1. business and industrial
2. energy
3. renewable energy

Policies and strategies for introducing biogas buses in public
transport
This publication has been produced with the assistance of the European Union
(http://europa.eu). The content of this publication is the sole responsibility of
Baltic Biogas Bus and can in no way be taken to reflect the views of the European
Union.
The Baltic Biogas Bus project will prepare for and increase the use of the eco-fuel Biogas
in public transport in order to reduce environmental impact from traffic and make the
Baltic region a better place to live, work and invest in.
The Baltic Biogas Bus project is supported by the EU, is part of the Baltic Sea Region
programme and includes cities, counties and companies within the Baltic region.
Author:
Stefan Dahlgren, Tharaka Gunaratne, Therese Fredriksson
WSP Sverige
Project Manager:
Lennart Hallgren, Stockholm Public Transport
Date:
2012-08-08
Reviewed by:
Martin Ahrne, Biogas Öst
Stein BjØrlykke, HOG Energi
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EXECUTIVE SUMMARY
Climate change and environmental impact caused by utilization of fossil fuels and
an increasing transport sector has reached a point of no return. The dependency of
fossil fuel is also endangering national energy security. The transportation sector
is the highest energy consuming sector in the EU. This sector is also one of the
most difficult sectors to deal with when it comes to transformation to alternative
fuel. The transformation of large fleets, such as public transportation, to
renewable fuel is an optimum starting point in reducing utilization of fossil fuel in
the transport sector. As far as transportation fuels are concerned biomethane is
the cleanest fuel that could be fed into a combustion engine at the moment.
Unlike conventional fuels, combustion of biomethane will only produce carbon
dioxide (CO2) which is carbon neutral since the biogas is produced from organic
material. Stockholm Public Transport Company, responsible for the public
transportation in the Stockholm area, has initiated the Baltic Biogas Bus (BBB)
project, under the Baltic Sea Region program of the European Union.
This report discusses in detail the existing energy situation in Europe, drivers for
implementation of Biogas Bus Projects, factors hindering execution of policies and
strategies towards fostering such projects, proposes a strategic action plan, and
gives recommendations on strategies to implement and promote biogas bus
projects on international, national and regional levels. In the end of the report a
concept for a strategic stepwise action plan is presented and proposed.
Different environmental, political and economic factors can be seen as drivers for
implementation of transforming the public transport sector from fossil fuel based
to renewable. Climate change, peak oil and security of energy supply, air quality
and increase of transportation and congestion have been recognized as the most
important drivers for change. Societal benefits such as locally produced biofuels as
an energy source, regional infrastructure development, employment
opportunities, sustainable waste management and the societal benefits of public
transport have been also considered as added values. Thereby, environmental and
societal benefits related to Biogas Bus projects are considered as prominent
factors influencing the decision making of implementation. However, the
implications of the economic and financial aspects of the role played by fossil fuels
in the present day contextual, is a decisive factor. Taken into account the social
economic costs the biogas is favorable compared to fossil fuels.
Policies made at global level on combating climate change such as Kyoto Protocol
and at regional level on nurturing renewable energies such as Twenty Percent
Renewable Fuel by 2020 are usually manifested in strategies and political targets
at the national level. The targets have to be ambitious enough to drive a real
change and most importantly, should be adhered to irrespective of the political
interests.
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Recommended strategies for implementation of Biogas as vehicle fuel are;
General recommendations:
To set ambitious long term sustainable environmental goals on national and
regional level.
Use the best available technique of today, don’t wait for the “perfect”
solution to come.
Long term contracts that make it possible for producers to invest in biogas
production.
Follow the development of new technical solutions and engage in projects
and/or procurements to help new solute on to develop.
Success factor: Important to disseminate knowledge of biogas as a
renewable fuel.
Economic Strategies
CO2 tax on fossil fuel.
fiscal tax on fossil fuel (in combination with tax exemption or tax
deduction for renewable fuel).
Investment support and soft loans for investors in biogas project have in
Sweden been proven to be an effective strategy for promotion of biogas
and biomethane production and biogas bus projects.
Regulatory Framework
Establishing adequate vehicle emission standards.
Ensuring the accessibility of biomethane into natural gas grids.
Adopting the green gas concept.
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Table of Content
1
INTRODUCTION AND BACKGROUND ..................................................................................................7
1.1
1.2
2
INTRODUCTION ....................................................................................................................................... 7
BACKGROUND ......................................................................................................................................... 8
ENERGY BALANCE AND DRIVERS FOR BIOMETHANE IN PUBLIC TRANSPORTATION ....................9
2.1
ENERGY BALANCE IN EUROPE................................................................................................................... 9
2.2
DRIVERS FOR BIOMETHANE FUEL AND PUBLIC TRANSPORT.......................................................................... 11
2.2.1 Climate Change .......................................................................................................................... 11
2.2.2 Peak Oil and Security of Energy Supply ................................................................................. 12
2.2.3 Air Quality ................................................................................................................................... 13
2.2.4 Increase of Transportation and Congestion .......................................................................... 14
2.3
SUSTAINABILITY REQUIREMENT FOR BIOFUELS ......................................................................................... 14
2.4
POTENTIALS FOR BIOGAS PRODUCTION IN BALTIC SEA REGION ................................................................. 15
2.5
BIOMETHANE MARKET DEVELOPMENT – THE SWEDISH EXAMPLE................................................................. 16
3
FACTORS INFLUENCING DECISION MAKING ....................................................................................18
3.1
BIOGAS BENEFITS.................................................................................................................................. 19
3.1.1 Environmental Benefits ............................................................................................................ 19
3.1.2 Societal Benefits ........................................................................................................................ 20
3.2
FACTORS HINDERING IMPLEMENTATION OF BIOMETHANE PROJECTS........................................................... 23
3.2.1 Knowledge and Skills Barriers ................................................................................................. 23
3.2.2 Institutional and Administrative Barriers ............................................................................. 23
3.2.3 Technological Barriers .............................................................................................................. 23
3.2.4 Organizational Barriers ............................................................................................................ 24
3.2.5 Political Barriers ........................................................................................................................ 24
3.2.6 Market and Financial Barriers ................................................................................................. 25
3.3
