technologies in the agrifood sector Investment opportunities for GHG - - PowerPoint PPT Presentation

Monitoring adoption of climate technologies in the agrifood sector

GBEP Bioenergy Week Budapest 22 June 2016

Investment opportunities for GHG emissions reduction in Morocco

FAO/EBRD collaboration on promoting green food value chains

▸

Promote investment in more efficient use of water, biomass, land, energy in EBRD countries of operation

▸

Key assignments:

• Developing/testing methodology for assessing irrigation investment needs

(Egypt)

• Supporting Public/Private Capacity in Bioenergy/Agriculture Investments

(Turkey, Egypt, Ukraine)

• Water along the food chain study (Turkey, Jordan, Ukraine, Kyrgyzstan)
• Monitoring adoption of key sustainable climate technologies in the agri-food

sector (Global/Morocco)

4 step methodology

Identify the most relevant GHG emission sources in the agri-food chain and ascertain trends Ascertain the maturity of technologies/practices and their costs and potentials Put the stage of technology development into context Assess technical and market aspects Identify key factors hindering market uptake Assess market penetration vis-à- vis policies. Confirm most suitable technologies/practices. Identify any sustainability issues Consider any trade-offs such as within the water/energy/food nexus and adaptation benefits

1

Target agri-food activities that emit most GHGs Identify drivers to support adoption of technologies/practices

2 3 4

Produce marginal abatment cost curves Identify technologies/ practices with significant potential

Key issues to consider

▸ New technologies can be added/removed ▸ From Morocco to Ireland - with the same analytical

principles can be:

• a quick assessment
• in-depth study

▸ Mitigation vs Adaptation? ▸ Land use?

Step 1 – Sources of GHG emissions

Step 1 – GHG Emitting Activities Analysis 1 of 3 - ‘Agrifood’ Emissions (including energy)

Countries of the region (Tunisia, Algeria, Libya)

Total: 23.4 MtCO2eq Year 2012

FAOSTAT + UNSD + NATIONAL GHG EMISSIONS INVENTORY + 3EME COMMUNICATION NATIONALE + IEA FOR ELECTRICITY DATA + OUR ESTIMATIONS FROM THE NATIONAL ACCOUNTS ON GHG EMISSIONS FROM THE FOOD INDUSTRY

FAOSTAT + UNSD

Livestock emissions important(as in

• ther countries in the Maghreb),

particularly those related to manure management. GHG emissions from energy consumption and crop residues are also important

Step 1 – GHG Emitting Activities Analysis 2 of 3 – Recent Trends

The emissions sources that have increased the most in the last several years are:

▸

Energy consumption in the food industry;

▸

Crop residues, manure management and manure applied to soils;

▸

Synthetic fertilizers manufacturing.

Step 1 – GHG Emitting Activities Analysis 3 of 3 – Emissions Intensity

Based on FAOSTAT, 2015 in accordance with the 2006 IPCC guidelines

Step 1 – GHG Emitting Activities Results

MANURE MANAGEMENT MANURE LEFT ON PASTURE ENERGY IN AGRICULTURE ENERGY IN THE FOOD INDUSTRY ENTERIC FERMENTATION SYNTHETIC FERTILIZERS

18% of the total with an increasing trend (+150% since 2000). The intensity of GHG emissions from bovine animals is high ‘Only’ 24% with an upward trend (+18%). It contributes in an important manner to the high intensity of GHG emissions from bovine animals Important part of emissions, similar to other countries in the region, with upward trend until recently, followed by a slight decline Strong upward trend Important part of emissions (25%) as in other countries in the region. Emissions have increased slightly (+10%). Intensity of GHG emissions from bovine animals is high The portion of emissions from the application of synthetic fertilizers similar to other countries in the region (5%) and is declining (-14%). However, fertilizer use is on the rise

Selected technologies

• The methodology could consider other

technologies based on the opportunities available

Step 2 – Techno-Economic Evaluation

Step 2 – Techno-Economic Evaluation

▸

Series of Indicators evaluated through a simple notation system (1 to 3 stars) based on quantitative or qualitative criteria:

