Miscanthus NZ

The Business

Background

What is Miscanthus?  The sterile Miscanthus hybrid that is being grown in New Zealand is Miscanthus x giganteus – simply known as MxG or just Miscanthus.  It is a plant that is being grown increasingly throughout the world as a purpose-grown bioenergy crop.  It is a naturally occurring hybrid between M. sinensis and M. sacchariflorus which is indigenous to Japan.  Because it is sterile it has to be propagated vegetatively.

miscanthus-after-senescence

Because MxG has to be reproduced vegetatively, and because it is becoming sought-after for an increasingly wide variety of uses, there is an international shortage of plants.

Miscanthus New Zealand Limited (MNZ) imported its own MxG plants from the UK in 2010, and has been multiplying them since then as quickly as is biologically and financially possible.  There were sufficient plants for trials to be established in 2010, with initial establishment at semi-commercial scale commencing in the spring / summer of 2011.  Numbers have been built rapidly with further planting in subsequent years.

Markets

Boiler fuel

miscanthus-harvesterThe market in New Zealand for the Miscanthus product is developing at the moment.  The bulk market internationally – as feedstock for boilers for producing energy in place of burning coal – is in its infancy in New Zealand and there is only one site that has used Miscanthus for this purpose so far. Their reaction was extremely positive and the fact that it is so dry when it is harvested allows them to mix it with wetter feedstock to get a burning characteristics that is representative of what they would like.

This market will expand as quantities become sufficient to make it worthwhile.  MNZ has carried out some very useful trials in conjunction with a local machinery developer whereby Miscanthus has been pressed into 40 x 40 mm cubes so that it is densified for transport.  This also allows the Miscanthus to be handled by feedstock handling systems that were designed for lumpy coal.  So far there is only been a relatively small quantity of this material produced but the machinery required is becoming available to allow production on a bigger scale.  It is anticipated that this will open up more markets very rapidly.

Bedding

The other traditional market internationally is as bedding for livestock, particularly for horses.  MNZ has entered into a joint-venture agreement with a machinery owner to produce top-quality bedding for racehorses.  The initial trials in 2013 at Waikato Stud and Ballymore Stables were extremely well received.  The stable owners understood that because the Miscanthus did not need turning or replacing for 8 to 12 weeks, the savings in labour are considerable.

Further demonstration trials are underway at other horse establishments so that they can see for themselves the commercial benefits of using Miscanthus.

Production of this bedding is proceeding but studs or stables that want to be supplied in the next twelve months will need to confirm their orders quickly.  There is a limited supply of harvested feedstock material right now and it is unlikely to be increasing significantly until 2016.  However about 10 tonnes per month of top quality bedding is being produced and this will probably be expanded to 15 tonnes per month when a review is carried out in a few months’ time.

MNZ anticipates that with the expansion of dairy cows being housed off the paddock and in sheds for at least part of the time, the demand for bedding in general will be increasing.  Miscanthus has shown itself internationally to be considerably better than any alternatives in this use.  In addition there has been recent information coming from the UK that shows that when dairy cows are housed on Miscanthus bedding, the incidence of mastitis is significantly reduced.  MNZ is investigating the reason for this in case further use can be made of this characteristic of the crop.

miscanthus-harvested

Renewable diesel

Production of renewable diesel based on cellulosic feedstocks will be coming to New Zealand very shortly, with at least two parties seriously interested in investment in this business.  Miscanthus is an almost ideal feedstock for such renewable diesel production and has shown itself to be cost-effective.  This is not only because of its low moisture content when harvested, but also because of its low sulphur levels when compared with many crop alternatives.