ECONOMICS OF BIOGAS .......................................................................................................................... 25
3.4
PROCUREMENT RULES............................................................................................................................ 27
3.5
STAKEHOLDERS IN BIOGAS CHAIN ........................................................................................................... 27
4
POLICIES AND STRATEGIES ...............................................................................................................30
4.1
POLICIES AND LONG TERM TARGETS AT INTERNATIONAL LEVEL ................................................................. 31
4.1.1 Policies and Political Targets .................................................................................................. 31
4.2
STRATEGIES AT INTERNATIONAL AND NATIONAL LEVEL ............................................................................. 33
4.2.1 Economic Strategies .................................................................................................................. 33
4.2.2 Regulatory Framework.............................................................................................................. 34
4.2.3 Competence Development and Knowledge Dissemination ................................................. 37
4.3
STRATEGIES AT REGIONAL AND LOCAL LEVEL........................................................................................... 38
4.3.1 Collective Involvement of Citizens ......................................................................................... 38
4.3.2 Centre for Knowledge in Biogas .............................................................................................. 38
4.3.3 Stakeholder Involvement in Decision Making ....................................................................... 39
5
DEVELOPING STRATEGIC ACTION PLANS ........................................................................................39
5.1
DETERMINISTIC FACTORS OF AN EFFECTIVE STRATEGIC ACTION PLAN ....................................................... 39
5.1.1 Environmental Concerns ........................................................................................................... 39
5.1.2 Economic Aspects ....................................................................................................................... 40
5.1.3 Reliability and Durability ......................................................................................................... 40
5.1.4 Obligations/Liability ................................................................................................................. 40
5.2
PROPOSED STRATEGIC ACTION PLAN FOR BIOGAS BUS PROJECTS ............................................................. 42
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6
RECOMMENDATIONS ..........................................................................................................................46
6.1
RECOMMENDED STRATEGIES ................................................................................................................... 46
6.1.1 General recommendations: ...................................................................................................... 46
6.1.2 Economic Strategies .................................................................................................................. 46
6.1.3 Regulatory Framework.............................................................................................................. 47
7
REFERENCES .......................................................................................................................................48
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1 Introduction and Background
1.1 Introduction
Inevitable climate and environmental crisis caused by the prolonged usage of
conventional fuel has reached a point of no return making prompt remediation
mandatory. Extended dependency of fossil fuel has endangered the energy security
of entire nations, and has paralleled the dire situation with a frantic requirement
for alternative sources of energy.
Transportation plays a vital role in the European Union (EU) as far as the energy
mix is concerned. It is the highest energy consuming sector in the EU with a share
of 30% of the total energy utilization (EU Energy trends to 2030, 2011). That is why
the European Union through its „Renewable energy directive‟ has made a special
requirement to achieve 10% renewable energy share in the transport sector on its
way to achieve 20% renewable energy by year 2020 (European Union Committee,
2008). Also this sector could be seen as one of the most difficult sectors to deal
with when it comes to transforming to an alternative fuel. That is because most of
the vehicles were produced and are being designed to run on conventional fuel and
therefore getting each and every individual person to change their
vehicles/engines would be an extremely difficult task necessitating long time and
perseverance. Therefore an optimum starting point would be the transformation of
large fleets, such as public transportation, to be based on renewable fuels.
As far as transportation fuels are concerned biogas is the cleanest fuel that could
be fed into a combustion engine at the moment. In order to use in a vehicle
engine, biogas needs to be upgraded to a certain quality in terms of the methane
(CH4) content and hence, the upgraded biogas is called biomethane. Biomethane is
very similar to natural gas in composition and characteristics and therefore could
be used in natural gas engines. Unlike conventional fuels, combustion of
biomethane will only produce carbon dioxide (CO2) which is carbon neutral since
biogas is produced from organic waste. Thereby the climate impact is minimized
by avoiding net input of CO2 to the atmosphere. Also the environmental impact is
reduced by lower the emissions of nitrogen oxides (NOx), sulphur oxides (SOx),
carbon monoxides (CO), Hydrocarbons (HC) and particles.
Furthermore, biomethane can be transported and stored using more or less the
same methods used for natural gas. Such availability of distribution and end user
infrastructure has made the prospects of introduction of biomethane as a vehicle
fuel promising.
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1.2 Background
Even though there are several success stories and good examples in Sweden,
having a fleet of biogas buses is not yet been widely embraced and adopted in the
Baltic Sea Region (BSR) countries.
Factors such as unawareness, lack of access to proper information and the
complications involved in the long term process of transforming into an entirely
different system, have been the primary causatives for this situation. Therefore
Stockholm Public Transport Company (AB SL) who is responsible for the public
transportation in the Stockholm area has initiated the Baltic Biogas Bus (BBB)
project, under the Baltic Sea Region program. In the BBB project twelve partners
from eight BSR countries (Sweden, Norway, Finland, Germany, Poland, Estonia,
Latvia and Lithuania) embarked on this project where AB SL is the lead partner.
The partnership offers an ideal platform for cooperation, exchange and
dissemination of knowledge, experience and technology. The partnership will
obtain a better position to negotiate with infrastructure and bus suppliers.
The BBB project aims to develop sustainable solutions on fostering entire biogas
systems consisting of biogas production, upgrading, distribution and refueling of
buses. Extended use of biogas for city buses will lower emissions, improve inner
city air quality and strengthen the role of public transport in an efficient strategy
to limit the impact from traffic on climate change. Hence the project looks
forward to generate strategies in a systems perspective in implementation and
future expansions of biogas buses in the region.
The focus of this report is to discuss, propose and recommend strategies for
implementation of biogas fuelled buses for public transportation in the Baltic Sea
Region countries. Thus, the criteria that has been followed is; evaluating the
present biogas situation in the region and the future prospects, recognizing the
value added throughout the supply chain of biomethane, defining the stakeholders
of implementing biogas based public transportation, identifying the barriers in
introducing biomethane as a vehicle fuel and finally, identifying strategies for the
successful adoption of biomethane as a vehicle fuel in the Baltic Sea Region as a
whole.