• Performance relative to best international practices
• Maturity of technical support services
• Potential to reduce annual GHG emissions
• Adoption rate of the actual technology
• Trends in gap between current technology uptake and technical

potential

• Financial attractiveness
• Mitigation cost
• Data availability

Step 2 – Techno-Economic Evaluation

Examples

Criteria

* ** ***

Current technology adoption rate Technology market penetration

• r adoption of the practice is

high, leaving little space for improvement. The market for the technology

• r adoption of the practice is

mature but there is still space for marginal improvements and small increases (possibly with reduced risk and limited profit). The technology is in a growing phase but with market share still much reduced. Few innovators have adopted the practice. Financial attractiveness fIRR<12%, or Pay-back time > 8 years fIRR 12%-20%, or Pay-back time 3-8 years fIRR >20%, or Pay-back time 0-3 years Mitigation cost Positive mitigation cost Between USD 0 and -20 /tCO2- eq avoided < -20 /tCO2-eq avoided Data availability Indicators based on ad-hoc surveys or research: data is collected in the field by inspection of installations, undertaking surveys of equipment suppliers, analysing financial investments, etc. More disaggregated indicators: data is sourced from a number

• f other sources, often of

specialized nature, for example, from organizations that certify boilers or associations that import tractors. High-level indicators: data is normally sourced from statistical offices or other

• fficial national or international

data sources and not always easily disaggregated to the required level of detail.

Step 2 - Techno-Economic Evaluation Conservation Agriculture

Technical Evaluation

Performance compared with international best practice Maturity of technical support services Potential to reduce annual GHG emissions

** ** ***

Economic Evaluation

Financial attractiveness Mitigation cost

*** **

Market Evaluation

Current technology adoption rate Trends in gap between current technology uptake and technical potential

*** **

Data Availability

**

• Not applied in all dimensions therefore a part of its

potential to reduce GHG emissions has not been realised

• Support services for this technology are still limited
• Potentiel of 3M ha: 80 kgCO2eq /ha from fuel

savings +550 kgCO2eq /ha sequestration

• Very weak adoption: >1% of the most conservative

scenario for technical potential

• Financial IRR can be high with subsidies in place,

also highly dependent on the number of seeders per hectare

• Mitigation cost vary between -140 et +45 USD /

tCO2eq

• Good availability of data in these zones but little

information on costs of equipment and performance

Step 2 – Techno-Economic Evaluation Results

Technologies Evaluation technique Evaluation du marché Evaluation économique

Disponibilité des données

Performance compared with international best practice Maturity of technical support services Potential to reduce annual GHG emissions Current technology adoption rate Trends in gap between uptake potential Financial attractiveness Mitigation cost Data availability Conservation agriculture

** ** *** *** *** *** ** **

Efficient field machinery

*** ** * *** *** *** *** *

Drip irrigation

** ** * ** ** *** *** *

Solar/wind power for water pumping

*** ** ** *** ** *** *** *

Grazing management

*** ** ** *** *** * * *

Manure as soil amendment

*** ** ** *** *** * * *

Livestock dairy breeds on improved diets

** ** * ** ** *** *** **

Efficient water boilers

** ** * ** ** ** *** *

Efficient cold storage

*** *** * ** *** *** *** *

Biogas from manure and agri- residues

** * ** *** *** * * **

Renewable energy systems

*** *** ** *** ** * ** **

Small dams

** ** * *** ** * * **

Technical Evaluation Market Evaluation Economic Evaluation

10% 10% 15% 10% 15% 15% 20% 5%

Step 2 – Techno-Economic Evaluation Results

Step 2 – Techno-Economic Evaluation

Mitigation cost and technical GHG mitigation potential

Cumulative technical mitigation potential (MtCO2eq/year)

• 150
• 130
• 110
• 90
• 70
• 50
• 30
• 10

10 30 50

0.1 0.6 1.1 9.9 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5

Mitigation Cost (USD/tCO2eq)

Efficient field machinery Efficient cold storage Solar/wind power for water pumping Livestock dairy breeds on improved diets Drip irrigation Conservation agriculture Renewable energy systems Grazing management Manure as soil amendment Biogas from manure and agri-residues Small dams Efficient water boilers

