Can the environmental benefits of biomass support agriculture?—The case of cereals for electricity and bioethanol production in Northern Spain

Recent policy documents, such as the EC Communication on an Energy Policy for Europe (January 2007) make emphasis on the opportunities that energy applications can offer certain agricultural commodities, especially in the framework of a progressive dismantling of the Common Agricultural Policy. This paper analyses whether this can be true for wheat and barley farmers, using the real example of a straw-based power plant in Northern Spain and a theoretical factory for bioethanol production fed with cereal grain. The outcomes of such an exercise, in which their relative environmental benefits vis-à-vis fossil fuel alternatives are worked out with the aid of a simplified life-cycle approach, show that the characteristics of the electricity and biomass markets, the baseline scenario and the fuel prices are crucial for the future of the sector.