1. Cultivating energetic willow in rural
Romania
Tudor Carstoiu1408558
1 IDEA
Energeticwillowbyitsdifferenttypesaccordingtothe local climaticconditions,isthe rightanswerto
the questionrelatedtohowtoobtainina shorttime verygood amountsof woodmassperhectare.
Witha productivityupto40 tones/hectare woodmassin2-3 years,energeticwillow canensure the
basicraw material fordifferentapplicationsinordertoobtaincompactedwoodenproductslike solid
bio-fuelordirectcombustionproductstoproduce energyand/or electrical power.
Demandinganot so pretentioustechnologyandveryadaptable toall type of soil,energeticwillowmay
become the basisof a sustainable businessinRomania.Supportedby programsfinancedbythe
EuropeanUnion,suchinvestmentscanbe rapidlypromotedandimplementedbyfarmers,inparticular
on the fieldsnotofferinggoodresultsintraditional cereal cultivation. (RebinaGroupRomania)
A key complementaryassetforthe cultivation of energy willow isthe availabilityof suitablelandand
thisinitial businesspropositionargues thatthe areaaroundthe commune of Șilindia,countyArad,
Romaniacan be a greatchoice due to the availabilityof cheapland,withconditionsjustperfectforthe
developmentof energywillow. Furthermore, the technology(licensedseedlings) andknow how canbe
obainedatverycompetitive pricesbecause,aswe will see ingreaterdetail inthe nextparts,the
expansionof energeticwillowcropsisa win – winstrategyfor all parts involved.Takingadvantage of an
everincresingdemand,havingalongtermfocuswithsustanabilityatitscore due to a positive scoring
on all elementsof the triple bottomline(economic, social andenvironmental) signalsabusiness
propositionwithveryhighsuccespotential.

2. 2 MOTIVATION
Main driverof motivation comesfrompersonal experience concerning averyspecificareaof rural
Romania.Inthe springof 2013 my family decidedtorelocate fromthe cityof Arad to the country side
and they managedtofinda humble yetvery beautifulplace inthe village of Șilindia.
Șilindiaisacommune inAradCounty,Romania,itliesinthe Crișul Alb Basin,atthe northernfeetof
Cigherul Hills,alongthe CigherRiver.Itstotal surface is3093 hectares.Itis composedof five villages:
Camna,Iercoșeni,Luguzău,SatuMic, and Șilindia(situatedat54 km fromArad).Itspopulationis slightly
under1000 inhabitantsandthe economyismainlyagricultural (wikipedia).
Duringthe time spentthere Isaw a huge unexploited potential. Due tomigrationinmore developed
placesthisarea isunderpopulatedsothe costof houses andland are relativelylow comparedtoother
areas nearbyandverylowhavinga europeanperspective.Furthermore, thereare large pieces of land
that, fordifferentreasons,are unexploited.
Under thisconsiderations,I startedthinkingaboutwaystovalue thispotential anddifferentideascame
linkedtosustainablecommunitybased agriculture,rural turism, attractionof startupsor, more recently
renewable energy.Afterweightingthe prosandcons the ideathat stood up as bestinitial solution was
the plantationof energeticwillow.Takingnow aglobal perspective thusbecoming“glocal”,itiswidely
acknowledged thatthe worldincludingthe EuropeanUnionislookingforlongtermsolutionsforthe
mattersrelatedtothe fuel reserve terminationandthe reductionof GreenhouseGases(GHG) produced
by the use of these fuelsandindustrial activities. Energeticwillow isacarbon neutral agricultural plant
that isconsideredthe bestenergeticplantbythe Swedish expertsthatcloselystudiedandimprovedit.
