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Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
Abstract:
Rising energy prices for fossil fuels, the unreliable supply of energy imports during recent winters, and
European Union (EU) policies have stimulated national awareness and political action on renewable bio-energy
among all of the European countries. In discussions on agricultural policy, renewable energy has been advocated
as a way to more rural prosperity. In this paper, we assess whether there is any impact on agricultural and rural
employment and income as anticipated. Among the new member states (NMS) of the EU, the share of bio-energy
is slowly increasing. Yet among the Balkan states and Turkey this process has just started. In both sub-regions an
expansion of rape seed cultivation, and to a smaller extent of the production of wood pellets, could be observed.
Similarly, the build-up of processing facilities is in its infancy. Up to now, however, its overall impact on
agricultural and rural income and employment seems to have been marginal.
Keywords: bio-energy, agricultural development, rural development, Central, Eastern and Southern Europe
JEL: Q10, Q28, Q42, R11
DOI: 10.2478/v10033-011-0011-1
1. Introduction
Since the earliest history of mankind, people have
relied on bio- and renewable energy to facilitate life.
People made use of wood and, later on, of wind and
water. However, in our times, the interest in renewable
energy became more serious when the limits and
environmental risks of fossil and nuclear energy became
evident. Renewable energy was advertised not only as a
way out of the limitations of fossil and nuclear energy,
but also as a driver of rural prosperity, particularly for
European farmers.
In our analysis we follow the definition of EUROSTAT,
which defines renewable energy as the sum of specific
forms of energies, i.e. hydropower, wind energy, solar
energy, biomass and wastes and geothermal energy.
Biomass and wastes cover organic, non-fossil material of
biological origin that may be used for heat production,
electricity generation and/or as a source of fuel. They
comprise wood and wood waste, biogas, municipal solid
waste and biofuels. Liquid biofuels mainly cover
November 2011
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Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
40%
35%
30%
25%
20%
15%
10%
5%
0%
LVA
BIH
MON
ALB
EST
ROM
KOS
SVN
TUR
LTU
SER
MAC
CRO
SVK
CZE
HUN
POL
BUL
CYP
MLT
EST
KOS
POL
LTU
CZE
HUN
LVA
BUL
ROM
BIH
SVN
SVK
MAC
TUR
CRO
ALB
MLT
SER
MON
CYP
0%
SEE Journal
Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
99
Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
2000
10
2007
0
6,900
28,800
437,000
325,000
n.a.
121,838
122
9,500
68,000
124,800
99,200
73,600
797,000
338,000
153,831
223,579
5,358
54,000
87,700*
10,000
82
6,300
0
13,000
10,700
12,900
1,578
SEE Journal
Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
2000
2007
270,000
287,000*
547,000
461,000
377,000**
350,000
102,000
68,000
20,000***
20,900*
2,000
3,200*
41,000
22,000
just started
just started
grown for the time being stress the fact that energy crop
production might be a potential source of income only
for large-scale farmers. A certain minimum size for
cultivating these crops (in terms of area and economic
size) seems to be necessary. As, in general, small scale
farmers in the study region are reluctant to collaborate in
order to increase economies of scale and their bargaining
power, they are also not acceptable as input providers by
(potential) biogas and biofuel producers. The country
reports just mention two cases that tried to overcome this
disadvantage: (1) In Latvia one cooperative was
established in 2000 promoting rape seed production. It
also invested in a biodiesel production plant that became
operational in 2009. (2) In Croatia, a rape seed producer
association has been recently established. However, in
both cases no additional information has been provided.
Similarly, in many countries of the study region large
shares of forestry land are owned by farmers and other
private individuals. Their plots, in general, are quite small.
Hence, it is doubtful that they can provide sufficient
wood for pellet and briquette production in an
economically viable manner.
At this stage, it can be concluded that, although the
data available is quite limited, the expansion of bioenergy production has had a very modest impact on the
agricultural and forestry sectors. The only measurable
change is the expansion of the cultivated area of rape
seed and the expansion of wood pellet and briquette
production. The area under other (potential) energy crops
did not change much during recent years. Similarly, in
many countries the area under fast growing trees has
been expanded, albeit from a very low level, and
statistical data has not been available.
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11
Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
Biogas
plants, total
Biogas plants,
managed by
farmers
12
SEE Journal
Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
No. of companies
Production (t)
Share in diesel
3
6
15
17
n.a.
2
3
2
1
20
n.a.
