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Biogas production 101

Biogas is produced from a broad variety of (residual) flows of biomass. Think of expired sewage sludge, residual biomass streams from the processing field, manure, roadside vegetation, organic waste and unpacked foods.

The organic matter from these sources is transformed into methane gas by bacteria. For this market, Rabobank shares recent figures and trends. Growing pressure on the cost of raw materials.

Contents show
1 Pressure on raw material costs is increasing
2 Biogas sector developments
3 Economy
4 Durability
5 Circular economy
6 Innovation
7 Society
8 Regulations and rules

Pressure on raw material costs is increasing

It will become evident in the coming years how many digesters will continue to live long after the MEP (Environmental Quality of Electricity Production) subsidy under the SDE (Stimulation of Renewable Energy Production) subsidy. Together with growth through new ventures, we expect the production of biogas to increase slightly and the pressure on the cost of raw materials to increase again .

Given, for example, the limited presence of residual biomass flows in the Netherlands and the ever-decreasing cost of wind and solar energy, the biogas sector is expected to expand only to a limited extent and stabilize within five years. The future SDE conditions will decide whether it is feasible to import biomass residual flows and whether the sector will be able to expand further.

Biogas sector developments

In addition to the sum of the SDE subsidy, the raw material costs (input and output) decide a good project. The growth of this biggest cost item has improved over the past three years through increased availability of raw materials and changes in business operations, such as :

Increase permit (tonnages of fermented products) Increase fermentation ability Biogas was primarily converted into renewable energy and heat until 2014. The maximum useful use of the residual heat from CHPs (combined heat and power installations) is needed for a profitable case with green power output. Projects are rising and more than half of the biogas is turned into green gas and pumped into the network of natural gas.

Economy

The Netherlands is just 6%, with the share of renewable energy, while the target for 2020 is 14%. To avoid projects from coming to a standstill after the initial subsidy period, this leads to increased and prolonged SDE subsidy budgets.

“The realization that fossil energy is finite means that the biobased economy is gaining a foothold.”

Durability

More and more corporations are on the agenda, reducing greenhouse emissions and improving the carbon footprint. The fermentation of biomass residual flows is completely in line with this objective.

Circular economy

From biomass waste streams, nutrients that are sufficient for another application will progressively be obtained. Tomato pulp for dashboards (Ford), for example, or leaves and other fibers for paper. It is important to consider the further applicability of such waste flows before the biomass waste flows are digested. It is of great importance here to collaborate with parties outside the chain.

Innovation

The key developments are related to reducing the cost of raw materials. Pre-processing procedures, for instance, and the addition of enzymes, for example, are studied to generate biomass that is hard to digest.

In order to minimize digestate disposal costs, methods for manure processing and water purification are being studied.

Society

In culture, the circular economy is becoming ever more integrated. In their buying actions, customers are gradually taking this concept into account and businesses are being called to account by NGOs and the government (for example, by tendering requirements) and retail.

The recognition that fossil oil is finite suggests that the bio-based economy is gaining ground more and more. Biomass is increasingly used, increasingly higher in the value pyramid, to replace fossil raw materials.

There is, for instance, a change from the use of verge and natural grass: composting to fermentation to processing for the paper industry to raw material.

Regulations and rules

Laws and regulations in the Netherlands and neighboring countries concerning the application of manure / digestate are becoming increasingly stringent. This places more pressure on sales prospects and raises the digestate’s sales costs.

As a result, food waste has become an increasingly significant concern and more and more plans are being made to reduce the availability of residual flows of biomass.

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