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Chapter 4: The Energy Function of Agriculture

4.1 Energy in the Wider Agricultural Context

The first and foremost role of agriculture is the production of food and other primary goods and thereby contributing to food security. The concept of Sustainable Agriculture and Rural Development (SARD) aims to foster sustainable development in the agriculture, fisheries and forestry sectors that conserves land, water, plant and animal genetic resources, and is environmentally non-degrading, technically appropriate, economically viable and socially acceptable. Attaining food security requires policies that ensure social, cultural, political, and economic stability. Combining the economic, social and environmental functions of agriculture can help to achieve these goals.

Agriculture can deliver a wide range of non-food goods and services. This can include its use as a viable, sustainable source of energy, as set out in the FAO perspective (FAO/Netherlands, 1999) on the "Multifunctional Character of Agriculture and Land (MFCAL)". The perspective recognises that agricultural activity and related land-use contribute directly to other, non-agricultural functions comprising social, environmental, economic and cultural goods and services. These can result in significant benefits or costs. Evidence suggests that, in addition to food security, agriculture makes a major contribution to achieving sustainability in rural development, energy and the environment at local, national and global levels. The effective operation of the market stimulates the identification and enhancement of these multiple functions and the emergence of new techniques and technologies.

Plant and crop-based resources are used as raw materials for a wide variety of industrial products, ranging from wood used in paper and board manufacture, starches used in adhesives and vegetable oils used in paints and resins. Agriculture provides a key economic sector for the supply of carbo-hydrates, lignins and plant oils, and this supply is renewable over a short time frame compared with the supply of hydrocarbons from fossil fuels. In several industrialized countries there are steps being taken to enhance the use of plant and crop based renewable resources through technological developments (US DOE, 1998).

The role of agriculture as an energy demand sector has been examined in Chapter 2 of this study. Energy is needed for activities such as mechanization, water pumping, irrigation, fertilizer production, transport and food processing and storage. The role of agriculture as a major energy supply sector is rarely recognized or put into practice. Awareness of the potential for bioenergy as an economic driver for rural development, together with growing attention to global climate change have highlighted this new approach to the energy function of agriculture.

The traditional rural energy sector in developing countries is already largely based on biomass from agricultural and forestry sources. Woodfuel, especially charcoal, is already very much a traded commodity, and farmers can earn extra income from sale of woodfuels. There is further potential for improvement in woodfuel conversion technologies and stimulation of additional market mechanisms for traditional rural energy, as well as in the development of modern bioenergy technologies in electricity generation, using the experiences outlined out in Chapter 3.

4.2 Energy Supply from Agriculture

The production and use of biomass as energy sources are linked to many issues, including agriculture and food security, land use and rural development, sustainable forest management and biodiversity conservation, and mitigation of climate change. Bioenergy must also be seen in relation to poverty, population development and health. The fact that women and children in many rural areas spend a good portion of their working day in search for fuelwood, reflects the need to look at bioenergy in the context of gender roles and survival strategies for the poorest of the poor.

The imbalances between household economy and the environment needs to be resolved, together with conflicts between conservation and consumption of biomass and between the present and future needs of societies. It is also important to note that ways of producing and distributing conventional energy are changing as a result of new approaches such as privatization, decentralization, trade liberalization and globalization.

The analysis presented in Chapter 3 above has stressed the potential of forest and agro-industrial by-products (residues and wastes) as well as purposely grown energy crops to provide locally available sources of energy in rural areas. Access to adequate and affordable energy is one of the prerequisites for equitable socio-economic development, and use of biofuels can contribute towards a more gender balanced rural employment and income, and can strengthen rural livelihood systems to attain better levels of food security. New and/or improved technologies for bioenergy utilization as an industrial energy source at competitive market prices can contribute towards an improvement of rural livelihood systems.

