Straw 7%
Triticale (in bales) 6%

13. Cost breakdown example,
Reed canary grass/switchgrass
Willow

14. Planting costs per hectare in Sweden during the pioneer stage of growing Salix (in real terms, excl. plant stock).

16. Comparison for Salix plantations in Northern Ireland between pioneer costs and costs based on Swedish experience.

18. Willow growing in Sweden
(New subject in presentation)

19. Willow in Sweden 2016
Willow in Sweden is concentrated to different regions.
Most of the willows are located around the lake Mälaren close to Stockholm.
● Särskilt om Salix
Källa: Jordbruksverket

22. Important factors in Sweden for willow planting
Set-a-side land
Subsidies for planting
Environmental taxes
Forest residues has created a wood fuel market in Sweden
Chips from forest residues can delivered all year around

23. Farmers motives for planting Salix. In summary, they were:

24. Influence on Salix activity from certain farm characteristics

25. The characteristics of farmers, who regret their Salix plantation, compared to others, are

26. Farmers, who reduce their Salix plantation, have these characteristics compared with other farmers:
·    less land
·    more forest land
·    more often work outside the farm
·    less hours work on the farm
·    less use of advice

27. Soils for willow plantation

28. Location of the willow plantations in Sweden

29. Reasons for reduction of plantations

31. Some reflections and experience of Salix based on 74 meetings about the energy crops economy in

32. Experiences from meetings with mainly Salix growers
Salix growers are not a homogeneous group
Are both satisfied and dissatisfied growers

33. Satisfied Salix growers
Many of the satisfied growers seem to be engaged in sales and cultivation
Sludge is used as a way to increase the profitability

34. Reasons for dissatisfaction
Have not harvested the year they wanted.
Low harvest net income
Difficult to sell salix
Organization around harvest is sometime poor.
Selling of chips and organizational issues appear to be a major problem for salix cultivars than biology and harvesting technology

35. Engage important
Satisfied growers seem to engage more in their cultivation than dissatisfied growers
Important to create engagement to growers
Salix meetings have increased engagement with growers
Many salix growers seem to feel unsure about their crops.

36. There are a large number of farmers who do not like Salix and not grow Salix. Arguments from this group are:
Ugly
Destroy drainage
Difficult to sell salix
Failure to grow energy when food is needed in the world
Problems to restore the soil to food crops
Knowledge of Salix is ​​often relatively low in non-salix farming farmers.
Seems that salix is ​​not a "status crop" to grow.

37. Collaborate with local driving forces is important
There is a need for a driving entrepreneurs for things to happen
One way to increase Salix area is to collaborate with and focus on actions in areas where there are driving Salix people. If there is no local support, it is difficult to start with Salix.
There are conflicts between different Salix contractors, which maybe hold back cooperation.

38. Questions to think about!
How do we work to get increased cultivation of Salix and other energy crops where there are proper economic conditions?
How are the right conditions for profitable Salix cultivation or other energy crops created?

39. Economy in SRC with- and without waste water and sludge

40. Production costs and profitability

41. Yield for the different crops used in the calculations
Höstvete sås på hösten och skördas nästkommande vår. I Sverige odlas främst höstvete (85%), men internationellt dominerar vårveteodling. Höstvete ger större skördar än vårvete och odlas som brödsäd och som fodersäd. Höstvete innehåller mindre mängd gluten än vårvete och används därför främst till kakor, kex, kaffebröd och en del matbröd där volymen inte är så viktig.
Vårvete: sås på våren och skördas på hösten samma år. Det finns olika varianter av vårvete. Vad som skall odlas bestäms av kvarnarna och den vanligaste sorten i Sverige heter dacke. En annan mindre odlad variant benämns vinjett.

42. Costs and income included in the following calculations
All costs except the costs for land are included, e.g. OH, depreciation, interest rates and own work
No subsidies are included, except the 500 € in establishment cost subsidy for willow SRC
Basic Payment Scheme and greening CAP subsidies are not included in the calculations
Depreciation expense is the allocated portion of the cost of a company's fixed assets that is appropriate for the accounting period indicated on the company's income statement. For instance, if a company had paid $2,400,000 for its office building (excluding land) and the building has an estimated useful life of 40 years, each monthly income statement will report straight-line depreciation expense of $5,000 for 480 months. 