MNZ is able to organise the planting of quite large areas of Miscanthus for this use.  This is expected to commence as soon as funding for the first such renewable diesel project is finalised.  MNZ would be interested in talking with anybody who is keen on planting commercial sized areas of Miscanthus – at least 10 ha – to see whether they can be fitted into such a scheme, with a guaranteed long-term off-take agreement for the product that they will produce and a guaranteed price, indexed to inflation.

miscanthus-height-perspectiveThe benefits to New Zealand in replacing imported diesel or imported crude oil to make diesel are obvious, as are benefits in terms of reductions in net carbon dioxide emissions through the use of this very low carbon technology. In fact one of the co-products of the production of renewable diesel using the technology to which MNZ has access, is very high quality biochar.  When used for soil improvement, this means that this carbon is effectively permanently sequestered and as such has the prospect of creating carbon benefits under the New Zealand emissions trading scheme, after it is revised in late 2015.

There are reputedly other benefits from such biochar relating to livestock growth and reductions in ruminant methane emissions.  Thes are currently being formally documented with a plan for them to be verified by follow-up research in New Zealand.  If these proved benefits to be real, the benefits to New Zealand agriculture, the benefits to New Zealand greenhouse gas emissions, and the benefits to the purchasers of farm products will all be clear.

Non-harvest markets

In addition to the markets, Miscanthus has been shown by Lincoln University to perform a very valuable shelter function on centre-pivot irrigated dairy farms in Canterbury, where conventional shelter cannot be provided by tree species because of the irrigation booms.  Lincoln has shown that the shelter effect of Miscanthus on these sites more than makes up for the area taken up by the Miscanthus, so the net farm production can be increased.  It is very likely that Miscanthus shelter on farms in other parts of the country, particularly where there is a problem with prevailing drying winds, will also prove to be well worthwhile and at the same time have the capacity to produce a product that is useful on the farm.

In addition, work by Fonterra has shown that leaching of nitrogen from below Miscanthus stands is extremely low, being at or below the level observed from pine plantations.  This work is being carried out on a Miscanthus stand that has been irrigated with effluent from a dairy factory, so the nitrogen loading is higher than would be expected with normal rainfall.  This has potential to significantly reduce nitrogen leaching into ground water or waterways.  Places like Rotorua have funding available to assist in reduction of such nitrogen leaching.  Many growers in the Rotorua area – and maybe others in localities where nitrogen is a problem – should be able to access quite significant funding to assist with conversion from pasture to Miscanthus.

Land requirements

The main characteristic required of the land on which Miscanthus is going to be grown is that the terrain is suitable to allow harvesting machinery to traverse it.  To some extent this depends on the type of harvesting machinery that will be used because machinery that requires a truck or truck and trailer to travel alongside the harvester can only be used on quite gentle slopes.

miscanthus-business-01That aside, there is no requirement for high fertility and Miscanthus does handle most soils quite well apart from very heavy clay soils.  However given the choice, Miscanthus performs much better on deep free draining soils because it can get its roots down as deep as 2 metres which makes it much more resilient in terms of drought tolerance, particularly if there is water table within reach of those roots.

The most important site characteristic is rainfall that needs to be greater than 600 mm per year.  Dry matter production of Miscanthus once it is established properly is almost directly equivalent to the rainfall because Miscanthus loves plenty of water, particularly if it is a free draining soil.

When it comes to temperature, Miscanthus relishes warm weather during the growing season but tolerates extremely cold weather during the winter – growing successfully in southern Sweden and Denmark – places where it gets so cold that the sea freezes over in winter.

MNZ experience is that Miscanthus does not like subzero air temperatures once it has started growing actively and this can cause it to be killed back to the rhizome so that it has to start growing again from the base.  However, such cold does not kill the Miscanthus plant itself.

Weed control is the other most important factor and in the first year excellent weed control is essential in order to get establishment and initial production satisfactory.  There are numerous weed control measures that can be taken for most weeds, but grass weeds are the hardest because selective herbicides tend to be less common.  Once Miscanthus has been well established in the first year with good weed control and has started active growth in the second year, it tends to outgrow any weeds that may be present.  Any weeds that do survive will get harvested at the same time as the Miscanthus during the following winter.

It is possible to carry out a clean-up spray with glyphosate or similar during the winter when the Miscanthus is dormant.  This is commonly done during the winter after the first growing season.  On one site of which MNZ is aware, the landowner has used sheep for winter weed cleanup with a high degree of success in cleaning up the site during the first winter.

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