Set against this approach is the potential threat to forests and trees outside forests if fuelwood is used in an indiscriminately and unsustainable way, which can result in forest degradation or deforestation, deterioration of watersheds, loss of soil fertility as well as biodiversity. Possible conflicts with other land use requirements must also be resolved. Nevertheless the analysis indicates that a substitution of fossil fuels through an increased utilization of biofuels, produced in a sustainable manner, can contribute towards a cleaner environment, reduction of emissions and mitigation of climate change.

4.3 Crops for Energy or Food?

Land availability is often seen as a constraint to the production of energy crops. With many people in developing countries still undernourished, it is a justified concern that there should be sufficient land for food production and that food should be the priority. However, food production is a complex socio-economic, political and cultural issue that goes beyond the earth's carrying capacity to grow food crops. If farmers are given the opportunity through economic incentives, land tenure rights and capital investment, they will be able to produce more food than has been the case so far.

In parallel with the prospects of increased food production, there are large areas of deforested and degraded land that would benefit from the establishment of biomass plantations, with estimates ranging up to over 300 Mha available for reforestation and agro-forestry (FAO/Netherlands, 1999). Other studies of the potential cropland resources in developing countries have indicated that these countries will be using only 40% of their potential cropland in 2025 (FAO, 1996b). The balance between higher yields in good lands and the benefits of bringing back into production degraded lands is an important issue.

Bioenergy programmes, when coupled with agro-forestry and integrated farming, have the potential to improve food production by making both energy crops and income available. Increasing agricultural production of biomass can be achieved by substituting for other agricultural crops that are in surplus, intermixing energy crops with food or forage crops in an agro-forestry approach, and incorporating into land conservation systems such as windbreaks and shelter-belts. There is also potential to increase the use of crop residues provided this is consistent with the levels of organic matter and control of erosion.

Table 4.1 lists some examples of dedicated energy crops, the conversion technologies being developed for their exploitation and the energy and food products that can be produced from them (Overend, 1999).

Table 4.1: Examples of dedicated energy crops


Conversion technology


Sugar cane

Gasification/existing boiler


Switchgrass, wood residues



Sorghum, switchgrass,
silver maple, cottonwood

Pyrolysis/combustion turbine






Co-firing./gasification combined cycle

Animal feed


Gasification combined cycle
Co-generation/alcohol production


Elephant grass, sugarcane, eucalyptus



4.4 Climate Change Mitigation

The threat of climate change is principally an energy-related problem. Current energy systems are based on the combustion of fossil fuels, which account for 75% of the world's primary energy supply. A second major aspect of the energy function of agriculture, therefore, is the contribution that agriculture can make to climate change mitigation by CO2 substitution24. Carbon sequestration through changes in land management practices are one area of interest, especially as changes such as the introduction of zero-tillage reduce energy consumption in arable farming. Important as it may be, sequestration alone is not a complete solution to climate change mitigation, and carbon sequestration issues are outside the scope of this report, which focuses on carbon substitution opportunities.

Looking specifically at energy supply issues, biomass offers a carbon-neutral source of energy that is renewable on a short time scale, and hence could provide an attractive means of climate change mitigation. The key aspects that should be considered are:

The Kyoto Protocol is designed to provide binding, quantitative limits on future net emissions of greenhouse gases (for a general description of the Protocol, see the UNFCCC web site at <>, and Grubb, 1999). Bioenergy could have a major role to play in helping to meet these limits, and mechanisms proposed by the Protocol might make use of agriculture's contribution to climate change mitigation. Whilst the emphasis in international discussions to date has been on forests as a source of carbon sequestration, agriculture also has a major role to play in carbon substitution through the increased use of modern biomass technologies.

