Convert biowaste into biogas to accelerate decarbonization

Biogas is an emerging lever for industrial decarbonization and is considered a critical success factor in the race to Net Zero. Biogas and other green gases are sustainable, renewable alternatives to fossil fuels that help abate greenhouse gas (GHG) emissions in multiple industries, across the entire value chain. When purified into biomethane, biogas can be injected into the gas grid and used for the same applications as natural gas – generating electricity, heating, cooking, and mobility.

Food and beverage (F&B) companies can potentially valorize organic waste by using it as a biomass feedstock to generate biogas and biomethane. They can also integrate waste generated by their ecosystem into their supply of biomass and decarbonize their Scope 3 emissions. With first-generation technologies reaching maturity, biogases are becoming increasingly cost-competitive, even for non-F&B organizations.

Transforming waste into renewable energy involves converting organic waste materials into biomethane, which can be used as a sustainable alternative to natural gas. The process includes the following steps:

1. Collection: Organic waste is collected from various sources, including agricultural residues, food waste, and industrial by-products

2. Anaerobic digestion: The collected waste undergoes anaerobic digestion, a process where microorganisms break down the organic material in the absence of oxygen, producing biogas

3. Purification: The biogas is then purified to remove impurities and increase the methane content, resulting in biomethane

4. Utilization: The biomethane can be injected into the natural gas grid, used as a vehicle fuel, or utilized in combined heat and power (CHP) plants to generate electricity and heat

This initiative not only reduces waste but also provides a renewable source of energy, contributing to lower carbon emissions and a more sustainable energy system.

Goals

Several companies have successfully implemented waste-to-energy projects. For example, a major dairy company in the United States utilizes manure from its farms to produce biomethane, significantly reducing its carbon footprint and generating renewable energy for its operations. Similarly, a European food processing company converts its food waste into biogas, which is then used to power its production facilities. One example through which the decarbonization benefits can be demonstrated is ENGIE Impact’s work with a client that is a major global food and beverage player with ambitious decarbonization targets. The group committed to reach carbon neutrality on its Scope 1 and 2 emissions by 2030. This entails achieving an 100% emission reduction by 2030 for each production site.

Results

The mix of decarbonization solutions at its sites includes on-site biomethane production using site waste as the feedstock. The corporation first launched a program to repurpose copious quantities of biowaste as fertilizer for local farmers. It then initiated a program to separate the nutrients from its biowaste to be valorized as food for human and animal consumption, using the remaining waste as feedstock to produce biogas on-site. The result is that 80% of the company’s 2030 natural gas demand can be met by onsite biomethane production. This will lead to an emissions reduction of 170kt of CO2 by 2030 compared to business-as-usual over the three targeted sites.

Climate Impact

Targeted emissions sources

This initiative targets Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from the generation of purchased energy) emissions. It also addresses Scope 3 emissions, particularly Category 2: Capital Goods, by reducing the carbon footprint associated with the production and disposal of waste materials.

Decarbonization impact

A noteworthy finding from a recent study is that biogas and biomethane supply chains achieve an average of 51–70% GHG savings compared to midstream natural gas production routes. (1) A common estimate of the reduction of GHGs when switching from natural gas to biogas is between 50% and 80%. The exact reduction depends on factors such as the feedstock source, its energy content, efficiency of the production process, and lifecycle emissions of the supply chain. Biogas is often considered carbon-neutral because the carbon dioxide released during its combustion is roughly equivalent to the CO2 absorbed by the organic feedstock used to produce it. A global food and beverage company aims to reach carbon neutrality for Scope 1 and 2 emissions by 2030 by using on-site biomethane production, which will meet 80% of its natural gas demand and reduce emissions by 170kt of CO2 by 2030 compared to business as usual over the sites in which it was applied.

Nature impact

Transitioning from natural gas to biomethane has numerous environmental benefits. It prevents organic waste from ending up in landfills, where it would decompose and emit methane, a potent GHG. The anaerobic digestion (AD) process that generates biogas goes beyond energy production, as biogas is only one of its outputs. AD integrates well into existing systems and often contributes to environmental protection by reducing fugitive methane emissions and safeguarding water quality. It lowers the pathogen content in slurries and wastewater, mineralizes the nutrients in slurries, making them accessible to plants, and eliminates odors from slurries, enhancing air quality.

AD’s conversion of food waste into biogas reduces scope 1 emissions in the food and beverage sector, and its role in producing biofertilizer decreases scope 3 emissions (for instance, digestate can substitute for fertilizer). Smart agriculture utilizing AD and biofertilizer production reduces the demand for fertilizers manufactured using fossil fuels and composed of mined minerals. The Center for International Environmental Law (CIEL) notes that, “Synthetic nitrogen fertilizer and pesticides are fossil fuels in another form, making them an underrecognized but significant driver of the climate crisis.”(2) Additionally, AD minimizes waterway contamination by pathogens. The shift from natural gas to biomethane therefore contributes to a more sustainable waste management system and promotes a circular economy.