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2 Energy Balance and Drivers for Biomethane in Public
Transportation
In this chapter, the primary energy mix in Europe has been discussed first in order
to identify the composition of different energy sources and the trends of using
energy sources. Following that the driving forces of biomethane as a fuel have
been discussed and thereby the future prospects of biomethane as a renewable
fuel have been identified.
2.1 Energy Balance in Europe
It is evident from figure 1 that the use of renewable energies has an increasing
trend. However according to the European Environment Agency (EEA) the
involvement of renewable energy by 2008 was 8.4% of the total and it mainly
consists of biomass (69.7%) which is primarily represented by wood and wood
waste with a share of 67.5%. The effective share of biogas in the European energy
mix would thus be approximately 0.4% which is insignificant to recognize as a
sector with a prospective future.
Figure 1: Europe primary energy mix in 2008 (European Environment Agency, 2011 (a))
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Nevertheless it is quite evident that natural gas holds a substantial share of the
European energy mix and that it also has been growing in use over the time
compared to any other fuel. Further, according to the trend, utilization of fuel oil
has remained the same – if not declined- owing to the increasing market prices and
developing concerns on environmental issues and resultant stringent emission
standards (figure 2). Therefore it is natural gas that has been able to bridge the
gap of increasing energy demands over the last decade and which would also be
reasonable to assume to continue for a significant time ahead. Biomethane is
similar to natural gas in composition as well as characteristics, and hence would be
readily available to be used in natural gas infrastructure.
That means biomethane would be delivered (either through gas grids or in trucks)
and refilled using the same methods which are currently being used for natural gas
and would be combusted in the same way inside the vehicle engines, same as the
ones for natural gas.
Figure 2: Primary energy consumption trend in Europe from 1990 to 2008 (European
Environment Agency, 2011 (b))
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2.2 Drivers for biomethane fuel and public transport
The need for biomethane as vehicle fuel could be seen as driven by a number of
environmental, political and economic factors.
2.2.1
Climate Change
Concentration of CO2 in the atmosphere today is the highest in human history and
is still increasing, see figure 3. According to IPCC this is mainly because of
utilization of fossil fuels and deforestation. Atmospheric CO 2 causes the
greenhouse effect and hence leads the global temperature to rise. The
phenomenon is called global warming that can eventually lead to climate change.
Effects of global warming are melting glaciers, rising sea levels and changing
patterns of ocean currents while effects of climate change can be anything from
surged floods to intense droughts.
Wide use of biomethane or other renewable fuels replacing fossil fuel minimizes
these threats by keeping the net carbon emission to a minimum.
Intergovernmental Panel on Climate Change (IPCC) predicts in their scenario of
continued perusal of global economic development, that the global temperature
would rise by between 1.1-6.4 °C by year 2100.
This is substantially higher compared to the global environmental sustainability
scenario which predicts a temperature rise only between 1.1-2.9 °C. In order to
limit the increase of average global temperature to 2°C by 2100, IPCC state that
atmospheric CO2 concentrations must be kept below 400 ppm CO 2 equivalent and
the increase of atmospheric concentrations must be stopped by 2015 at the latest
(ScienceDaily, 2011). Transportation accounts for 30% of the European energy
consumption and 23% of the CO2 emissions.
Furthermore it is evident in figure 3 that it is only in the transport sector the
emission of CO2 has continually increased over the last two decades. All the other
sectors have either more or less stabilized or significantly decreased. Even though
the total CO2 emission of the EU-27 has stabilized over the period it is essential cut
down the levels in order to mitigate climate change. Therefore the best initiative
to curb the aforementioned issues of using fossil fuel would be to eliminate the use
of fossil fuel in the transportation sector.
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Figure 3: Sector wise CO2 emissions in EU-27 (European Commission, 2011)
2.2.2
Peak Oil and Security of Energy Supply
World demand of fossil fuel is steadily increasing due to hefty economic growth in
some countries, e.g. China and India. Demand is increasing while the supply, by
many, is predicted to decrease, see figure 4. According to the peak oil scenario oil
is not more than a depleting resource and the cost to extract as it depletes is
increasing. This signifies the end of cheap oil and hence the prices would keep on
escalating. Thereby entire systems are at a huge risk running out of fuel and are in
a great need of switching to alternative sources of energy. The dependency on
fossil fuel from politically unstable regions in a situation with escalating demand
and depleting supply renders the targets for stable and secure energy supply at a
great risk.
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Figure 4: Effect of peak oil on future supply and demand (ExonMobil, 2004)
2.2.3
Air Quality
Climate change is not the only environmental problem of utilizing and burning
fossil fuel. Pollution of the air has posed a great threat in different facets such as
affecting human health, endangering species, and destruction of ecosystems and
habitats. That is mainly due to the emissions of SOx and NOx and particulate
matter. As a result, stringent air emission standards have developed leading to
heavy taxes on emitters. Emissions from different fuels, - fossil and renewable vary. Emissions of sulphur and nitrogen, as well as net emission of CO2, from
biomethane are low compared to many other fuels (figure 7).
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2.2.4
Increase of Transportation and Congestion
Need for transportation is increasing daily and so does the congestion in traffic. A
sustainable solution to this matter is to increase the public transportation. Thereby
more people get to travel as well as it becomes more energy efficient.
Introduction of new buses that run on biomethane is promising considering this
problem. Materializing a pragmatic shift, from private to public transport, is one of
the most effective ways to increase energy efficiency and decrease emissions of
greenhouse gases.
2.3 Sustainability Requirement for Biofuels
Merely being a biofuel is not sufficient to make it a sustainable alternative to fossil
fuel. That means it will require qualities to match the economic attractiveness of
fossil fuel while being socially and environmentally sustainable. Thus an
alternative fuel is supposed to satisfy following requirements to sustainably
replace fossil fuel in the transportation sector.
Availability: The fuel has to be readily available as when it is needed irrespective
of the time and geographical location. It should not have to be backed up by fossil
fuels.
Economy: Investment and operation should be economical throughout the supply
chain of the fuel in order to be commercially attractive.