26,000
9,000
47,500
61,000
46,000
7,000
11,000
1,000
1,000
9,000
36,000
4.5
0.2
0.2
0.7
2.4
0.1
1.2
1.2
2.2
3.7
0.1
-
2
1
1
n.a.
25,000
n.a.
0.2
0.5
1.7
0.0
Remarks
exports
all imported
mostly exports
50% exported
imports
imports
imports
Source: Country Reports 2009; production figures for NMS: European Biodiesel Board (2009)
Note: n.a. = not available
Table 4: Production and share of biodiesel, 2007
13
13
Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
High (4-5)
Employment
NMS
TUR (4)
Income
Balkan-st. +
Turkey
NMS
Balkan-st. +
Turkey
LVA (4)
Somewhat (2-3)
EST (3), HUN (3), SVN (3), POL
(2), CZE (2)
SER (3), BIH (3)
None (0-1)
LVA (1), MLT (1), CYP (1),
BUL (1), ROM (1)
CRO (0), ALB (0)
High (4-5)
Employment
(non-farm)
Income (non-farm)
NMS
EST (5)
Balkan-st. +
Turkey
NMS
Balkan-st. +
Turkey
Somewhat (2-3)
LVA (3), CZE (3), HUN (3),
POL (2), SVN (2), MLT (2),
CYP (2), BUL (2), ROM (2)
ALB (3), SER (2)
None (0-1)
CRO (0)
CRO (0)
SEE Journal
Bio-eenergy and Rural Devvelopment: Findingss from a Comparativee Study in Central, Eaastern and Southern Europe
production
p
in specific or ren
newable energ
gy production in
general
g
will stop the rurral-urban mig
gration patterrn
observed
o
all ovver the region..
Finally, based on the modest statisstical data an
nd
expert
e
assesssments, it caan be conclu
uded that th
he
cultivation
c
of energy
e
crops in general and of rape seed in
particular
p
will, in generral, create only marginal
employment
e
a
and
income eeffects for mo
ost (small scale
e)
farmers
f
in the
e region. If theere are any at all, they will be
b
modest
m
and will
w not reducce the outmigration rate of
o
farmers.
f
Incom
me effects seeem to be ob
bserved amon
ng
larger-scale
l
farmers. This is reflected by the
t observatio
on
that,
t
if farmerss do engage in
n biomass prod
duction they arre
typically
t
largerr ones.
4.
4 Conclusion
ns and Recom
mmendation
ns
Modern fo
orms of bio-eenergy are ju
ust starting to
t
become
b
a sou
urce of energy supply among the countrie
es
in
i Central, Eastern and Southern Europe. In
I general, the
eir
share
s
amountt to less than 0.1 percent of total energ
gy
demand.
d
In Ce
entral Europe alone it stand
ds at about 0.5
percent.
p
But th
he promotion of bio-energyy as one form of
o
renewable
r
ene
ergy has beco
ome a top poliitical priority all
a
over
o
Europe. All
A EU member states, includ
ding NMS, havve
adopted
a
natio
onal targets aim
ming at expanding the share
es
of
o renewable energy.
e
Some countries amo
ong the secon
nd
group
g
of the study
s
region h
have started to do the same.
These
T
targetss have to bee met by 20
010 and 2020,
respectively.
r
Since bio-en
nergy and otther forms of
o
renewable
r
en
nergy at this stage of de
evelopment arre
economically
e
n competitivve with fossil fu
not
uels, the EU an
nd
most
m
national governments in the region are prepared to
t
provide
p
financial incentivees for their promotion.
p
Bio
oenergy
e
makess up a significant share of total
t
renewable
energy
e
and a further exxpansion is envisaged.
e
Th
he
expansion
e
of bio-energy
b
seeems to depend
d on three majo
or
factors:
f
The political will to desiignate financiaal resources fo
or
oduction of bio
o-energy (i.e. fo
or
the promottion of the pro
electricity, heat and/or fuel productio
on) is almost a
on since bio
o-energy prod
duction is no
ot
preconditio
economicaally competitivee yet. Without state subsidie
es,
mandatoryy blending requirements and/or hig
gh
politically-induced feed
d-in prices, the productio
on
n a pilot stage only and playy no role at all in
would be in
meeting to
otal energy dem
mand. Owing to co-financing,
a large parrt of that burd
den is taken over
o
by the EU
E
with respe
ect to the NMSS, but neverth
heless a certain
November
N
2011
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Bio-energy and Rural Development: Findings from a Comparative Study in Central, Eastern and Southern Europe
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