KTG Energie flagged the potential for farmers to grow crops
for both food and energy use even as pressure mounted over the production of
biofuels, given the elevated prices of grains.
The German-based group, which turns crops into electricity,
said that it would lift the use of second-crops, planted after summer harvest,
in its generators, which create power from burning gas created from breaking
down plant matter.
The group already sourced 60% of its biomass requirements from
millet and Sudan grass, which are "particularly well suited" as these so-called
The increased use of these follow-on sowings "opens up new
earnings potential" for farmers too, said the company, which is controlled by farm
operator KTG Agrar.
"They can first cultivate grain for the production of food.
After the summer harvest, intercrops are sown and harvested just before the
first frost and then delivered to us," Thomas Berger, the KTG Energie chief
"The result is healthy food and clean energy from the same
Second crops have historically been more common in the US and in particularly South America, where the follow-on crop of corn, after soybeans, is believed by some commentators to have surpassed production from the main corn harvest in 2011-12.
'Not in competition
KTG's comments come amid an enhanced debate on the morality of
growing energy crops, given the succession of weather setbacks to farmers from
Kansas to Krasnodar which have sent prices of the likes of corn and soybeans to
record highs, and lifted values of major food grains such as wheat too.
The European Commission on Monday revealed plans to cap at
5% the proportion of crop-based fuels which can be used to meet the bloc's gasoline
and diesel needs.
The commission said that its "message for post-2020 is that
our clear preference is biofuels produced from non-food feedstocks, like waste
or agricultural residues such as straw".
"These new types of biofuels are not in competition
with food, nor do they require additional land."
The United Nations Food and Agriculture Organization has
also urged limitations on biofuels.
KTG Energie said that its operating model could be
transferred to rival operators' biogas plants.
Indeed, the group was considering boosting its capacity "not
only through organic growth, but also through takeovers".
The comments came as the company said that, even without
acquisitions, its expansion in generating capacity looked set to beat by at
least 10 megawatts (MW) a previous target of 50MW by the end of 2015.
The group's flotation in June "has strengthened our financial
foundation even further, which will allow us to expand our production capacity more
quickly than originally planned".
KTG unveiled sales up 51% at E8.9m in the first half of
2012, although earnings fell by some two-thirds to E0.1m, depressed by one-off
costs including those of the IPO.
Capacity additions would see improvements in both sales and
earnings in the second half of the year.
In Frankfurt, shares in the group touched E14.85 on Tuesday,
their highest since flotation, before retreating to close at E14.68,
a gain of 0.2% on the day.