Security of supply: Consistency of the supply has to be ensured. It should not be
disturbed due to variations in the production or lack of adequate distribution.
Future production potential: Production of the fuel is required to have a
significant future potential, preferably at an increasing rate. That is needed to
satisfy the growing demand for energy.
Social effects of producing the fuel: Is a mandatory factor to be sustainable. It is
vital to take care of that production of a biofuel does not deter human welfare
such as food production, livelihood and homeland.
Environmental effects of producing the fuel: The production of biofuel must not
lead to environmental destruction by any means such as deforestation, land use
change, net positive CO2 emissions or increased emissions of pollutants, e.g. NO X,
SOX or particulate matter.
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2.4 Potentials for Biogas Production in Baltic Sea Region
It could be seen from table 1 that all the countries, except for Denmark and
Finland, have production potentials which are many times larger than their current
levels of production. Swedish government is showing a strong interest in producing
biogas from the farm industry. 76% of the total biogas production potential has
been estimated to come from it. This estimation also assumes that 10 % of the
present agricultural lands would be used to grow energy crops for biogas
production. Norway, being an oil rich country has not been putting considerable
emphasis on bioenergy production at the moment. Biogas production potential in
Norway comes mostly from the existing landfills. Germany leads way ahead among
all the countries in current level of biogas production as well as in future
production potential. This is due to production and high estimations of potential
from energy crops, which is not used in production and estimations for the other
BSR countries in the same scale Germany has done. The trend for biogas is
increasing at a great pace in Germany. The number of plants has grown by 54%
from 2,600 to 4,000 in just 4 years from 2005 to 2009 and the installed capacity
has grown even faster by 168% from 650 MW to 1740 MW during the same period.
However as it is today Germany is mainly producing biogas as a fuel for electricity
production (Gunaratne, et al., 2010).
Table 1: Biogas Production Potential in the Baltic Sea Region (Gunaratne, et al., 2010)
Sweden
Installed capacity
(KTOE)
79.00
Production potential
(KTOE)
892.00
As at
year
2009
% Installed capacity/
Potential
8.8 %
Norway
>38.00
> 221.90
2010
17 %
Denmark
87.30
132.40
2009
66%
Finland
62.40
87.80
2009
71 %
1 733.60
11 450.20
2009
15 %
Poland
51.40
> 429.90
2009
12%
Estonia
4.80
> 349.90
2009
1.3 %
Latvia
11.30
63.30
2009
18 %
Lithuania
> 9.30
Very high
2008
Very small
Country
Germany
The situation in Poland is special as a vast unrealized potential exists which can be
harnessed with better organization. Out of the 1759 industrial wastewater
treatment plants (WWTPs) and 1471 municipal sewage treatment plants (MSTPs),
only 46 MSTPs are involved in biogas production. Livestock industry in the country
(cattle, swine and pig farms) also accounts for a significant share of the biogas
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potential. Estonia is the country that produces the least amount of biogas in the
BSR.
Majority of the biogas production potential in the country has been estimated to
come from the landfill plants nevertheless a significantly high biogas potential
(which is not yet properly estimated) exists with regard to the waste water
treatment plants. Latvia is a country which is rich in a variety of biogas production
substrates that are spread all over the country. Plans are already on their way to
harness the unrealized biogas potential in Latvia. A very high production potential
exists with regard to the farms in Lithuania (Gunaratne, et al., 2010).
2.5 Biomethane Market Development – the Swedish Example
The market has been steadily increasing for biomethane and natural gas in Sweden
over the last decade. A total of 488 GWh of biogas has been upgraded to produce
biomethane in Sweden in the year 2009 which is 36% of the total registered biogas
production in the country. This is a 38% increase from the 2008 biomethane
production. Further it could be observed that this demand increase has taken
place while the demand for natural gas remained unchanged (figure 5). Especially
the demand in Stockholm has now increased the supply by a significant margin so
that compressed biogas has to be delivered by trucks in swap bodies from outside
to the city. Under this situation 40% of the vehicle gas sold at Stockholm has had to
be met by the natural gas back-ups in the filling stations in 2009.
Figure 5: Sold volumes of compressed biogas (CBG) and compressed natural gas (CNG) in
Sweden (Source: Swedish Gas Association)
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Buses account for the largest demand for biomethane in Sweden. Biomethane
market demand according to vehicle sectors is shown in figure 6. The largest
consumer in the Stockholm region is Stockholm Public Transport managing the
public bus transport system in Stockholm County. Today AB SL has about 2000
buses at service.
Having started the first biogas bus in operation in 2004 the fleet has now grown to
comprise 230 biogas buses buy the end of 2011 and has extensive plans for further
transformation of buses from diesel to biomethane. The owner, The Stockholm
City Council, has set up the following environmental goals.
50 % of the bus traffic within AB SL to run on renewable biofuels by 2011
The proposed goal for 2016 is 75% renewable fuels in the bus fleet
100% year 2025
The main driver for this market development has been the decisions taken by the
regional public transportation authorities and long term agreements between
public transportation authorities and biomethane producers. The drastic
development in the market for private cars and taxis has also been a contributing
factor to the sudden market development for biomethane. One of the best
examples in Sweden is the case in „Taxi Stockholm‟ which has a fleet of 1,500 cars
where 500 of them run on biomethane today. The company itself has imposed
certain environmental goals as follows to maintain their environmental
stewardship in par with the local and national targets.
Decreasing the company‟s emissions of fossil fuel derived CO 2 with 70 % from
2005 – to 2012
The percentage of environmentally classified cars was 80% by 31 December
2010 and is predicted to be 95% by 31 December 2011
Several other taxi companies in Stockholm have also got biogas cars in their fleet
and have plans to increase the number in the future. The promising fact with taxis
is that their road bound life time is so short (3-4 years), so any decisions made on
new taxis would be materialized with prompt effect. Private biomethane vehicle
market is growing in par with regard to increased awareness and individual
environmental concerns.
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Figure 6: Number of gas vehicles in Sweden (Source: Swedish Gas Association)
New technology in concomitance with the market development is now paving the
way to liquefied biogas (LBG) in Sweden. Storage in the liquefied form during
distribution provides as much as 3 times more energy per unit volume than the
CBG.
