Biomass energy: The rebirth of agricultural and municipal waste



The straw in the fields is no longer burned at will, and the garbage in the city is sorted in an orderly manner, making our sky bluer, air fresher, land and water purer. Where does that unburned straw and orderly sorting go? They are transformed into biomass energy such as electricity, gas and oil, which starts again for our better life and creates value again.

Under the promotion of national environmental protection and energy development policies, biomass energy has ushered in rapid development in the past decade, and the energy supply scale has increased from 12 million tons of standard coal in 2010 to 47 million tons of standard coal in 2020, with an average annual growth rate of 15%. Under the continuous promotion of national policies, by 2025, the national biomass energy supply scale is expected to exceed 70 million tons of standard coal, and continue to maintain rapid growth.

• Biomass power generation/heating: In the short term, due to regional biofuel shortage, environmental protection requirements, state subsidy reduction and other factors, biomass power generation/heating will enter an adjustment period; In the long run, benefiting from the abundant fuel supply across the country and the country's 25GW construction target for rural clean electricity/heat, biomass power generation/heating will usher in steady development.

• Bio-gas from municipal waste: Many cities plan to achieve 80%-100% waste sorting and recycling and treatment by 2030, and bio-gas from municipal waste will usher in a new round of growth due to its low air pollution emissions.

• Rural biogas: Under the trend of concentration of aquaculture industry, large-scale rural biogas facilities have gradually replaced household biogas ponds to become the mainstream of the market; It is expected that in the future, under the incentive of further farming centralization and policy subsidies, rural biogas will usher in rapid growth.

• Biodiesel: Export to the EU is the most important sales channel of China's biodiesel industry. In the next few years, with the further increase in EU demand, the gradual rise of domestic demand and the continuous improvement of raw material collection, the biodiesel market will maintain a strong growth momentum.

Bioethanol: Bioethanol has a broad demand space, but limited by food security issues, high-starch crop bioethanol further development space is limited; If the cellulosic bioethanol manufacturing technology can be broken through, the supply capacity of bioethanol in China will be greatly improved.

This paper will briefly introduce the basic situation of China's biomass energy market from the dimensions of development status, industrial pattern, future opportunities and challenges in these five segments.

1 Biomass power generation/heating

Biomass power/heating generally refers to simple power generation or cogeneration by burning crop straw and forestry waste. From 2005 to 2020, under the promotion of policies, China's biomass power generation/heating field has gone through three stages, and the cumulative new biomass power generation/heating equipment has reached 13.3GW.

Due to the localized nature of biomass collection, storage and transportation, the biomass power generation/heating market pattern is more dispersed, and many state-owned power enterprises, private leaders and private small and medium-sized enterprises are involved. Local governments play a decisive role in the project initiation and approval process, but less directly affect the daily operation of biomass power (thermal) plants.

In the short term, affected by factors such as regional fuel shortage, increased environmental protection requirements for exhaust gas, and the gradual withdrawal of state subsidies, the field of biomass power generation/heating will enter an adjustment period.

• Due to the lack of comprehensive capacity planning, some areas with abundant biomass fuel have experienced excessive installed capacity and insufficient fuel supply, resulting in higher biomass power/heating costs.

• Since 2020, some provinces (such as Henan, Shandong, etc.) have put forward higher requirements (<20mg/m3) for the content of nitrogen oxides in the exhaust gas of local biomass power (thermal) plants, resulting in an additional fixed asset investment of about 15% for biomass power/heating enterprises.

• In 2020, the state requires that the total amount of subsidies paid by the central finance for new biomass electricity (heat) plants be controlled within 1.5 billion yuan per year, and the total amount of subsidies will be reduced year by year; Local government subsidies, while negotiable, are significantly lower than state subsidies.

In the long run, there is considerable fuel supply potential across the country, and with the continued policy support of the government, the biomass power generation/heating market will usher in steady development.

Although demand for fuel has exceeded supply in some areas, 85% of biomass fuel is still not used effectively nationwide.

By 2035, the state plans to build 25GW of biomass cogeneration units as a source of clean electricity/heat in rural areas.

2. Bio-natural gas from municipal waste

Under the trend of continuously strengthening the supervision of catering and household waste in cities across the country, the field of bio-natural gas from municipal waste has experienced rapid development in the past five years, and the total energy supply has increased from 110,000 tons of standard coal in 2015 to 880,000 tons of standard coal in 2020.

