The cost displayed here are limited to the road-side cost. So the cost from road side for transport and possible in-between treatment to the gate of the conversion installation or the pre-treatment installation are NOT included. The cost for the collection from the road-side to the gate as well as the pre-treatment costs are estimated in other WPs in S2BIOM for specific biomass delivery chains further assessed in models (ReSolve) and the S2BIOM tools (BeWhere & LocaGIStics) accessible via the main menu in this toolset under 'Tools'.

The cost up to the road side includes the cost for production prior to harvesting, in case of dedicated perennial crops, crop establishment, fertilizing, crop protection, harvesting/cutting, uprooting, baling, shredding, chipping, crushing collecting and/or densifying in the point of harvest and bringing it to the main road side. Activities related to establishing the contract (transaction costs) and other overheads are not (yet) accounted for. These cost can be quite substantial. One way of dealing with this is to assume a fixed percentage on top of the calculated road side cost (typically in the range of 20% - 50%).

The overall methodology followed to calculate the road side cost is the Activity Based Costing (ABC). It involves the whole production process of alternative production routes that can be  divided  in logical organisational units, i.e. activities. ABC generates the costs of different components based on specific input and output associated with the choice of the means of production, varying with the local conditions and cost of inputs (e.g. labour, energy, fertilisers, lubricants etc.). Since the production of most biomass is spread over several years, often long term cycles in which cost are incurred continuously while harvest only takes place once in so many years, the Net Present Values (NPV) of the future costs are calculated. This provides for  compensating for the time preference of money. To account for the fact that the cost are declining in different periods of time in the future the Net Present Value annuity is applied. In this way annual, perennial crops and forest biomass cost are made comparable (=all expressed in present Euros).

The cost also allow for national differentiation of cost according to main inputs having national specific prices levels. This implies that for the calculation of cost account is taken of national price differences for key inputs for the production process of biomass. National level price data (ex. VAT) included cover cost/prices for labour (skilled, unskilled and average), fuel, electricity, fertilizers (N, P2O5, K2), machinery, water, crop protection and land. Most of these data were gathered from statistical sources such as FADN (Farm Accountancy Data Network), Eurostat and OECD. Most cost levels were gathered for the year 2012.

The cost data elaboration also requires a feedstock specific approach. If cost  are estimated for biomass that is specifically produced for energy or biobased products, i.e. in the case of dedicated crops  the cost structure is clear and all cost can be allocated to the final product. All cost should include the fixed and variable cost of producing the biomass including land, machinery, seeds, input costs and on field harvesting costs. If the biomass is a waste, i.e. cuttings of landscape elements or grass from road side verges, the cost could be zero, as cutting and removing these cutting is part of normal management. However, bringing the biomass to the conversion installation requires some pre-treatment costs, e.g. for drying or densifying and then transport costs have to be made to bring it to the conversion installation. These cost will not be assessed here however as we concentrate on the road side cost.  

Crop residues also require a separate approach as harvesting cost can usually be allocated to the main products, i.e. grain in the case of cereal straw, and not to the residue. However, the baling of the straw and the collection up to the roadside can be included in the costs.

For the elaboration of cost levels account was also taken of the local circumstances and type of systems used for the production and harvesting of the biomass. This is particularly complex in the case of dedicated crops for which cost estimates are mostly and/or only available from pilot plots and practically no commercial plantations. Costs vary strongly per type of management, soil and climate zone. Furthermore, cost need to be allocated per ton harvested mass over the whole life-time of a plantation as harvest levels are very low in the first years and increase in time.

The cost are determined for 2012, the reference year and are kept constant in the future years 2020 and 2030. The reason for keeping cost constant in time has several advantages:

1. Estimations of future changes in prices for (fossil) energy (fuel & electricity), labour, and machinery are difficult to predict. If predictions are used this implies automatically adding additional uncertainties in the cost assessment.
2. If cost levels do not alter in time the uses of the cost-supply data in other models in and outside S2BIOM (e.g. Resolve and BeWhere) deliver results that can only be explained from the internal logic of the models and not by differences in cost level increases based on a large number of uncertainties.
3. The cost levels presented in S2BIOM can still be further adapted by other users applying their own assumptions on future cost level changes. This enables them to use the S2BIOM cost-supply data consistently with their own modelling assumptions.