Joint Implementation and the Clean Development Mechanism

Joint Implementation (JI) and the Clean Development Mechanism (CDM) are defined under the Kyoto Protocol to the UN Framework Convention on Climate Change as 'flexibility mechanisms' which allow an investor or donor country to fund projects which reduce greenhouse gas emissions (GHG) in a host country. In return the donor country receives 'credits' which contribute to their GHG emissions targets. In JI, a donor country will be an industrialized country with emission targets, whilst the host country will be an economy in transition. In the CDM, a donor country will again be an industrialized country with emission targets, whilst the host country will be a developing country without targets. The credits that will be transferred under JI are called emissions reductions units (ERUs), and those transferred under the CDM are called certified emissions reductions (CERs). Limits on the emissions that can be offset in Annex 1 countries by these mechanisms are likely to be established. It is expected that private sector investors in industrialized countries will undertake either or both of these types of investment if it is cheaper or easier to do so than reducing emissions at home.

The CDM is of particular relevance to developing countries. A cornerstone of the CDM is that projects implemented through it should assist the host country in achieving 'sustainable development'. CDM projects should also be integrated with national development programmes and be appropriate to the specific conditions of the host country. The essential feature of implementing the CDM will be to balance the aim of contributing to the sustainable development of the host countries with the needs of the donor countries to achieve GHG emissions reductions. CDM offers great potential for changing the global approach to development, moving this approach away from the Official Development Assistance framework to becoming a much more private sector led framework. If it is designed properly, the CDM can make a decisive contribution to sustainable development and provide a new channel for finance, investment, technology transfer and the promotion of equity.

Other features of the CDM include:

Projects that are funded via the CDM will be expected to contribute to sustainable development, and renewable energy investments using modern bioenergy technologies are a significant means of achieving this objective.

The CDM is due to begin operation from the year 2000, but, at the time of writing, the detailed rules for its operation have yet to be defined. However, several assessments are available of potential projects and their benefits. Some of these studies assessing the value of carbon emissions avoidance by use of renewable energy systems illustrate the economic potential of agriculture's contribution. Comparing the results of these studies with other climate change mitigation measures, such as fuel switching for grid-based electricity generation (to gas from coal), and improved energy efficiency in industry enable agriculture's contribution as a carbon-neutral energy resource to be ranked against other emissions control technologies. Nevertheless research in this field is only just starting, and no firm policy conclusions can be drawn, especially as the Kyoto Protocol is not yet in force.

Encouragement of international investment from industrialized countries into developing countries as a means of accelerating renewable energy development may be politically sensitive. Whilst international investment could help local development and lead to greater up-take of certain technologies, it may also expose countries to international competition that could damage indigenous industries and increase dependence on foreign technology. These kinds of impact have particular relevance for renewable energy investments where capital costs are high, and where intellectual property remains in the industrialized world.

It seems clear that technology transfer activities need to be treated carefully and that international organizations have to proceed with caution in stimulating these activities. Whether through the CDM or other flexible mechanisms, foreign investment openings for renewable energy systems, including modern bioenergy, would need to be integrated with robust national industrial and technology development policies. Integrating foreign investment and climate change policy is, therefore, not simply about increasing opportunities for private investors, but is equally concerned with establishing the correct combination of market and regulatory factors that allows investors to earn profits whilst delivering public-sector objectives.

Examples: evaluating potential CDM projects in India

Preparatory studies in evaluating potential CDM projects can help to identify prospects and opportunities. As an example, the World Resources Institute (WRI, 1999) has made an assessment of potential CDM projects in Brazil, China and India, in order to review how they might advance both CO2 emission reductions and sustainable development.

For India, over 20 projects including new technologies for conventional power generation and applications of renewable were examined. All projects broadly advance sustainable development, with benefits ranging from rural electrification and employment opportunities to improvements in productive efficiency. A set of criteria for evaluating sustainable development benefits against India's development objectives was used and each project was scored against these criteria, which were weighted to reflect the importance of different benefits as determined by polling of researchers and government officials.

The results of this exercise are listed in 4.2. WRI found that projects advanced under the CDM would make a significant contribution to India's own development goals.