• Food and beverage waste: In 2018, as food and beverage waste is an important cause of the spread of African swine fever in China, the government began to ban the use of food and beverage waste into the aquaculture industry to provide raw material supply for bio-gas manufacturing.

• Household kitchen waste: In 2017, The State Council issued the first household waste classification policy to gradually achieve a 35% household waste reuse rate by 2020.

Under the favorable factors such as the standardization of urban waste management and the support of waste reuse policies, the bio-gas industry from urban waste will usher in rapid growth, and it is expected that by 2025, the energy supply will exceed 2.4 million tons of standard coal.

• By 2030, several cities plan to have 80 to 100 percent of their waste sorted, recycled and disposed of.

• Bio-natural gas production is an important path for municipal waste treatment, which can improve the capacity of municipal waste management and achieve synergy with waste management work.

• Biogas produced through anaerobic fermentation can significantly reduce air pollutants such as sulfur dioxide and nitrogen oxides compared to power generation from direct combustion of waste.

3 Rural biogas

Under the trend of strong policy support and increasing concentration of aquaculture industry, the biogas output of large-scale rural biogas facilities has been greatly improved. The distribution of rural biogas facilities is relatively dispersed, and large-scale farms are constructed and operated independently through EPC contracts, so the construction of facilities is closely related to the biogas output and the development trend of large-scale farms.

In 2017, the National Development and Reform Commission issued the 13th Five-Year Plan for the Development of Rural biogas, which provides 40% investment subsidies for the construction of large-scale rural biogas facilities.

• The concentration trend of the farming industry is obvious, and large farms are replacing family farming, providing a better foundation for the construction of large-scale biogas facilities.

4 Biodiesel

Thanks to the European Union's strong demand for biodiesel, the continuous improvement of domestic catering waste recycling supervision and policy support, China's biodiesel market has grown rapidly, from 400,000 tons in 2015 to 1.3 million tons in 2020, with an average annual growth rate of 26%.

In China, the biodiesel industry chain is mainly composed of waste oil recovery, fuel biodiesel production, export and other links:

• The use of waste oil to produce biodiesel for fuel is the main path of the industrial process in the field of biodiesel in China; At present, the total production capacity of biodiesel for fuel in China is about 1 million tons, concentrated in three private enterprises, with CR3 reaching 65%;

• The price of domestic biodiesel is significantly lower than the export price, resulting in the sale of biodiesel in China mainly for export, and a small amount of products are sold to domestic oil companies for blending;

There is no growth target for the proportion of biodiesel used in China, and the demand for biodiesel lags behind that of the EU and the US; However, with the gradual implementation of the goal of reaching the peak of carbon and carbon neutrality, China is likely to introduce a clear biodiesel growth target, and local demand will also usher in rapid growth.

In the case of strong export demand from the EU, the implementation of China's green economy policy and the improvement of raw material collection, the biodiesel industry will maintain continuous growth momentum in the next few years, and it is expected that by 2025, the total supply capacity will reach 3.8 million tons of standard coal. However, in the long run, limited by the total amount of catering waste, biodiesel production may encounter bottlenecks in growth.

5 Bioethanol

In consideration of food security, China is very cautious about the development of bioethanol, and mainly uses the production of bioethanol as a technical tool to rationally utilize the extended grain and the low edible value grain. The "Tenth Five-Year Plan" period is the embryonic stage of China's bioethanol industry, which mainly uses the overdue grain to produce bioethanol to avoid the overdue grain entering the normal grain trade channel. After 2007, bioethanol production ushered in steady development, with an average annual growth rate of about 5%, to achieve 3.2 million tons of bioethanol production by 2020.

The technology of using expired grain to produce bioethanol has matured, but in the operation process, bioethanol enterprises are highly regulated by the National Development and Reform Commission in project start-up, raw material procurement and product sales.

China attaches great importance to food security and has put forward a new food security concept of "ensuring basic self-sufficiency in grains and absolute food security". * Therefore, in the development of bioethanol, it is expected that China will continue to maintain a cautious attitude. However, if a technological breakthrough is achieved in the field of cellulose bioethanol, cellulose bioethanol will provide a strong boost to the development of biomass energy in China.