Cultivationof short-rotationwillowcoppice wasintroducedinSwedenafterthe oil crisisinthe 1970s,
withthe intentionof replacingfossilfuelsbynew energysources.Extensiveresearchtoidentifyfast-
growingspeciesthatcouldbe grownintensivelyforuse inenergyproductionsuggestedthatwillows
grownin coppice systemswere the mostsuitable (Sirén,Sennerby-Forsse andLedin,1987).Nutrient
utilizationandstandmanagementwere seentobe more cost efficientforwillow thanforotherwoody
species,andshort-rotationwillow coppiceprovedtobe a sustainablewayof producingfuelsthatwere
carbon dioxide neutral,sinceburningof the biomasswouldrelease intothe atmosphere the carbon
dioxide thatthe plantshadtakenfromthe air. About16 000 hectares of willowsinshort- rotation
coppice systemsare currentlygrowninSweden,consistingmainlyof differentclonesandhybridsof
Salix viminalis,S.dasycladosandS.schwerinii.( Dimitriou I.andAronson P,2005). More recently,
energeticwillow startedtogainhighpopularityalsoinRomania,asaalmostriskfree investment,
perfectforthe degradedandunusedterrainsof this country.
The advantagesare numerous,toname a few:veryhighgrowthrhythm(insummerupto 3cm/day);
veryhighcaloricpower(4900 kcal/kgdouble thanoil orgas);it can be cultivated(it’seven
recommended)inswamps; throughitscultivationthermicandelectricenergy canbe obtained;the
spreadof energeticwillowcropguaranteesasecure andun-pollutantsource of energythatisan ideal
solutiontodeforestation;harvestisdone withthe regularagricultural machinesinperiodswhenthey
are usuallyidle(November–March) thus usingmore efficientlythisresourcesandalsothe workforce.
(RebinaGroupRomania)

3. Productioncostare low,requiringanunique initialinvestmentrangingfrom2000 to 2500 euro/hectare
while fromthe second yearproducesaconstantyearlycrop of 30-40 tonnes(1200 – 1600 euros)/
hectare/year.Underintenseirrigation the cropcan reach even60 tonnes/hectare.The lifespanof a
plantationisaround25 to 30 years.It needsabitof attention inthe firstyearwhile fromthe second
yearonwardsthe onlywork isdone duringharvest,thusbeinglabourun-intensive.
Besidesitsobviousenergeticpurposes thatcouldstronglyreduce energyexpenses bothincountryside
and cities,energeticwillow canbe usedalsoas raw material forproductionof cellulose,paper,
methylatedalcohol,inpharmaceutical industry(aspirin),furniture industryorconstructions.
(gazetadeagricultura).
Whenusedfor phytoremediation (treatmentof environmental problems throughthe use of plants),
short- rotationwillowcoppice offersadvantagessuchashighbiomass yieldsandremoval of hazardous
compoundsthrough frequentharvests.The highevapotranspirationrate androottolerance of willows
infloodconditionsallow the use of highirrigation rates.Inaddition,short-rotationwillowcoppice
standsare capable of cleaningpollutedsitesbytakingupsubstantial amountsof heavymetalssuch as
cadmium,andtheycan retainlarge amountsof nutrientsinthe soil-plantsystem.Short-rotationwillow
coppice phytoremediationsystemssuccessfullyremove hazardouscompoundscontainedinthe various
wastesinSweden,andutilize the nutrientsandwaterappliedinthe productionof biomass.Large-scale
systemsprovide ecologicallysoundandcheapalternative treatmentsolutions,whilebiomass
productionforenergypurposesisincreased. ( Dimitriou I.andAronson P, 2005).
Summarizing,energywillow canscore verypositivelyinall categoriesof the triple bottomline.Itisa
proveneconomicresource,withgreat profitability,stabilityandlongtermperspective,it hasobvious
positive impactforthe environmentandit canhave strong social potential due toitscontributionto
rural development.
Under the trendof continuous increasingcostof traditional sources like oil,gas,wood andelectricity but
alsoconsideringitsmultipleuses expertssaythe demandforenergy willow demand canjustincrease.

4. 3 STRATEGY
Usingthe entrepreneurial–minimuminfoprincipleof innovation(Moore-Davis,SiliconValley), having
potential accesstothe critical asset,namelyland,havingpossibilitytoaccessE.U. fundsand buildingon
the shouldersof giantsby enjoyingsecondmoveradvantage (Aroraetal,Specialized suppliers) itseems
that we have the right initial ingredientsforverysuccessful longtermbusinessproposition.
