Replace industrial boilers with biomass boilers

This case study is part of decarbonization best practices shared with AB InBev Eclipse sustainability program’s community. Discover more about the Eclipse here.

Cooperativa Agrária Agroindustrial (Agraria) is a food & agriculture company based in Brazil. Agraria plays an important role at malt production in Brazil, with a significant impact on the beverage sector. Since CO2 reduction became a more prominent issue, Agraria took action to understand where were opportunities of decarbonizing on its operations. The main challenges identified were related to the use of non-renewable energy, mainly heavy fuel oil with low fluidity point in industrial boilers. Associated with that, the costs of purchasing this fuel were negatively impacting the competitiveness of the malt. 

In order to start the decarbonization route at Agraria, the first decision at the organization was to change the industrial boilers. The old ones were replaced for others with newer technology, able to work with biomass as raw material. Along with this, a strategic plan was developed to ensure the biomass supply from commercial forests. All the thermal energy used in malt production then started to be sourced from renewable energy. This decision had a positive impact also on cost savings, mainly due to the uncertainty of the oil market. 

In addition, Agraria invested on renewable sources for electric energy. The organization acquired one Small Hydroelectric Plant in partnership with another company and both invested to expand it to a Hydroelectric Plant. Aiming to be self-sufficient on electric energy, recently Agraria started building another Small Hydroelectric Plant which will be ready in 2026. 

On a small scale, Agraria also invested on solar panels. However, the cost-efficiency of this investment is still not considered to be attractive, because the luminosity incidence in the location and productivity of solar panels is limited.

Sustainability impact 

Climate 

Regarding these actions, it was possible to reduce 91.07% of GHG emissions in malt production by 2023, within Scope 1 and 2. The absolute amount of GHG emissions reduction was 32,792 tCO2e. 

Nature 

The absolute amount of GHG emissions reduction (32,792 tCO2e) appeared to have a positive impact on nature and biodiversity located around the malting plant, improving the air quality of the surroundings and mitigating global warming. Without this initiative, today the absolute GHG emission could be near 145,284 tCO2e. 

Social 

The improved air quality of the surroundings was considered to have a positive impact on the community life quality where the industry is located. 

Business impact 

Benefits 

Beyond sustainability, the strategy adopted by Agraria had positive impacts on business due to two main factors.

1. 30% cost savings: first, it was a great opportunity for cost savings, since oil and energy markets are usually a source of threats instead of opportunities. Replacing industrial boilers with biomass boilers in malt production enabled 30% cost savings in thermal energy.  

2. Business safety: second, the strategy represented safety for business, considering the predictability of supply and, to some extent, that prices are mostly managed by the organization. 

Costs 

In order to implement these changes, some investments were required for buying new industrial boilers, implementing the internal biomass supply chain, acquiring and building the hydroelectric plants. On the other hand, all the costs were covered in project plans with financial feasibility. At Agraria, breakeven point up to 10 years is a prerequisite for approving investment projects.  

Impact beyond sustainability and business 

Co-benefits 

At Agraria, the UN SDG 11 ‘Sustainable Cities and Communities’ is important because of the organization’s genesis. Therefore, initiatives which may reflect on benefits for the community, such as the use of renewable energy sources to reduce GHG emissions, are highly promoted. 

Potential side-effects 

The negative side-effects of implementing hydroelectric plants are some impacts on the local environment. On the other hand, in Brazil, the organization responsible for the hydroelectric plant has the duty to offset three times more the negative impacts and provide money to the government for the development of environmental projects.

Typical business profile 

Agraria’s case may be more easily adopted by other industries interested in using biomass as a source of thermal energy, or other renewable sources such as biofuels and organic waste. Regarding electricity, the use of renewable energy sourced from hydroelectrics or solar panels must be carefully assessed, considering the availability and environmental conditions near the geographical location. 

Approach 

In order to implement similar initiatives as Agraria, having comprehensive project plans for each case is fundamental.   

1. First, Agraria aimed to make its malt production into a more sustainable process and looked for alternatives to avoid oil market fluctuations. At this point, a project plan was started, and externalities, internal strengths and weaknesses were listed.  

2. Regarding the opportunities identified, analysis was carried out to understand the potential tradeoffs.  

3. Financial feasibility assessment was a crucial precondition for effective decision-making. 

4. Finally, an action plan was established with a clear timeline for implementing the chosen initiatives. 

Stakeholders involved 

Internal Stakeholders involved 

Many departments were involved to bring these initiatives to the reality at Agraria:  

• Purchasing 

• Maintenance 

• Project Management 

• Legal 

• Energy and Forestry 

• Corporate Strategy 

• Financial 

• PMO 

• EHS 

The synergy between these departments was essential for the success of the projects. 

External Stakeholders involved 

In the same way, external stakeholders were involved such as: 

• Governmental departments 

• Commercial partners 

• Regulatory bodies 

• Local communities 

• Stakeholders involved in the biomass supply chain  

• Customers 

The projects covered the integration of stakeholders’ goals. 

Key parameters to consider 

In this case, some of the key parameters considered were:  

• Availability of thermal and electrical energy in the market 

• GHG emission factors, investment value 

• Time to return on investment 

• Logistics 

The replacement of industrial boilers with biomass boilers took 18 months. 

Implementation and operations tips 

The main challenges faced during implementation of renewable thermal energy were:  

• Biomass availability 

• Climate factors  

• Logistics 

At the implementation of renewable electrical energy, the challenges were: 

• Regulatory and governmental bodies requirements 

• Climate factors  

• Logistics of energy distribution.  

In order to overcome the challenges, it is important to consider all the possible hindrances in the project plan in advance, to anticipate strategies addressing them.