3 Factors Influencing Decision Making
Three major factors are identified in this report as of prominent importance and
high influence in the process of decision making in the implementation of biogas
based systems. They are; Climate, environmental and economic benefits of
replacing fossil fuels with biogas, Socio-economic forces acting as hindrances,
operational and environmental costs and Stakeholder interests.
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3.1 Biogas Benefits
3.1.1
Environmental Benefits
Reduction of CO2 Emissions
As opposed to natural gas or any fossil fuel, biogas is carbon dioxide neutral.
Biogas gives the smallest emissions of carbon dioxide and pollutants of all vehicle
fuels on the market today. Calculations show that replacing fossil vehicle fuels by
biogas reduces the carbon dioxide emission per unit of energy by 90% (Concave,
2006). The benefits can be doubled if biogas is produced from manure, due to the
decreased emissions of both methane and carbon dioxide. The reduction,
measured in carbon dioxide equivalents, can then be as large as 180 % per unit of
energy (Börjesson, 2007).
Public transport is a great environmental gain when more citizens choose not to
travel by car on behalf of public transportation. Further on, the use of biomethane
as fuel in the public transport sector has a large potential for great environmental
gains.
Reduction of Emissions of Pollutants
Biogas is a renewable source of energy and has many advantages as a replacement
for petrol and diesel. Biogas is classified as the cleanest fuel on the market where
the combustion of biogas only contains two products, carbon dioxide and water
vapour. There is no dust, slag or ash in the combustion from biogas. The emissions
of carbon monoxide, sulphur compounds, nitrogen oxides, heavy metals and
particulate matter are all as low or lower from biomethane then from petrol and
diesel when used as fuel in buses (Nordic Biogas Conference, 2010). Figure 7 shows
a comparison of a number of fuels with local emission on the y-axis and global
effect (CO2) on the x-axis. Biogas compared to other fuels has the lowest emission
of pollutants together with the lowest impact on the global effect.
Reduction of Methane Emissions
Methane is a greenhouse gas. In a 100 year period, its contribution to the
greenhouse effect is 21-25 times greater than that of carbon dioxide. One problem
with conventional methods of handling and storing manure is that spontaneous
emissions of methane can occur. These methane emissions can be avoided by
digesting the manure in closed chambers (reactors) where all the methane is
collected as biogas for later combustion. It is important in this context that the
digested residues are covered, since some methane can still be formed before the
bio manure is incorporated in the soil. Nowadays, the methane produced by many
landfills is collected, which further reduces losses to the atmosphere.
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Figure 7: Environmental emissions of different fuels (Strömberg, Jonas, 2006)
3.1.2
Societal Benefits
Locally Produced Biofuel as a Strategic Energy Source
Countries in the Baltic Sea region are to a large extent dependent on import of oil
based fuel and natural gas as energy supply to their transport sectors. The
increased global world demand and the peak oil scenario threaten to drive up fuel
prices. Furthermore, the fossil fuel is often imported from politically unstable
regions and thus results in an unstable and unpredictable energy supply. In order
to reduce the fossil dependence and to secure a future supply of energy and fuel a
local or regional biogas chain could be the answer. If the biomethane is produced
and utilized in the same regional area, the region could be stepping from oil
dependence to a sustainable and locally produced energy supply. Therefore one
key biogas benefit is the driving force for energy security and security of energy
supply.
The biogas market can be acting on a local level where the biogas is produced,
distributed and consumed in the same regional area. The municipal organic waste
and sewage sludge become feedstock for the biogas facility in such a system. The
local farmers can receive bio-fertilizer within the community. Local energy
companies, industries and vehicle fleets are provided with energy and vehicle fuel
through a gas grid or short distance distribution trucks.
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Regional Development and Employment Opportunities
Implementation of biogas and biomethane projects involves many local and
regional stakeholders, as seen in figure 8. The chain from feedstock to production
and utilization can involve the society at every level. Households, farmers,
restaurants, waste management companies, local and regional sewage treatment
plants, companies that produce biogas and biomethane are all needed.
Additionally, companies that distribute the gas and builds filling stations or bus
depots are needed in the biogas chain. The regional and municipal leader is also
involved in the biogas chain. Every step in the biogas chain needs its own
knowledge addition. If a biogas project is about to be started a big variety of
workers are needed in order to make up the whole biogas chain. As a consequence
new job opportunities are created in a wide range of job types, both locally and
regionally. Therefore promotion of biogas bus projects both serves as an
investment in local and regional development and additionally as a creation of new
job opportunities.
Manure and energy crops
biogas for industrial
heat and power
Sewage sludge
digestion
Organic industrial waste
Forest residues
liquefied
biomethane
Household waste
upgrading
gas grid
filling
station
vehicles
industry
household
Figure 8: Biomethane chain from waste to energy
Sustainable Waste Management
Modern society produces large quantities of organic waste which must be treated
in some way before being recycled back to nature. Examples of such organic
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wastes are sludge from municipal waste water treatment plants, kitchen refuse
from households and restaurants, and waste water from the food processing
industry.
Sustainable and efficient management of organic wastes implies that the nutrients
these wastes contain (e.g. nitrogen, phosphorous and potassium) should be
recycled to arable land as fertilizer (i.e. bio fertilizer) and that the energy the
waste contain is used within the society. From this point of view, organic solid
wastes and sewage sludge are an important resources that can be exploited in a
sustainable way.
Utilizing organic wastes in this way also reduces the amount of waste that must be
taken care of in some other way. With the help of the biogas system, the
production and consumption of food and energy from all sectors of society can be
included in a balanced re-circulation system. Integrated solutions for water,
energy and waste management will play an important role in the development of
sustainable cities. It will also play an important role in the creation of sustainable
recycling systems for energy and nutrients between rural and urban areas.
Moreover, recycling of nutrients will reduce the import of synthetic fertilizers.
Societal Benefits with Public Transport
Public transportation is a huge gain for the society when more citizens choose not
to travel by car. Public transportation makes a better use of the urban space than
a car-dominant society. One example of the urban space gained with public
transport is shown in figure 9. The figure describes that 175 m wide road is needed
to carry 50,000 people per hour per direction traveling by car, while the space
needed to carry the same number of people travelling by bus is 35 m.