43. Production costs (€/MWh)
2 Faktorer som påverkar costs för :
- Ettåriga
- Handling är dyrare för att hantera (no drying for salix)
1 t DM = 4.39 MWh
5 kg N per ton DM
Efter varje gång, 7 gånger/22 år, 22 kg P
3 åriga kalkyler = cutting cycle

44. Gross margins (€/ha/yr)
På de middle-high Salix (1143 kr) är salix bättre… även om wheat (autumn-bread) is higher (2372) there is a question if there is available land within the crop rotation… we should look into the average of wheats and barley, then the situation is not so advantageous for cereals

45. Cost division in SRC (in €)
Willow SRC, production period 22 yr, fertilised only after harvest, new clones
Average harvest (22 yr) = 8,78
Establishment
11%
Fertilisation
13%
Harvest and field transport
33%
Tranport to DHP
19%
Selling costs 5%
Termination 1%
Management and OH costs
10%
Interest rate 9%
Sum
100%
Establishment is a relative small part of the costs, therefore a farmer should use good plant material.
Biggest part (52%) is associated to harvest

46. Things that improve profitability
Engagement in the management/cultivation and selling of chips
Well-managed crops that result in high yields
Geografical localisation
Municipal sludge and/or wastewater
Collaboration between all parts

47. Examples of business concepts with energy crops as a base
Selling heat
Dry and sell chips
Briketting of various feedstock
Take care of sludge or wastewater
Feed pigs in SRC

48. (New subject in presentation)
Waste water irrigation in willow

49. Photo WW

51. Some of the most important conclusions about waste water irrigation are (1)
Saved costs in treatment works is much more important than saved costs and higher yield in the willow plantation.
Its important to find right treatment works which have high costs in traditional treatment and low costs for vegetation filter.

52. Some of the most important conclusions about waste water irrigation are (2)
Pumps, ponds and pipes to field are higher costs than the irrigation equipment in field.
Fixed costs are higher than variable costs.

53. Positive factors to keep costs per kg N and P on a low level are
High N and P applications per hectare per year.
Long irrigation session.
High N and P concentration in the wastewater.
Short distance between treatment works and the vegetation filter.
Large area of willows.

55. Costs per ton sludge from Swedish treatment work
Costs per ton sludge from Swedish treatment work. Spreading is not included in the costs.
Method Number Average
Costs, Euro
Soil for green areas
Landfill incl. tax
Burning
Agriculture
Salix

56. Sludge application to SRC
Receiving sludge in SRC fields increase the economy of SRC
Compensation varies
A common increase on farm profitability is ca 50 € /ha/yr…
…but there are broader margins if you consider the alternative ways to treat sludge in ww treatment plants

58. Wastewater application
85-90% saving costs for the wastewater treatment plants (per treated kg N)
Increased biomass production and saving fertilisation costs (ca 15%)

60. Costs in treatment works for separating of nitrogen and phosphorus

61. Good conditions for waste water irrigation when:
Need for new investment in treatmentwork
Short distance between treatmentwork and willow field.
When it not need ponds for storage the water during wintertime.
Right entrepreneurs, right people at treatmentwork and right people at the municipality

62. Some of the most important conclusions about waste water irrigation are
Saved costs in treatment works is much more important than saved costs and higher yield in the willow plantation.
It´s important to find right treatment works which have high costs in traditional treatment and low costs for vegetation filter.
Pumps, ponds and pipes to field are higher costs than the irrigation equipment in field.
Fixed costs are higher than variable costs.

63. Positive factors to keep costs per kg N on a low level are
High N-applications per hectare per year.
High N-concentration in the wastewater.
Long irrigation session.
Short distance between treatment works and the vegetation filter.
Large area of willows.

64. Costs for wastewater irrigation
Investment for irrigation about Euro per hectare with 10 hectares irrigation.
Operation costs about 6 Euro per 100 cubicmetre water

66. Rosenqvist’s own willow SRC field
Agricultural soil, 110 ha
Good soil: 85 ha
Less good soil: 25 ha
Forest: 100 ha
Willow SRC: 6 ha
Willow on the worst part
Planted 1994
Older clones with low production
Not fertilised
Harvested 4 times
Last harvest: 2016
Winter was the market poor. I move the harvesting to next winter.

67. Harvest in 2016 Harvest: 29 ton DM/ha after 7 years
Price per ton DM: 75 € (17 € per MWh)
Income: €/ha
Harvest costs: 830 €/ha
Transport (100 km): 652 €/ha
Loading: 119 €/ha
Netto per ha: 576 €/ha

68. Mistakes made Too small turning points for the harvest equipment
Two different clones with different yields
Too humid at a small part in a small part of the field

69. Thankyou!