Arundo profitability: What is the most profitable application of Arundo donax?



As there is a growing and urgent need for replacing fossil fuels, it is vital to know which alternative is worth investing into. As there are several options on how to utilise renewable sources, like energy crops, the questions arises: what is the most profitable way for an investor? In this article the investment possibilities of the energy crop Giant Reed (Arundo donax) and Arundo profitability are both presented. 

Why is it the best time to look at Arundo profitability?

We currently live in a world where ongoing debates about the need for renewable energy, the need for nature conservation, the need to double the world’s food production to eliminate hunger, the need to reduce carbon dioxide emission, and the hope to decrease dependency on dwindling oil resources, are recurring topics that are more frequently related and occasionally even mutually exclusive.

The usage of food crops for the making of renewable fuels has caused the energy vs. food debate (biomass dilemma); the use of insufficient land and drinkable water for the devoted production of biomass conflicts with food manufacture and environment protection; the gathering of harvest remains and forest wastes as biomass to produce renewable fuels is complicated and leaves a CO2 footprint. 


The various types of reed – with giant reed as the prime example – can deliver large quantities of biomass but are scarcely mentioned in discussions. Harvesting reed is not a threat to nature and the ordinary purposes of reed lands, as they are carbon neutral or carbon dioxide sinks. Reed cultivation does not demand far-reaching setup or difficult cultivation and is not in competition with food manufacturing for valuable soil and clean water. 

It is time that giant reed (amongst similar reed crops) and reed lands are recognised to have high economic value when used sustainably and for the right purposes. With the current climatic issues that we are facing, the crop and land must be exploited in a way that is recognised for being environmentally friendly, commercially viable and perhaps most importantly – provides an economic benefit for all stakeholders.

Analysis of Arundo profitability 

Table 1 (Croon, 2014) depicts the commercial aspects of using reed as a raw material for products and energy. 

As for products, bioethanol production seems appealing

Firstly because it has the highest market value (1040 dollars/tonne), meaning one can sell bioethanol made from giant reed for the most money. Also, ethanol production requires less cultivation land (25.000 ha for a yield of 10 tonnes/hecatre) and biomass than pulp – although more than fibreboard.

Bioethanol production from reed requires the highest investment into production (3000 dollars/tonne/year) out of all products, however it has the highest return on capital: 20-25%.

2G ethanol is being supported by EU initiatives

Since the car industry is changing fast, and as current generations becoming more and more aware of their environment, hopefully there will be less cars in the market, and even those will require less or alternative fuels (and will be more electric). Therefore, investing into Arundo donax for bioethanol production is now highly profitable.

Moving on the list, fibre board production seems also very attractive for investors. 

Comparing it with othr products made from giant reed, it require the least amount of reed biomass (35.000 tonnes/year) and the least amount of cultivation land. 

Making fibre boards of giant reed requires the smallest investment per ton of Arundo (675 dollars/year/tonne) – a number which can be further decreased if the company or the individual investing already has a furniture manufacturing plant, as similar equipment can be used for reed as for wood processing.

Overall, fibre board production has similar return on capital (20-25%) as bioethanol production.

Furniture production from Arundo is a popular option

Another application of Arundo donax aims at the energy sector. Regardless whether one wishes to produce pellets, electricity or charcoal, the return on investment is the same (20%) therefore they are equally profitable. The emphasis is more on the initial investment and production costs.

For biocharcoal the area for reed production is by far the smallest (900 ha for a yield of 10 tonnes per hectare) and so is the minimum capacity (menaing that the size of the production to be profitable doesn’t have to be big, it can work on a small scale as well).

Biocharcoal from Arundo is not only sustainable and cheap, but it can be used for energy and soil improvement alike

Whilst the investment per ton is marginally higher that pellet as the pellet production is similarly agile, easy and flexible, the production costs is on average half of pellet: 20 dollars per tonne.

In addition, if the capacity was to run at a minimum (total for minimum capacity) the smallest amount needed is 0.75M$. Thus, whilst all three energy sources (pellets, electricity, charcoal) are all viable and profitable options, if you wish to proceed on a small scale, biocharcoal or even pellets are the best choices. If you wish to proceed with a higher initial investment  – but smaller production costs – then choose investing into electricity production.

If you found our stats on Arundo profitability convincing, visit our website for more information!


Croon, F. W. Saving reed lands by giving economic value to reed. 2014. Mires and Peat, Volume 13 (2013/14), Article 10, 1–13. http://www.mires-and-peat.net/, ISSN 1819-754X

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