As BobNoyce formalizedthe ideaof “minimuminformation”principle forefficientengineering or
“commercial science”, Iwill discussnowthe minimumingredientsforasuccessful energeticwillow
businessproposition.Firstly,the locationof the potential businessplaysa fundamentalrole.Asstated
earlier, Șilindiacommune has3093 hectares of landand a population lessthan1000 individuals.A huge
part of thislandisnot usedinany productive way anditcouldbe bought at veryconvenientprice of
about1000euros per hectare. Secondly,from personalexperience,Iknow the local municipality would
be veryinterested tohelppromotingapropositionlikethis.One of the keyreasonsisbecause nowthe
wastmajorityof the village useswoodasheatingoptionandthe municipalitysubsidiesitsprice because
mostvillagersfindithardto payfor heatingwithwoodasthe regioniseconomicallyunderdeveloped.
Furthermore,increasingconcernsare broughtuplatelydue todeforestation,butnoreal alternative
heatingsource isusedsofar. Heatingcostsin winterare byfar the mostheavyindividual economic
burdeninthe area so a reductionof itthroughusinga differentmaterialforheating,besidesthe
economicandenvironmental benefits,wouldhave alsoastrongsocial impact,thuscreating
reputational capital,acritical assetinsmall andunitedcommunitieslike Șilindia.That’swhy the strategy
isto act very local,to solve concrete problemsinspecificcommunitiesinordertoreceive the trust,
supportand money of the local community andmunicipalitywhich will allow forfurtherexpansionof
the business. Thirdly,asnoone on a 150km range isdoinganything similarandleveragingonthe
reputational capital created,inthe mediumtermthe new business couldestablished itself asaregional
monopoly andas scale isbuildingfindothermarketsandusesforthe biomass.If forany reasonthe
supplyishigherthanthe local or regional demand,there isaeverincreasingnationalandeuropean
demandsorisksare marginal. Forthly, the factthat the energywillow cropscanbe alsofinancedbythe
E.U. is an additional reasontobelievethatboththe supplyandthe demandof thisveryproductive
renewable resource will continue torise creatinggreatopportunitiesforanycompanythatwantsto
enterthisbusiness.The RomanianNational programforrural Development(P.N.D.R.) togetherwith
EuropeanUnionprogram Phare investsaround10 billioneuroinRural Developmentandgrantsfor
energeticwillow cropsare onthe rise throughthe measures112 and 121, economicallyunderdeveloped
areas like Șilindiahavingpriority.
As wasdemonstratedbyAroraetal the vertical organization of industry in the firstworld ‘matters’not
justforthe growthof the firstworld butalso forthe growth of othernations. Thisimpliesthathere we
do notneedto reinventthe wheel andwe are buildingonthe shouldersof giantsbecause energetic
willowwastestedformanyyearsuntil mostproductive type wasdiscovered. The leadingknow howin
thissectoris foundat the Swedishcompany Salix EnergiEuropaABwhichhas all the incentivestocreate
winwinsolutionsbecause,apartfromthe obviousenvironmental andsocietalbenefits,the expansion
of the marketforenergywillowandthusthe use of thisof thissource of biomassat a largerscale
stronglydependsonhowfastthe diffusiontakesplace. Becausethe core complementaryasset,namely

5. land,isnot that easyto aquire or manage at a verylarge scale so we deal withfragmentedmarkets
(large N) whichimpliesmore divisionof inventive labourandmore general purpose technologies
(BresnahanandGambardella1998). Thisbasicallymeansthatthe ownerof the technologyhasa strong
interesttoconvince asmanyfirms as possible toinvestin the differentvarietiesof energeticwillow,
cause for himlicensingthe technologyandspreading the know how toothernational orregional players
isthe mostprofitable option.Asamatter of fact, Salix Energi EuropaABhas signedLicense and
DistributionAgreementsforcertainenergywillow varietieswith3Romanian companies:S.C.Rebina
Agrar S.R.L.,S.C.AgrifarmS.R.L.,Kontrastwege S.R.L. butalsoseveral othersaroundEurope (figure 1).