Step 2 – Techno-Economic Evaluation

With other financial and technical criteria

Lower Mitigation cost (USD/tonCO2eq) Higher Techno-economic efficiency rating

Size of bubbles proportional to mitigation potential (MtCO2eq/year)

Conservation agriculture Renewable energy

Manure as soil amendment

Grazing management

Biogas

Solar/wind water pumps Livestock breeds and diets Drip irrigation

Small dams

Field machinery

Water boilers

Cold storage

• 200.0
• 150.0
• 100.0
• 50.0

0.0 50.0 100.0 1.50 1.60 1.70 1.80 1.90 2.00 2.10 2.20 2.30 2.40

Step 3 – Evaluating sustainability issues

Step 3 - Evaluating sustainability issues

Conservation Agriculture

• Positive impact through

reduction of surface runoff

• In the absence of

rotations there is potential for groundwater contamination due to increased use of herbicide and fertilizers

Water Energy Food Security

Others/Social

Importance for adaptation to CC

HIGH

• Positive impact through

reduction in aggregate diesel consumption

• Positive impact on long

term soil fertility

• Reduced yield volatility

due to improved results under drought conditions

• Less time spent in soil

work and shorter delay in

• ptimal sowing time
• More skilled workers may

be needed to operate direct seeders and they may not be locally available

Step 3 - Evaluating sustainability issues

Results (Steps 2+3)

Step 4 – Barriers and drivers

Step 4 – Analysis of barriers and drivers

Knowledge and information Organization/social Regulations/ Institutions Support services/ structures Financial returns  Information asymmetries;  Lack of awareness about the technology;  Not enough technical expertise to use the technology adequately;  Collective action needed for technology to take

• ff

 Social norms that can hinder adoption  Focuses on private/non- governmental issues  Laws, regulations and other that may prevent adoption  Technology specifications not well defined  Focuses on government/ public domain  Existence of research institutes  Efficiency and coverage of supplier networks  Efficiency and coverage of maintenance companies  Are low returns a barrier and in which cases?  IRR, payback as per step 2

Step 4 – Analysis of Barriers Conservation Agriculture

BARRIERS Risks Knowledge and information Organization/so cial Regulations/ Institutions Support services/ structures Financial returns Access /cost of capital  Lack of farmer knowledge about the technology is a major issue in Morocco  Also among early adopters appropriate knowledge on technology use is a problem and can influence initial results and sustainability  Direct seeder rental markets

• r

alternatively farmers

• rganized to

share equipment would help adoption  Organization and social practices linked to livestock production do not favour maintaining crop cover  N/R  Repair shops exist for conventional equipment and can be adapted but still not able to service direct seeders adequately  Direct seeders imported from abroad are heavy and not adapted to most local tractors  Financially attractive  Cash flow profile in first years can be problematic depending on farmer knowledge  Rotations may not be incorporated by farmers due to price signals and value chain development constraints  Upfront investment cost is high  Access to credit for poorer farmers can be problematic  Possible increase in the use of herbicides in the short term can potentially have a negative impact on water quality

Low-hanging fruits

Results

BIOGAS FROM MANURE AND AGRI-RESIDUES SMALL DAMS LIVESTOCK DAIRY BREEDS ON IMPROVED DIETS GRAZING MANAGEMENT

BEST-BET TECHNOLOGIES SECOND-BEST TECHNOLOGIES THIRD-BEST TECHNOLOGIES

DRIP IRRIGATION MANURE AS SOIL AMENDMENT EFFICIENT WATER BOILERS SOLAR/WIND POWERED WATER PUMPING CONSERVATION AGRICULTURE RENEWABLE ENERGY SYSTEMS EFFICIENT FIELD MACHINERY EFFICIENT COLD STORAGE

Next Steps

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June 2016 – Final draft of the application of the methodology to Morocco

▸

July 2016 – Revise the methodology based on the experience with the Morocco pilot

▸

From July 2016 onwards

• Support to Moroccan Govt counterparts:
• NDCs
• Strategie Sobre en Carbone
• GCF proposals?
• Application of the methodology to other countries

▸

November 2016 – Organisation of a FAO and/or EBRD event at COP22 to present the methodology and the experience of the pilot countries

nuno.santos@fao.org alessandro.flammini@fao.org