Costs and profitability of crops for bioeconomy in the EU

Abstract

The bioeconomy is the cornerstone of the EU's policy for shifting economic and societal trends towards circularity and low carbon arrangements. Europe has several crops that can be used as raw materials for this purpose, however pressure on land which might displace other activities and industrial competition for cost efficient raw materials remains a challenge. Hence, ensuring good yielding capacity and examining the likelihood to produce more by exploiting low quality, unused land can present significant opportunities to increase sustainable, locally sourced supply and at the same time offer profitable solutions to both industry and the farmers. This paper estimates the production costs of fourteen crops (oil, sugar, starch and lignocellulosic) and analyses how their profitability can be influenced by yield increases and cultivation in low quality land. Results show that there are profitable options for all crops under current market prices and land types except for cases in countries where crop productivity is rather low to sustain farm incomes. The analysis confirms that Europe has plenty crop options as raw materials for bioeconomy. Decision makers however must ensure future research and policy support are oriented towards sustainable yield increases and accelerate rehabilitation of land that is unused and of low quality.