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evnext-logo-v-smallThis post is a part of BioBiz’s Bio-CNG Perspectives.

BioBiza division of EAI, is a leading market intelligence & strategic consulting firm for the Indian bio-based sectors.


This blog post uses the terms bio-CNG and renewable natural gas (RNG) interchangeably.

Bio-CNG or bio-compressed natural gas, also known as sustainable natural gas or biomethane, is a biogas which has been upgraded to a quality similar to fossil natural gas and having a methane concentration of 90% or greater. As the gas is derived from natural and renewable sources, it is also termed renewable natural gas (RNG).

Introduction

Logistics is a key parameter to consider for an RNG project as it contributes significantly to the economics of the project. Logistics involves three major components – transport (inbound and outbound), storage and segregation/pre-processing of feedstock. As RNG is an emerging market, the logistics value chain is still nascent. Hence it is critical for project developers to understand the key challenges observed in the existing value chain and develop solutions to have a competitive advantage.

This blog post highlights some of the challenges observed in the logistics part of the RNG value chain.

The key areas that are covered under this section are 

  • Transport – inbound and outbound 
  • Storage 
  • Segregation and pre-processing of feedstock

1. Challenges in transport – inbound and outbound

Following are some of the challenges observed in the transport segment of the logistics value chain.

  • Slow adoption of new technologies  

Slow adoption of new technologies has been a big constraint in the logistics sector. Awareness about the economic benefits of using digital technology is low and collaboration among stakeholders far from satisfactory. As a result, the logistics ecosystem is fraught with operational inefficiencies and poor asset utilization. 

Trained manpower is an essential requirement both for third party logistics as well as the manufacturing and retailing sectors, which is very weak at a practical level, i.e., IT, driving as well as at a higher strategic level. The disorganized nature of the logistics sector in India, its perception as a manpower-heavy industry and lack of adequate training institutions has led to a shortfall in skilled management and client service personnel.

  • Regulatory hurdles

The introduction of GST could change the contours of the logistics sector completely but such disruptive reform requires proper implementation. Multiple regulatory agencies, if not coordinated and brought under a single umbrella, could slow down the creation and operation of logistics infrastructure.

  • Economics

Cost of logistics is another major challenge to consider. Depending on several factors such as nature of logistics (own or third party), type of fuel used (fossil or sustainable), plant location, transportation framework (direct or hub and spoke), size and number of vehicles involved, the logistics cost could differ significantly. A proper business model and economic analysis should be worked out beforehand as increase in logistics cost could have a negative impact on the financials of the project.

  • Emergency

During operations, there are chances of any emergency such as vehicle breakdown or any other, which affects the timely feedstock supply and operations of the plant. In such cases, some backup facilities in the form of additional vehicles or surplus feedstock should be considered to eliminate the challenges in continuous plant operation.

2. Storage

Storage involves requirements and conditions for three products in the value chain – feedstock and end products (RNG and digestate). Some of the challenges that could be faced during storage include:

  • Feedstock storage

Storage of waste in the intermittent time period before anaerobic digestion is a key factor deciding the effectiveness of the process, as, if the feedstock is not fed within the stipulated time period, the quality of feedstock starts deteriorating, which is eventually detrimental to the plant operation. 

Different types of feedstock take different periods of time to degrade, and so, proper management should be done regarding storage when co-digestion plant is considered. For example, when considering co-digestion of cellulosic feedstock with food waste, the latter will degrade much faster than cellulosic feedstock.

When we consider storage requirements for different types of feedstock that goes into the digester, except press mud and agro wastes such as paddy straw, the other feedstocks cannot be stored for a longer period of time.  For instance, poultry litter can be stored for a period of maximum 3-4 days beyond that there is an increase in dry matter, while food waste needs to be sent into the digester within 6 hours as prolonged storage deteriorates the quality of feedstock as well as generates odour leading to political issues.

Storage of RNG cylinders under optimal conditions is a necessary factor as RNG is a flammable gas. However, it is to be noted that RNG is not as flammable as other fuels; hence the intensity of damage is far less. The following are the conditions for storage of RNG cylinders as per Petroleum and Explosives Safety Organisation, India. Maintenance of these storage conditions on a daily basis could be challenging.

  • The cylinders shall be stored in a cool, dry, well ventilated place under cover, away from boilers, open flames, steam pipes or any potential sources of heat and such place of storage shall be easily accessible. 
  • The storage room or shed shall be of fire resistant construction.
  • The cylinders containing flammable gases and toxic gases shall be kept separated from each other and from cylinders containing other types of gases by an adequate distance or by a suitable partition wall. 
  • The cylinders shall not be stored under conditions, which will cause them to corrode. 
  • The cylinders shall not be stored along with any combustible material. 
  • Empty cylinders shall be segregated from the filled ones and care shall be taken that all the valves are tightly shut.

Production of solid and liquid digestate is a continuous process, and therefore requires storage capacity until proper utilization by the farmers or proper disposal. The volume of digestate produced from a biogas plant will be around 90-95% of what was fed into the digester. A large volume of this digestate will be in the liquid form (80-90%). Of the total liquid digestate produced, a small portion is concentrated and used as manure and the rest is recycled. The portion to be sold as manure needs to be stored in large tanks as unlike the solid compost, the liquid manure does not have a ready market. 

The necessary storage capacity and the length of the storage period depend on geographical location, soil type, winter rain-fall, crop rotation, specifications for its usage in plant production, etc. 

Digestate can be stored at the biogas plant, or even better at a convenient location close to the fields where it will be applied as biofertilizer. Independent of location, digestate stores are normally above ground storage tanks. Lagoons and storage bags can also be used. In all cases, it is very important to cover the storage facilities as this prevents nutrient losses and pollution through ammonia emissions and from residual methane production, as well as digestate dilution by rainwater.

3. Segregation and pre-processing

Effective segregation and pre-processing of feedstock determine the operational efficiency and yield of a biogas plant. However, challenges exist in carrying out these operations as below:

  • Lack of segregation at source for commercial waste

For a large scale RNG plant, segregation at the project site for select feedstock like food waste is impractical owing to huge quantity and political issues. It is hence necessary to ensure source segregation. Without proper segregation, impurities like plastics may enter the digester which would affect the efficiency and operation of the plant in the long run 

  • Requirements for screening of industrial wastes

In the case of industrial wastes as a feedstock, while the effluents would have already been treated at the industrial ETP system, care should be taken to ensure the absence of any other toxic impurities as its presence may affect the quality of both biogas and digestate which would demand the need for expensive cleaning systems

  • Nascency of pre-processing technology for agro waste

Pre-processing technology for a biogas plant involves size reduction of feedstock and addition of water to bring it to a slurry form. However, In the case of agro waste, owing to the presence of lignin, additional pre-processing steps such as hydrolysis or enzyme pre-treatment is required to breakdown the lignin content. While segregation is not a problem for agro waste, this pre-processing technology is still in its nascent stages, with some technologies based on expensive pre-treatment steps as mentioned above and some based on just the right choice of bacteria for digestion. This will pose a challenge for an entrepreneur in choosing the right technology which ensures improved yield at better economics

 

It could be observed that RNG logistics value chain is still nascent with critical challenges leading to operational inefficiencies and increased economics. Hence partnerships with relevant industry stakeholders and innovations in critical segments could be an avenue to have a reliable logistics value chain.


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