In what’s claimed to be an industry first, UK farmers considering planting the carbon negative crop miscanthus can now benefit from a finance package to cover virtually all upfront costs for crop establishment, as well as new, direct, long-term offtake agreements with end-users, with 10- to 15-year index-linked annual returns.
The new opportunity has been launched to help support the growing need to decarbonise the UK economy with bio-based solutions, and if planting of perennial crops such as miscanthus is accelerated quickly, to at least 30,000ha/year by 2035, this increase could sequester two million tonnes of CO2e by 2035 and more than six million tonnes of CO2e by 2050.
Oxbury Bank is working in partnership with miscanthus specialist, Terravesta, to deliver the new finance package that’s supporting farmers to plant and establish the crop.
“One of the main barriers to entry for miscanthus growing is the upfront cost of planting,” the managing director of Oxbury Bank, Nick Evans, said. “Our finance package with Terravesta ensures a quick release of funds to help farmers to grow a sustainable business.
“The loan structure allows farmers to pay interest only for up to two years while the crop is establishing, and then pay back the capital across an extended period of time when the crop is producing an economic return.
“Agriculture is changing, and it’s important that farmers have access to finance and capital for their low carbon initiatives and sustainable growth plans, like miscanthus,” Mr Evans added.
Under the new contract, Terravesta will supply its performance hybrids, planting equipment and agronomy throughout the crop’s life, ensuring successful crop establishment by committing to a minimum number of plants emerging under its new planting promise.
“Our current rhizome-based variety Terravesta Athena delivers higher yields than the commercially available Miscanthus giganteus, a calorific value increase of eight per cent, resulting in 180 per cent increase in energy per hectare (megajoules) and significant ash content reduction, all of which benefits the end-user considerably,” Terravesta’s chief operating officer, Alex Robinson, said.
“Terravesta Athena generally takes its first harvest in year two and reaches maturity faster than Miscanthus giganteus, and some of our growers are reporting a first harvest of 8.0t/ha, going onto a mature yield of between 10 to 17 t/ha depending on the soil type.
“The beauty of this new package is that growers have a direct contract with renewable energy power plants, which enables Terravesta to provide a finance package and allows us to focus on crop establishment in the UK at a much greater scale to support our net zero targets.”