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Monitoring adoption of climatetechnologies in the agrifood sector
GBEP Bioenergy Week
Budapest
22 June 2016
Investment opportunities for GHG
emissions reduction in Morocco
FAO/EBRD collaboration on promotinggreen 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 methodologyIdentify 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 analyticalprinciples can be:
o a quick assessment
o in-depth study
▸ Mitigation vs Adaptation?
▸ Land use?
Step 1 – Sources of GHG emissions
Step 1 – GHG Emitting ActivitiesAnalysis 1 of 3 - ‘Agrifood’ Emissions (including energy)
Countries of the region
(Tunisia, Algeria, Libya)
Total:
23.4
MtCO2eq
Year 2012FAOSTAT + 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 other countries in the Maghreb), particularly those related to manuremanagement.
GHG emissions from energyconsumption and crop residues are alsoimportant
Step 1 – GHG Emitting ActivitiesAnalysis 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 ActivitiesAnalysis 3 of 3 – Emissions Intensity
Based on
FAOSTAT, 2015
in accordance
with the 2006
IPCC guidelines
Step 1 – GHG Emitting ActivitiesResults
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 emissionsfrom bovine animals is high
The portion of emissions from the application of synthetic fertilizerssimilar to other countries in the region (5%) and is declining (-14%). However, fertilizer use is on the rise
Selected technologies
• The methodology could consider othertechnologies 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 technicalpotential
Financial attractiveness
Mitigation cost
Data availability
Step 2 – Techno-Economic EvaluationExamples
Criteria * ** ***Current technology adoption rate
Technology market penetration or adoption of the practice is high, leaving little space for improvement.
The market for the technology or 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 of 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 official national or international data sources and not always easily disaggregated to the required level of detail.
Step 2 - Techno-Economic EvaluationConservation 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 itspotential 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 littleinformation on costs of equipment and performance
Step 2 – Techno-Economic EvaluationResults
Technologies
Evaluation technique Evaluation du marché Evaluation économiqueDisponibilité
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 EvaluationResults
Step 2 – Techno-Economic EvaluationMitigation 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
Mit
igat
ion
Co
st (
USD
/tC
O2
eq
)
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 EvaluationWith other financial and technical criteria
Lo
we
r M
itig
ati
on
co
st
(US
D/t
on
CO
2e
q)
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 pumpsLivestock 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 sustainabilityissues
Step 3 - Evaluating sustainability issues
Conservation Agriculture
• Positive impact throughreduction of surface runoff
• In the absence of rotations there ispotential for groundwatercontamination due to increased use of herbicide and fertilizers
Water Energy Food Security Others/Social
Importance for adaptation to CC HIGH
• Positive impact throughreduction in aggregatediesel consumption
• Positive impact on long term soil fertility
• Reduced yield volatilitydue to improved resultsunder droughtconditions
• Less time spent in soilwork and shorter delay in optimal sowing time
• More skilled workers maybe needed to operatedirect seeders and theymay not be locallyavailable
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
off
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 BarriersConservation Agriculture
BARRIERS Risks
Knowledge and
information
Organization/so
cial
Regulations/
Institutions
Support
services/
structures
Financial
returns
Access /cost of
capital
Lack of farmerknowledgeabout the technology isa major issue in Morocco
Also amongearly adoptersappropriateknowledge on technologyuse is a problem and can influence initial resultsand sustainability
Direct seederrental marketsor alternativelyfarmersorganized to shareequipmentwould help adoption
Organizationand social practices linked to livestockproduction do not favourmaintainingcrop cover
N/R Repair shops exist for conventionalequipmentand can beadapted but still not able to service direct seedersadequately
Direct seedersimportedfrom abroadare heavy and not adaptedto most local tractors
Financiallyattractive
Cash flow profile in first years can beproblematicdepending on farmerknowledge
Rotations maynot beincorporatedby farmersdue to pricesignals and value chaindevelopmentconstraints
Upfrontinvestmentcost is high
Access to credit for poorerfarmers canbeproblematic
Possible increase in the use of herbicides in the short term canpotentiallyhave a negativeimpact on water quality
Low-hanging fruits
Results
BIOGAS FROM MANURE AND
AGRI-RESIDUES
SMALL DAMS
LIVESTOCK DAIRY BREEDS ON
IMPROVED DIETSGRAZING
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
▸ 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
o Support to Moroccan Govt counterparts:
NDCs
Strategie Sobre en Carbone
GCF proposals?
o 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
[email protected]@fao.org