Business impact

Benefits:

• Reduced carbon footprint: Biogas and biomethane are more sustainable as they produce fewer GHGs compared to fossil fuel alternatives. Transitioning to a lower carbon fuel enables companies to meet stricter emissions standards and avoid potential penalties tied to carbon emissions

• Potential cost savings: Biogas can provide more stable energy costs compared to the fluctuating prices of natural gas, with the potential to be competitive on price in the mid-term. The main expense of on-site production is upfront CAPEX for equipment. The feedstock to fuel the process is inexpensive. Over time, the use of biogas can lead to lower waste disposal costs and savings from reduced fees associated with carbon pricing. If biogas production exceeds the company’s energy needs, the excess can be sold, as can the digestate, generating additional revenue. Government support for developing biomethane is may be available in the form of tax exemptions and feed-in tariffs for biomethane injection into the natural gas grid

• Enhanced corporate image and market position: Transitioning to biogas demonstrates a commitment to sustainability, enhances brand reputation, and can attract environmentally-conscious consumers, investors, and employees. Adopting low-carbon practices can be a market differentiator and deliver a competitive advantage

Costs:

• Initial investment: the infrastructure costs for setting up a biogas production and upgrading facility, including digesters and storage, is significant. Additional cost comes from having to modify existing facilities to integrate biogas production and storage systems, and from any downtime during the transition to biogas.

• Price: Natural gas is more competitive than biomethane. As of July 2024, the Dutch TTF natural gas futures price was €36.5/MWh, while a recent study by the Biomethane Industrial Partnership calculated the average cost of biogas production and upgrading at €84/MWh for smaller plants and €54/MWh for larger plants. Natural gas prices, however, can be volatile. The energy crisis following Russia’s invasion of Ukraine sent natural gas prices soaring to €239/MWh. Gas prices also vary from market to market

• Operational management: Efficiently collecting, transporting, storing and processing biowaste requires careful planning and management. Regular maintenance and troubleshooting of the production system is needed to ensure continuous and efficient operation

• Regulatory compliance: Costs are associated with obtaining the necessary permits and licenses to operate a biogas plant, as well as for ongoing environmental monitoring to ensure compliance with regulations and ensure there are minimal environmental impacts from the installation

Typical business profile

The waste-to-renewable energy initiative is particularly relevant for businesses in the agricultural, food processing, and waste management sectors. These industries generate significant amounts of organic waste, providing ample raw materials for biomethane production. Companies at various stages of the Net Zero/Nature Positive journey can benefit, especially those with mature sustainability programs and established waste management practices.

Approach

Implementation involves the following approaches:

1. Assessment: Conduct a comprehensive assessment of the available organic waste and its potential for conversion into biomethane

2. Infrastructure development: Invest in the necessary infrastructure, including anaerobic digesters, purification units, and storage facilities

3. Partnerships: Collaborate with technology providers, waste management companies, and regulatory bodies to ensure compliance and optimize the process

4. Monitoring and optimization: Continuously monitor the system’s performance and make necessary adjustments to improve efficiency and output

Stakeholders involved

Key stakeholders include:

• Waste generators: Farms, food processors, and industrial facilities

• Technology providers: Companies offering anaerobic digestion and purification technology

• Regulatory bodies: Ensuring compliance with environmental regulations

• Energy companies: Facilitating the integration of biomethane into the energy grid

Key parameters to consider

• Initiative maturity: Anaerobic digestion is a well-established technology, but ongoing innovations continue to improve efficiency and output

• Average lifetime: The infrastructure for waste-to-energy conversion typically has a lifespan of 15-20 years

• Technical constraints: Requires a steady supply of organic waste and appropriate technology for digestion and purification

• Geographical relevance: More feasible in regions with high organic waste generation and supportive regulatory environments

• Subsidies: Availability of government subsidies and incentives can significantly impact the financial viability of the project

Implementation and operations tips

Main challenges

1. Initial investment: High upfront costs for infrastructure development

2. Regulatory compliance: Navigating complex environmental regulations

3. Supply chain management: Ensuring a consistent supply of organic waste

Overcoming challenges

1. Funding: Explore grants, subsidies, and private investments to offset initial costs

2. Regulatory guidance: Engage with regulatory bodies early in the process to ensure compliance

3. Supply contracts: Establish long-term contracts with waste suppliers to ensure a steady feedstock supply

By following these steps and considering the key parameters, companies can successfully implement waste-to-energy initiatives, contributing to a more sustainable and decarbonized future.