Table 4.2: Evaluation of potential CDM projects in India


Abatement cost
(US$/tC abated or removed)

Rank by abatement cost

Rank by overall development benefits

Conventional power generation

Bagasse-based co-generation




Combined cycle generation (natural gas)




Atmospheric fluidized bed combustion




Pressurized fluidized bed combustion




Pulverized coal super-critical boilers




Integrated gasification combined cycle




Renewables for power generation

Small hydro




Biomass power




Wind farm








Renewables for agriculture

Wood-waste gasifier




Agro-waste gasifier




Wind pump (shallow)




Wind pump (deep)




PV pump




Of the abatement opportunities reviewed by WRI, there was considerable overlap between projects that offer low-cost CO2 reductions and projects consistent with India's development priorities. Whilst projects in different sectors should not be compared, renewable energy systems potentially have a large role to play in assisting both CO2 emissions abatement and sustainable development. Their importance will be dependent on the procedures agreed for the CDM. Furthermore, assessment of CDM opportunities by national governments and private sector investors will require:

4.5 The Role of Bioenergy in Climate Change Mitigation

Bioenergy has played an important part in rural development, but its contribution to an enhanced role in the wider issue of climate change mitigation has not been fully examined in policy formation. Exploitation and commercialization of biomass through modern technologies offers significant cost-effective opportunities for meeting emissions reduction targets while providing additional economic and social benefits. Bioenergy provides a sustainable use of accumulated carbon and acts as a substitute for the use of fossil fuels25.

All forms of biomass utilization can be considered part of a closed carbon cycle. Biomass utilization through the substitution of fossil fuels will reduce CO2 emissions, and a combination of biomass with carbon sink options can provide a viable route to climate change mitigation. Consideration of forestation, soil carbon storage and other sink options is beyond the scope of this report, but, as already noted, other work by FAO is being carried out in these topics26.

The analyses presented in Chapters 2 and 3 suggest that bioenergy can contribute to sustainable development in developing countries, provided that a number of key issues related to the practical exploitation of this resource are carefully considered. Biomass sources are more spatially dispersed than fossil fuels, and whereas dispersion tends to increase harvest and transport costs, modern biomass technologies have the potential for generating employment and assisting economic growth in rural areas. Current bioenergy sources are mainly forest and agriculture residues, but in the future dedicated energy plantations could provide additional sources, opening up new opportunities for agriculture and forestry in the energy market.

The world-wide potential for energy supply from energy crops, and the specific use of biomass need to be further examined. There are many complex issues in shifting from petro-chemical feed-stocks; for example, the possible conflict with competition for food crops; the economics of bio-energy resource exploitation; and the availability of land for energy crops. In addition, the role of agronomy in matching species to the objectives of growing energy products and to specific local conditions should be examined (Woods and Hall, 1994). For example, there are opportunities for adapting plant species for production of both food and energy crops in drier zones, where 80% of the world's poor live.

Plant matter is associated with three basic crops: cellulosic crops, such as wood and cotton; starch crops (such as corn) and oil crops (such as soybeans). Large-scale displacement of petroleum fuels will rely primarily on low-cost cellulosic feed-stocks, whilst starch crops may play more of a transitional role. Such biomass sources have the potential for renewable energy production. IPCC estimated that biofuel production on 10-15% of the land area currently in agricultural use could substitute for about 784 MtC/year of fossil fuel carbon (US DOE, 1999).

In practice, estimating the potential of biomass to offset CO2 emissions is complex because of the many variables involved such as crop productivity, energy conversion efficiencies and substitution factors. A simplified approach is to use the product of (cropland area)x(crop yield) as the main factor in determining carbon offset potential. This calculation should then be scaled by an energy substitution factor to account for conversion efficiencies. Based on this approach, estimates of CO2 mitigation using bioenergy as a direct substitute for fossil fuels can be made. These are achieved by estimating increases in the land area dedicated to biomass production, the extent of better use of agro-forestry residues, and increased efficiency of biomass conversion processes and integrated food-energy production.