Figure 9: Public transport alleviates congestion (International Association of Public Transport,
2011)
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Additionally, with fewer vehicles running in the cities is less noise as Biogas
engines emit less noise than diesel engines do. Another societal benefit with the
use of public transportation is higher urban air quality due to less gaseous and
particulate emissions.
3.2 Factors Hindering Implementation of Biomethane Projects
3.2.1
Knowledge and Skills Barriers
There is a lack of knowledge about pretreatment technology and economy in the
use of different substrate for digestion and biogas production. Furthermore,
knowledge gap exists when it come to the biogas upgrading process because it
requires sophisticated technology as well as operational specific know-how.
3.2.2
Institutional and Administrative Barriers
Even though there are no formal barriers to the new entrants in the biogas trade, a
large number of barriers can be seen in practice against the establishment of new
biogas investments. In countries where many public organizations run pilot scale
and experimental scale biogas plants, investors get exhausted and discouraged
having required turning into different places looking for information.
Some county authorities taking a long time in issuing environmental permits is
another hindrance towards new developments in general. Since biogas production
has to deal with different kind of organic waste streams, especially in co-digestion,
corporation law requires stringent sanitation conditions to be met by production
plants. This is an obstacle more specifically applicable to the biogas industry.
Ambiguities in the definition of the borders, such as gas production and
environmental emissions make the administrative part of biogas development
complicated.
3.2.3
Technological Barriers
Technology puts sharp limits to how much of the biogas production potential could
be utilized. In the Swedish example, even though forest industry and pulp and
paper industry generate a very large quantity of substrate for biogas production,
sufficient technology has not yet evolved to make it economically viable to
produce biomethane from those feedstock sources.
Gaps exist in the technology to cope with heavy metals in the digesting substrates.
Also the inability so far with the existing technology to reverse the plant nutrients
from the biogas production in the agricultural industry has been of great concern
for sustainability.
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When it comes to the upgrading stage, there are both mature and immature
technologies. Technological advancements are necessary in upgrading to increase
energy efficiency in the biomethane chain from production to refilling.
Many cryogenic upgrading technologies are in the evolving stage and liquefied
biomethane production is a new development intended towards obtaining very high
purity, nevertheless it incurs a substantial energy intensiveness and investment
cost.
3.2.4
Organizational Barriers
Barriers in this category have been recognized with regard to two main
organizations; state and corporate. State‟s role is to provide a regulatory system
that allows biogas/biomethane to compete with fossil fuels on equal terms. The
state also has to assume the responsibility of developing basic technology and
initiating the development of background for infrastructure. Organizational
barriers would usually associate with the economies of scale. Biogas is a resource
which is usually produced and consumed within a certain locality. Hence
stakeholders are usually local. However at the level of upgrading and distribution
of biomethane to refill vehicles, stakeholders often transcend beyond the local
boundaries and hence the involvement of stakeholders would become vast and
diverse. Especially at upgrading, distribution and refilling stages comprehensive
logistics management and administration costs become crucial factors that
determine the profitability. Hence economies of scale would have to be ensured at
this level of project development.
3.2.5
Political Barriers
Some political decisions themselves, taken on behalf of the environment could be
deterring the development of biomethane. National target for 10% renewable
energy in the transport sector by 2020 is an example. It could be seen as too less
ambitious so that it could be met by easily accessible renewable fuels instead of
biomethane. Also it does not make extensive provision for the adoption of
biomethane in particular.
Another main force hindering biomethane at the political level is the economic
forces such as tax income from fossil fuel. If decisions were taken to decrease the
utilization of fossil fuel by even greater levels than 10%, it would result in great
losses of tax income from the fossil fuel.
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Despite that an obsolete misinterpretation of renewable fuels as sustainable fuels
is evident at certain instances. Being renewable does not necessarily mean
sustainable. For example, a renewable fuel such as bio-ethanol already has serious
concerns over its social and environmental impacts such as unfair working
conditions for propel and deforestation. Bio-diesel which is also a renewable
vehicle fuel has issues with regard to the level of percentage CO2 reduction and
the fuel quality. Some political decisions could be seen as deliberately neglecting
these facts and going for the cheaper and convenient solution in the disguise of
fraudulent sustainability.
3.2.6
Market and Financial Barriers
Market barrier is arguably the most affecting barrier to the expansion of biogas
systems. Biogas industry is often characterized by the low profitability. That is
because of the high costs involved at each stage of the production and supply
chain; from collecting substrate, produce and upgrade biogas to distribute the fuel
to the filing station. Difficulty in finding a good market for the digestion residue is
also a problem. Poor profitability distracts the opportunities for financing a
prospective investment. Another important issue is that the financial institutions
do not have a proper basis for evaluate and assign a market value for biogas
plants. This renders the trading so vague and obtaining loans for investment
difficult. Inadequate availability of investment support for biogas production is
also a significant barrier.
Lack of infrastructure to make biogas available to the end user is of significant
concern in order to promote biogas. Capacity of upgrading plants has been always
inadequate to match the biogas production and extensive network of gas
pipelines/delivery vehicles and refilling stations is required to distribute biogas to
the end user.
3.3 Economics of biogas
Costs related to using biogas as transport fuel can be divided into financial costs
and socioeconomic costs. The financial costs can be further divided into
investment costs and operational and maintenance costs.
There are investment costs in all parts of the supply chain; production, distribution
and bus use. Especially distribution costs depend partly on existing infrastructure
and location of production site. Already existing pipelines designed for natural gas
can help lower this cost significantly, since investing in new pipelines is expensive.
Investment in actual buses is still higher for biogas buses than for common diesel
buses. However, the difference between the two has decreased as the prevalence
of gas buses on the market has increased.
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Also operational and maintenance costs are higher for biogas buses than for diesel
buses. However, the Stockholm experience shows a clear and steady decrease in
these costs for biogas buses. The positive economic development over time is
partly due to new gas buses having more efficient engines, but an even more
important factor is the improved user knowledge among drivers and service staff,
which has been gained throughout the years. Since the popularity of gas buses is
on the rise, one can make the assumption that future production will increase and
lead to even more efficient engines.
