FOOD, GLORIOUS FOOD - A CASE OF ENVIRONMENTAL INDIGESTION?

 By Peter Jones, Ecolateral

In terms of mass, global warming potential (GWP) and ethical issues, the food supply chain impacts on our species’ lives as much as it did 4000 years ago, but in today’s world the economic impact in terms of financial and time cost have been subjugated to the benefits of scale economies and scientific approaches to yield improvement. With a global population three times the level it was at the time when today’s retirees were born, mass of demand is once more becoming an issue ,not due to Malthusian fears on the supply side but, rather, due to demands for improved supply and output side resource efficiency, not least in terms of global warming potential.

In the UK the demand for variety, freshness, quality and nutritional value unconstrained by the vagaries of the seasons creates the need to pioneer innovative approaches in terms of material flow mapping, carbon equivalence policy development, technologically-led process change upstream as well as downstream, coupled to a reappraisal of attitudinal issues of consumer behaviour. While, at around 74 million per annum, absolute demand growth is a driver, it is the additional 300 million additional global bourgeoisie each year with requirements for sophisticated packaging, chilling and freezing that really has far greater significance. This discussion document explores some of those possibilities.

The UK Food Sector

UK consumption of food amounts to around 30 million tonnes of dry food, alcohols and chilled goods each year- or 50% of total physical economic consumption at the household level each year. This comprises 4.4 m tonnes of meat, 1 m tonnes of fats and oils, 4.3 m tonnes of fruit and vegetables, 0.6 m tonnes of fish, 9.6 m tonnes of dairy all conveyed in around 2.5 m tonnes of assorted packaging. Each of these categories possess markedly differing “ecological rucksacks” however - with beef topping the list with an input – output ratio of around 10 compared to chickens, where 1 kg of meat derives from 1.3 tonnes of feed. Recent studies suggest the water burdens are far higher….a critical issue in certain growing regions. One burger is claimed to require 2.4 tonnes of water inputs.

In overall terms the UK supply chain for food is estimated to impact to the tune of 6.2 million tonnes of water. The FDF is aiming for a 20% reduction in water use by 2020. The carbon footprint continues to remain elusive with the different sectors (confectionery, bread, alcohol,fish etc) all struggling to achieve consensus on common systems of assessment. In David McKay’s seminal study www.withouthotair.com) the estimate is that whilst the average UK person requires 372 Mjoules weekly the logistics impact of delivering that consumption is of the order of 372 Mj per person. At 16% of total global energy loading the effect of the switch to meat from lower impact vegetable diets starts to become apparent.

Food processing in financial terms lies at the heart of much British technological innovation and investment. Total sales run at £80 billion annually, £20bn of Gross Value Added, 12% of employment and 8000 businesses. In terms of sales value the food sector is about the same size as the total energy market- £120 billion or 8% of GDP. Sales value at the checkout is around £3600 per tonne or £4500 per household.
Direct energy demand for heating, cooling, transport contributes 63 million tes of carbon dioxide each year. Recent evidence confirms the exposure of the sector to shifts in energy prices, the impact of weather patterns (grain) and the emergent economy demand shifts (sugar). At these levels any leap in the rate of the cost of carbon is containable and is in accord with the estimates by Nick Stern that inflationary pressures of carbon accounting are of the order of 1% = 2% if action is taken early. More important to the economics are questions of GWP supply side impacts (witness Russian wheat) or scarcity of growing capacity (witness takeover bids in the fertiliser sector). Clearly the Food and Drink Federation is already on the case. One can but hope for a convergence of effort by all the interested parties – notably the Food Knowledge Transfer Network, the Resources KTN, Incpen, the Courtauld commitment participants, FDF, BRC, NCC, WRAP et al.

……..but there are other issues –

Most notably the sector is taking on board the ethical dimension pioneered by the Food Ethics Council , both intra UK with regard to nutrition, obesity and access as well as internationally in terms of market pricing, transparency and reward mechanisms.