Table 4.3 lists a set of recent estimates of the biomass potential for CO2 mitigation (FAO/Netherlands, 1999). These indicate that energy forestry/crops and crop residues have the potential to reduce emissions of between 500-1600 MtC/year, equivalent to between 8-27% of the current global consumption of fossil fuels. They are broadly comparable with the IPCC estimates. However, these estimates are only for the technically achievable potential, and do not take account of real-world conditions such as market factors that might influence the up-take of biomass technologies for energy supply. Nor do they take account of any policy or institutional constraints that might reduce the opportunities for carbon offsets.

Table 4.3: Potential CO2 mitigation via fossil carbon offsets using biomass


Land area (Mha)

Net C yield (tC/ha/year)

Net C offset (Mt/year)

Energy substitution efficiency

C emissions reduction (MtC/year)

Dedicated energy crops: temperate areas






Dedicated energy crops: tropical areas






Temperate shelter-belts






Tropical agro-forestry






Crop residues










Bioenergy should not be regarded as the only means by which agricultural and energy problems can be solved in rural areas; rather it is an option that can provide some benefits in improving agricultural productivity, giving a renewable source of energy supply and helping to deliver a sustainable environment. Its overall contribution depends on a number of inter-related economic, technical, social and environmental factors. The multifunctional character of agriculture and land should, in fact, receive greater recognition so that effective policies and opportunities can be developed to tackle these rural energy problems.

4.6 Exploiting the Potential of Biomass

Biomass offers many potential advantages as an energy supply option; equally there are barriers to be overcome before the full potential can be realised. The balance between advantages and disadvantages is important to assess, and Table 4.4 sets out these features. It is clear that there remain uncertainties about whether and how bioenergy can be developed and commercialized. Large-scale production would require dedicated energy crop plantations, and the cost-effectiveness in any particular investment situation is likely to depend on site-specific opportunities. However, the CO2 mitigation opportunity may tip the balance in favour of biomass investments if they are regarded as being of global importance, especially if GEF funding, or an appropriate value for CERs obtained through the Clean Development Mechanism, can be used to support the investment costs. These issues, and the steps required to take forward the development of the links between energy and agriculture, are considered further in Chapter 5.

Table 4.4: Exploiting the Potential of Biomass



  • Biomass is a stored fuel, and can provide a demand responsive supply of energy.
  • Present-day biomass technology has a poor cost-effectiveness compared with most conventional energy supply options.
  • Biomass is a flexible fuel feedstock, which can be converted into convenient secondary forms, namely solid, liquid or gaseous fuels.
  • The ownership of modern biomass technology is largely in industrialized countries, and would require technology transfer for its exploitation in developing countries.
  • Biomass is a carbon neutral energy source, renewable over a relatively short time-frame
  • The long-term effects of biomass exploitation, through dedicated energy crop plantations, on soil quality, fertility and biodiversity may be adverse.
  • Fuel production, collection and supply are labour intensive, which can be an attractive social benefit in rural areas
  • Biomass plantations may come into conflict with other land uses in competition for high quality land
  • When developed as part of an integrated approach to wasteland restoration and rural economic development, biomass offers additional environmental, social and economic benefits in rural areas.
  • A fuel supply chain and a ready market for energy output, with robust and secure contracts must be in place.

24 FAO is currently examining agriculture's contribution to carbon sequestration, including issues relating to forestry, land-use changes, and biodiversity. This report does not aim to address these important aspects of climate change mitigation, such as carbon storage in forestry or carbon soil sequestration.

25 Work on the role of biomass in climate change mitigation is being coordinated at IEA Bioenergy by Task 25 "Greenhouse gas balances of bioenergy systems".

26 FAO's current work on carbon sinks and related studies can also be found on the web site <>.

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