Not counting for expenses related to distribution, the financial costs for using
biogas as transport fuel are close to those for diesel. However, with increasing
scarcity of fossil fuels, biogas will be even more competitive. Already today,
biogas producers can guarantee a future price of their product in a way unrivaled
by any diesel producer.
Even though biogas can compete with diesel already today regarding financial
costs, the major advantages are related to the socioeconomic costs. The major
part of the socioeconomic costs are environmental costs, which mainly consist of
costs for emitting CO2, particulates and NOx. These are generally difficult to
quantify in monetary terms. Additionally, the environmental impact of many
emissions is mainly local and therefore depends on the quality of the surrounding
air. Emissions also often have a direct impact on human health, which means that
densely populated areas gain relatively more from changing from diesel to biogas
driven buses than sparsely populated areas. The same argument holds for the
reduction of noise resulting from shifting to biogas; the impact is bigger the more
people are positively affected by it. When taking both financial and environmental
costs into account, using biogas as transport fuel stands out as more competitive
Total cost comparison between diesel and biogas
1300
SEK/100km
1200
Environmental
Infrastructural
Operational
1100
1000
900
800
Diesel
Biogas
than diesel.
Apart from the environmental costs, there are other benefits from substituting
diesel for biogas, such as improved employment opportunities and increased
energy autonomy.
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3.4 Procurement rules
Procurement in Sweden is regulated by the law on utilities procurement, which is
based on EU-legislation. All procurements must comply with the basic principles of
equal treatment, non-discrimination, transparency, proportionality and mutual
recognition.
More specifically, different rules apply depending on the value of the contract to
be procured. There is a threshold of EUR 412 000 (year 2010), which determines
what options are available for the contracting entity.
If the value of the contract is above the threshold, there are three different
procedures to choose from; open procedure, restricted procedure and negotiated
procedure. For all procedures, the contract must be publicly advertised, but the
negotiated procedure provides a possibility to enter into negotiations with
providers, which is not possible when using the other two procedures. Thanks to
the higher degree of flexibility, the negotiated procedure is popular when the
value of the contract is above the threshold.
If the value of the contract is below the threshold, there are also three different
procedures to choose from; simplified procedure, selective procedure and direct
procedure. The first two procedures both require that the contract be advertised,
whereas when using the latter procedure, the two parties can enter into contract
negotiations directly. However, using the direct procedure requires extraordinary
circumstances. Thus, when the value of the contract is below the threshold, in
most cases either the simplified or selective procedure is applied.
3.5 Stakeholders in Biogas Chain
At foremost, major stakeholder in the biogas chain are found within the chain
itself. Waste treatment companies which are providing feedstock is often found on
county and municipal level. They provide a feedstock consisting of organic waste,
for example, source sorted municipal solid waste. Another feedstock provider is
the municipal wastewater treatment plants. The wastewater treatment plants,
additionally to their core process, can supply both feedstock and produce biogas.
Another important group which provides the biogas chain with feedstock is the
farmers. Manure, other residuals waste and energy crops are example of feedstock
coming from farmers. Food industry companies and slaughterhouses within
production of meat, charcuterie, dairy, ready-cooked food have waste which also
is suitable for biogas production.
Biogas production plant owners which are not feedstock supplying stakeholders,
are often energy companies, private or public, municipal or publicly owned
companies involved in either waste or waste water treatment and management or
companies whose core product is biogas production. Swedish examples of larger
energy companies involved in producing biogas and biogas upgrading is E.ON Gas
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Sverige (private) and Göteborg Energi (public). Publicly owned companies are, for
example, Stockholm Water AB and Käppalaförbundet. Examples of private owners
and operators in the Stockholm region are Scandinavian Biogas and Fuels and
Swedish Biogas international.
Next link of the biogas chain is distributors. Distribution can be done both in
compressed gaseous form and in liquefied form. Stakeholders in this part of the
chain are often private companies involved in distribution of fuels and sale to end
users.
In Stockholm is AGA a good example. The final link in the chain is the filling
stations and the end users. Usually biomethane distribution companies and public
transportation companies have their own filling stations or act together with
established vehicle fuel selling companies such as Statoil and OKQ8.
It is equally important to recognize the important stakeholders who are not
directly attached to the supply chain. Two significant stakeholder groups are
identified in that aspect. First it would be the political stakeholders, i.e. decision
makers. The political stakeholders are one of the most influential and important
stakeholder groups in a biogas bus project and often act as the final decision
makers. Decisions to promote biogas bus project can be made at different political
levels, i.e. international, national, and local. A second group is nonetheless of
equal significance. That is the general public. General public can be of great
interest in a biogas bus project in two main perspectives. That is as employees
working in the biogas supply chain as well as the end users. Categorizing further,
end users can be users of public transportation, such as AB SL, as well as owners of
private biomethane fueled vehicles. Figure 10 depicts the biomethane supply
chain, where different stakeholders get involved.
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Feedstock
Biogas production
Up-grading
Distribution
End users
Agricultural waste
Sewage sludge
Biodigestion
CNG
Public transport
Grid/Pipeline
Compressor
Private sector
Upgrading
Municipal waste
Energy crop
LCNG
Pretreatment
Liquefaction
Bulkstorage
Vaporizer
Fertilizers
Agriculture
Figure 10: The biomethane chain, from feedstock to end users
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4 Policies and Strategies
In this chapter the emphasis is given to policy approaches that can be taken at
different stages spanning from International level to local level. Figure 11, below,
show the policy landscape where policies are formed at international, national and
regional level. These policies outline visions and targets for dimensions as the
energy sector, waste management, development of new technology and innovation
and new enterprise. Biogas bus projects are related to many different dimensions
and the targets emanating from the policies concern different parts of the biogas
bus system. In order to reach those targets and objectives relevant strategies have
to be implemented. Hence, various political policies, targets and strategies are
discussed.