These issues are but a preamble to the sizeable “low hanging fruit” available from the abatement of wastage in commercial and domestic streams. An integrated suite of strategies can deliver a “triple whammy” in terms of lowered Global Warming Potential, improved food security and costs. The numbers are well rehearsed thanks to WRAP and others. 8.3 million tonnes are discarded by households plus a further 3.5 million tonnes in the processing stages plus around 4.5 m tonnes on farms. The data represent the culmination of a path from the original Biffaward food Massbalance by C-Tech in 2004 , via the East Midlands study from the Food Faraday in 2008 funded by EMDA , work by the NNFCC and the FDF. Given the reliability of these data there is now an opportunity to institutionalise the process into a real time data capture system administered by the Environment Agency or others.

Unlike many product areas, the concept of Producer Responsibilty for end consumer waste will not work for food. As a consequence, end of life treatment options will be underpinned by a three pronged approach.

First - landfill taxes and bans have driven this “scrap” carbon toward non- specific technology options. Second, end markets in the form of recyclates, fertiliser substitutes and energy (as electricity, gas, hydrogen, CHP, transport fuels etc ) will themselves become more valuable as fossil carbon (on which they depend) becomes scarce). Third, Traded Pollution Permits will acquire greater value to initiate shifts to lower CO2 profile reuse.

TAXES AND BANS

At 2013 levels for Landfill Tax of £80, the gate fee ceiling for competing technologies is well and truly in place. Bans are the ideal, but any undergraduate economist will tell you that percentage diversion rates are simply irrelevant - operators using the high cost route go out of business, and at those levels landfill is, effectively, totally marginalised. Whilst data on food inputs to landfill is not kept, overall tonnages of “high rated” bioactive inputs have dropped from c60 million tonnes annually to 24 m tonnes. This is attributable to the emergence of composting and anaerobic digestion alternatives between 2005 and 2011.

EXIT MARKETS

Whether we are at Peak Oil or not, as the price of energy rises, coupled to increased energy demand, the switch to energy from waste to compete with coal, nuclear and gas will be triggered. The former is saddled by Traded Permit costs in the form of the Carbon Reduction Commitment, the second by serious investment and aftercare costs, whilst the third will need an uplift in the electricity price to cover higher investment costs per Mw utilising gas fired CHP. Internationally binding commitments to achieve 15% of UK energy supply from renewables by 2020 (with escalating targets after that) also underpin the attractiveness of waste food as a fossil energy substitute. In reality the stasis implied in the rate of change or turnover of the UK car and housing stock means that much of that substitution will be associated with the electricity market where 35% of supply will need to be renewably based.

Recycling, composting and renewable energy are all options, but it is energy which will offer the biggest revenue per Gigajoule – albeit at the highest financial cost of sunk capital, operating costs and maintenance costs. Assessment of these choices by investors remains clouded by the continuing absence of any uniform and academically peer reviewed approach to carbon footprinting of those process technologies although DEFRA have now taken substantial steps to remedy the gap. The importance of such evaluations is simply that investors don’t wish to pursue attractive low internality priced technologies with high CO2 burdens when common sense says that by 2020 there may be a carbon taxation regime in place. Thus externality burdens will form a significant element of risk to bottom line performance in the form of Traded Carbon Certificates etc when the investment cycle in energy conversion plants is predicated on lifetimes stretching beyond 2030. We are in the midst of that process now in the waste sector. Whilst revenue per gigajoule is the driver the route is defined by the whole life waste footprint from collection to point of sale. Only around 15% of the latter is associated with trucks, and “fuel” preparation, with the balance in the energy conversion technology. It is for this reason that high energy conversion efficiency CHP systems will maximise margins and impart three important benefits - highest level of operational energetic conversion efficiency, highest income per gigajoule of sold outputs and the lowest exposure to carbon allowances purchases or taxes. Thereby operators who fulfil these three basic tests will have the greatest ability to charge a lower gate fee (possibly positive) for the waste food inputs in an effort to secure feedstock inputs.

One tonne of food can generate 90 M3 of methane, equivalent to 225 Kwe and 110 kg of fossil CO2 emissions.
There are other additional operational prerequisites -.