As arguedbyFosfuri(2007), the licensing of technology entailsa trade-off:licensing paymentsnetof
transaction costs(revenueeffect) mustbebalanced againstthelowerprice–cost margin and/orreduced
marketshareimplied by increased competition (profitdissipation effect) fromthe license. Here,because
of the fragmentedmarketsandbecause the pie isquicklyrising,licensingrevenue seemstodominate
the profitdissipationeffect. All of the above pointsthatthe youngmarketforenergywillow hasspace
for bothsmall playersthatact at verylocal levelsbutalsoformediumandlarge playersthatcan act also
as coordinatorsandknowhowdistributors. Furthermore,the outputof thismarketisof great
importance forsociety atlarge so supranational entitieslike the E.U.are stronglyencouragingthe
diffusionof producersof energeticwillow,inthe contextof rural developmentandenergyself-
sufficiency.
Figure 1 Licensed cutting producers/distributors in Europe

6. 4 ORGANIZATION
Goingback to our verylocal focus,the planis to start small inorderto keeplocal focus andsteadily
increase inscale as knowledge andcapital accumulates.With aninvestmentin 20hectaresin2 years
there will be aninitial productionof 60– 80 tonnes,whichtranslatesinprofitsof 20k – 30k europer
yearfrom the secondyearonwards. Consideringthata standardhouseholdusesaround2tonnesof
woodperyear forheatingand knowingthatthe caloricpowerisalmostdouble forenergywillow than
the standard woodusedforheating, withanannual productionof 70 tonneswe couldinitiallysupply70
householdsfull heatingsolution atprice around70 -80 eurosper tonne,whichisbettereventhanthe
actual subsidizedprice of 60 eurosforper tonne of wood. We couldbecome ourselvesthe receiversof
the subsidyfromthe local municipality,aswe give cheaperheatingsolutionbyusing arenewable source
and offera real alternative to deforestation. A goodstartingpointforusingouroutputwouldbe the
heatingof the local municipalityinfrastructure (school,municipality). Besidesitseconomicadvantage
thiswill save alsoinlabourbecause differentfromwoodwhichhastobe cut manuallyinsmall pieces,
willowis transformeddirectlyincondensed briquettes. Itisworthmentioningthat briquettescanbe
producedalsofromdifferentresidualproductsof agricultural activity,thustransformingwaste into
energy,the onlydifference isthe caloricpower,energywillow havingthe highestone.
The investmentinlandwouldbe of 1000 euros/hectare,meaning20keuros.Itis possible toobtainan
evenlowerprice aswe will targetlandswhichare notsuitable fortraditional agriculture,like swampsor
otherdegradedlands.The know-how,seedlingsandpreparationof the groupcanbe done togetherwith
one of the 3 licensedproducersinRomania,namelyRebinaAgrar whichisalsothe most advanced and
the closestone(200km away). The investmentinthe energywillow cropswill be around2500 eurosper
hectare,meaning50keuros. RebinaAgraralso helpedinthe creationof the associationof energywillow
growersinRomania(A.C.S.E.R.) inordertocreate synergies,protectthe interestsof energywillow
growersandhelpat everystepof the process(sellingof seedlings,technical andprofessional help,
selectionof the surface,landpreparation,plantation,mechanical harvest,cutting,biomasstransport
and reception).Asthisassociationplaysacritical role inkeepinggrowersalignedandpricescompetitive
our businessfindsitvital tobecome anactive member. Addingalsothe costof a machine to produce
briquettes(3000 euros) andadministrative costswe arrive to10k thus we have a total fix investmentof
80k euros, recoverable in4yearsafterthe 3rd
harvest. Afterthat,otherthingsequal,forat least20 years
a yearlyprofitof 20 – 30k euroswill be produced,the onlyeffort beingmade atharvestandselling.As
mentionedearlierthisisjustthe startingpoint,asfuture planswill includeexpansionof the crops,
diversificationinuse of the output,investmentsinagricultural machinesandevendiversificationsinto
differentbusinesslike rural turismall havingatcentre rural development.

7. References
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