European farmers, agriculture investors and biofuel producers are waiting for clearer direction from EU policy regarding the development of intermediate — or cover — crops as biofuels feedstocks, delegates at the Argus Agriculture and Feedstocks conference in Brussels heard on Friday.
Intermediate crops are widely grown within farmers' crop rotations, to benefit soil nutrient levels and fertility. But EU policy, including the Renewable Energy Directive (RED), has seen market participants across the agriculture and energy value chains consider the role of intermediate oilseed crops in biofuel production.
Farmers are likely to eye any incentives for the harvesting of intermediate crops. Price signals will need to firm for growers to move towards producing and harvesting intermediate crops at scale, given the elevated field work costs required. But with values of biofuel feedstocks from crops such as carinata and camelina largely hinging on prices for competing feedstocks — primarily used cooking oil (UCO) — farmers may not see enough price incentive for large-scale intermediate crop production, market participants said. Mandates on volumes of crop-based biofuels, particularly in sustainable aviation fuel (SAF), could support bids for intermediate oilseeds, incentivising their production, delegates said.
Major energy producers including BP and Spanish firm Repsol have already made investments exploring the use of cover crops for biofuels. But classifications for intermediate crops as feedstocks remain largely undefined, according to market participants.
The RED outlines major requirements for intermediate crop classification, which include ensuring that crops maintain soil's organic matter content, do not require any additional land usage, and are grown in areas where primary crops are limited to one harvest. But this has left considerable scope for interpretation. EU member countries are required to transpose the RED into each member state's law by 21 May, which could offer more clarity to producers, crushers and traders, delegates said.