First the locational strategy needs to be immediately accessible, co-located with existing users of significant fossil sourced energy in order to reduce distributional losses and provide attractive supply security to those on interruptable energy supply tariffs. It was with this in mind that the West Midlands RDA / Advantage West Midlands (now disbanded) sponsored the creation of a locational interrogation tool (now in the hands of WRAP). Second, the emissions profile of the newer “advanced” technologies needs to be understood and agreed with the Regulator. Thus large scale CHP Incinerators are at risk because islands of 12-20 Mw of heat from 400,000 behemoths just don’t exist in sufficient abundance. Anaerobic digesters are CO2 intensive - better than landfill but not as good as gasifiers - unless they are built on a very large scale at points of large agricultural waste production sited convenient for gas to mains injection. Using AD to produce 16% by mass of input matter as gas and then reduce it to 10% via an internal combustion generator and then to 8% by mass once it arrives at the end user post centralised network losses is not as efficient as gasifiers doing the same at levels of 60% as available energy at the point of demand next door to a 3 MwE user such as a cold store, regional distribution centre or processing plant. Gasifiers operate in air starved atmospheres at 350 degrees up to 2000 degrees. Progressing this temperature and dwell time spectrum produces a “syngas” comprising methane/carbon dioxide at the lower ranges moving to ce hydrogen and storable carbon monoxide at the upper end. As little as 7000 tonnes of food will release1 Mwe /8500 MwH in these advanced processes - over 5 times that in an AD system. The mechanics of these numbers have yet to be underpinned by installations in the UK and scientific examination, but there is sufficient international experience and plants are in build in the UK.

As the recent study by Muhle, Balsam and Cheeseman demonstrates, the UK emits 5 times the level of CO2 per tonne of MSW handled than Germany ( 175 g vs 34 kg CO2 equivalent) so the opportunity exists for the UK to innovate as a late developer.

THE BROADER CANVAS
Government has a real role to play in terms of ……
i) accelerating the UK toward a single regime of carbon accounting standards (qv)
ii) ensuring that the unscientific system of half ROCs ,double ROCs, FITs, CRCs and EUTs is rationalised around a peer reviewed consistent framework and integrated into the carbon credit certification system. The current experience is quite the opposite. We have a combination proposed in the DECC Energy Review of technology specific obligation certificates, feed in tariffs and contracts for difference. This approach designed to favour particular technology outcomes is unsound, irrational and tends to destabilise potential investor interest or confidence. Coupled with miscalculations on the elasticities of demand in response to these incentives has resulted in several emergency cutting off of bandings in solar and wind with the effect that investment plummets.
iii) developing new energy capacity in locations where distributional infrastructure is strained already in terms of wires and pipes is another role of Government. OFGEM is committing to extension or expansion of centralised grids and judiciously placed 3-8Mw decentralised renewable energy plants in supply deficit regions could release line capacity far more cheaply.
iv) ensuring the planning profession is armed for public consultation and transparency by the National adoption of the AWM Planning Tool
v) utilising round tables with the water sector and regulator to footprint the operational risks-opportunities of co-located commercial waste food co-digestion in sewerage installations. This has been given a green light by OFWAT and despite a referral to the Office of Fair Trading on competition grounds the idea is now up for development by a multi- departmental review in early 2012.
vi) looking at the opportunities for altering price signals around carbon intensive foods in the form of differential CRC strategies (thereby encouraging the location of renewable food energy plants around meat and food processing plants perhaps?)
vii) encouraging community low food miles production of vegetables and fruit or community AD plants via the Local Economic Partnership strategies. This forms part of the Localism Agenda spearheaded by DCLG.
viii) junking sell by dates and adopting all the other WRAP suggestions in relation to the confusing terminology around domestic food storage and consumption hygiene issues.
ix) realising that distinctions between renewable CO2 and fossil CO2 are an irrelevance and that what counts are conversion efficiencies over the whole system from field to fork to renewable recovered output.

In sectoral terms food for consumption also competes with the food to energy market. German studies suggest that 1 hectare of rapeseed or wheat would generate biofuels for 30 km of car travel against 70 km from an equivalent area of maize via the methane route.