Biofuel co-products as livestock feed - Opportunities and challenges

2Biofuel co-products as livestock feed – Opportunities and challengesMAIN MESSAGES• Biofuels policies, along with changing energy marketfundamentals, have contributed to a significantincrease in global biofuel production in recent years.• The two primary biofuels produced globally today –ethanol and biodiesel – are predominantly derivedfrom agricultural commodities, such as grain, sugarand oilseeds.• The increased use of agricultural commodities for biofuelis generally expected to contribute to marginallyhigher feed prices for livestock and poultry producers,though the impacts are shown by the literature to bemodest in nature.• Increased substitution of co-products for traditionalfeedstuffs in feed rations helps mitigate potentialinput cost increases faced by livestock and poultryproducers.• Increased agricultural productivity and output hasensured that the global supply of crops available fornon-biofuel uses has continued to grow over the longterm.• Growth in the use of agricultural commodities forbiofuel production is expected to continue in the next10 years, but growth rates are expected to slow in keyproducing countries as government-imposed limitson grain use for biofuels are reached and new nonagriculturalfeedstocks are commercialized.tax exemptions to encourage biofuels use. Additionally,a 2003 European Commission (EC) directive called formember states to ensure biofuels represented 2 percentof petrol and diesel fuel consumption by 2005 and5.75 percent by 2010. A 2009 EC directive establishedthat 10 percent of energy used for transportation in theEuropean Community by 2020 must derive from renewablesources, such as biofuels. Many other countries,including Canada, China, India, Japan and South Africa,have in recent years enacted blending requirements orother policies supporting biofuels production and use(Nylund et al., 2008).Energy market factorsWhile government policy has played an important role instimulating growth in global biofuels production and consumption,demand for biofuels also has been acceleratedby global economic and energy market forces. DecliningFIGURE 12001–2009 global biofuels production by nation or region100 00090 00080 00070 000Thousand Litres60 00050 00040 00030 00020 00010 00002001 2002 2003 2004 2005 2006 2007 2008 2009Rest of WorldArgentinaCanadaChinaEuropeBrazilUnited StatesSource: U.S. EIA, 2010