Supply curves of reed canary grass (Phalaris arundinacea L.) in Västerbotten County, northern Sweden, under different EU subsidy schemes

A partial equilibrium model with a break-even price approach was used to create supply curves for the energy crop reed canary grass (Phalaris arundinacea L.) (RCG) in Västerbotten County in northern Sweden. The impact of the European Unionʹs (EU) Common Agricultural Policy (CAP) on the supply curves was studied by comparison of three different scenarios. Supply curves were created including agricultural subsidies under the current subsidy scheme, the Commissionʹs proposal for a new subsidy scheme for implementation in 2004, and without subsidies. The geographical distribution of the potential supply was determined by the use of GIS tools. Under the current subsidy scheme, the lowest RCG farmgate fuel price would be 56 SEK MWh−1. A RCG production equalling 360 GWh could be available at that fuel price level. Under the proposed subsidy scheme of 2004, a farmgate fuel price of 99 SEK MWh−1 is required for RCG production amounting to 910 GWh. In the scenario where no subsidies are disbursed, the lowest break-even price would be 115 SEK MWh−1. In all scenarios, a biofuel feedstock production from RCG equivalent to 1.3 TWh could be available at a farmgate fuel price of 116 SEK MWh−1. The RCG supply would be concentrated in the coastal area of the county, which has the most developed infrastructure and the highest population density, thus providing a nearby market for the fuel.