Figure 11: Overview of policy and strategy contextual in a biogas system project (Nelson
Rojas, HOG Energy, BBB presentation in Riga 2012)
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4.1 Policies and long Term Targets at International Level
4.1.1
Policies and Political Targets
The most important factors that determine the formation of national strategies are
the policies or political targets at both international and national levels. Policies
and targets can be formulated to reduce the environmental emissions by a certain
quantity, to reduce the energy consumption by a certain sector or to increase the
energy efficiency in a certain sectors by a certain point of time in the future.
These targets have to be ambitious enough to drive a real change and, most
importantly, should be adhered to irrespective of the political.
Kyoto Protocol
The Kyoto Protocol is the starting point for the development of many of the
political targets regarding climate change. Kyoto protocol is the protocol to the
United Nations Framework Convention on Climate Change (UNFCCC) aimed at
combating global warming. Having adopted in 1997, the protocol came into force
in 2005. Thus the countries ratified agreeing to reduce the CO2 emission by 5.2% on
average from the levels of 1900 during the 5 year period 2008-2012. The emission
reductions do not contain the international aviation and shipping. Nonetheless it
requires more percentage contribution from the 37 industrialized countries
towards achieving the target.
Two Degrees Celsius
United Nations‟ Inter Governmental Panel on Climate Change (IPCC) projected in
mid 1990s an “upper ceiling” to the extent of global warming in order to avoid
devastating climate impacts. That is 2°C maximum increase from the pre
industrialization era. The target will thereby mean stabilizing the atmospheric
greenhouse gases at a level of 445 – 490 ppm CO2 equivalents. The contribution of
CO2 alone at this level would be 400 ppm. The target has been thus set to a CO 2
emission of 1000 billion tons over the period from 2000 to 2050, of which one third
has already been emitted. The target expects to limit the probability of exceeding
the 2°C threshold to 25% (ScienceDaily, 2011). The IPCC now announces that the 2
degrees limit is too modest and any new climate deal should identify 1.5 °C as the
ceiling.
Twenty Percent Renewable Fuel (20-20-20)
European Union being the supreme international organization in Europe has,
through its renewable energy directive, imposed an environmental target of
achieving a 20% share of renewable energy in the energy mix of the member states
on average by the year 2020. However this figure is to be achieved on average
where highly ambitious countries such as Sweden has very high level targets (50%
by 2020) while other countries are given with much mild targets considering the
level of their economic capability.
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Ten Percent Renewable Fuel in Transportation (10-20-20)
At the same time the renewable energy directive require specifically the transport
sector of all its member states to reach 10% renewable energy share of the total
energy consumption in the sector. However, only the road transportation would be
subjected to the above requirement.
Twenty Percent Energy Efficiency (20-20-20)
Another appealing target has been developed by the EU towards achieving its
energy and climate goals under the energy efficiency plan, as a part of the Europe
2020 initiative. That is to save 20% of the primary energy consumption compared
to projected levels by 2020. Substantial steps have been already taken in the
buildings and appliances sectors. The potential therefore exist in order to use the
transportation sector as a major contributing factor to the achievement.
Carbon Neutral Society and Vehicle Fleet Adoption to Renewable Fuels
Despite the targets imposed by international bodies, countries may also develop
their own targets at the national level. A profound example would be the Swedish
commitment to achieve carbon neutrality by year 2050. Simultaneous to the
carbon neutrality target Sweden has also required its entire vehicle fleet to be
adopted to run on renewable fuels by year 2030.
Waste Management Targets
Political targets could also be set as a part of national waste management
strategies so that biological treatment, or specifically biogas production, will be
indirectly or directly stimulated. In Sweden the national target on biological
treatment is set to 35%, meaning that at least 35 % of the food waste must be
collected and treated biologically, i.e. digested or composted.
Environmental Programs at County Levels
A good example on county level environmental program is the stepwise program
set by Stockholm County. By it‟s politically declared environmental program the
county has reached a higher level of environmental adaption. In congruence, AB SL
has their target to operate 50% of their buses on renewable fuels.
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4.2 Strategies at International and National Level
4.2.1
Economic Strategies
Fiscal Tax, CO2 tax on Fossil Fuel and Tax Exemption or Tax Reduction on
Renewable
Production cost of fossil fuels is extremely competitive compared to that of
renewable fuels. Therefore an imperative economic approach to adopt renewable
fuels is to inflict a fiscal levy on fossil fuel and fossil fuel vehicles. Effect of fiscal
tax on conventional fuel price in Sweden can be seen in figure 12. Compensation
to the environmental damage could be claimed via enacting a CO 2 tax on fossil
fuels which creates a direct motivation within the societies towards renewables.
Sweden has already embarked on this strategy, which has led to a lot of
developments towards using renewable fuels and reducing vehicle emissions.
By concurrent tax exemption or deduction renewable fuels could be made
competitive. Having the same strategy on vehicles that is adapted for use of fossil
fuel only or adapted for renewable fuels can have a direct influence over the
market demand for renewables.
According to the European Commissions
suggested changes in the Energy Tax Directive (2003/96/EG) tax exemption for
biomethane may be permitted to 2023.
Pollution Tax
Due to differences in emissions of pollutants, e.g. carbon monoxide, sulphur
compounds, nitrogen oxides and heavy metals, from different fuels their impact on
health and costs for society differs. A measure to compensate for the fuel specific
pollutions could be a tax or different taxes for specific pollutants. Another
measure is to vary the fiscal taxes in relation to the fuel specific pollution. As
biomethane is classified as the cleanest fuel on the market, taxes on pollution
from fuels would be beneficial for implementation of biomethane.
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Figure 12: Diesel price development in Sweden from 2001-2010 (Source: Swedish Petroleum
Institute)
Investment Support and Soft Loans for Investments in Renewable Fuel Projects
Encouragement of investment from different stakeholder, e.g. municipalities,
private entrepreneurs, in biogas systems should also be addressed by the decision
makers at policy and strategy level. Direct support for investments could be given
by the state via sharing the investment.
For example has the Swedish state earlier shared 30% of the total capital
investment in biogas projects? Arrangements of a proper framework to finance
biogas investments via soft loans may also be of immense importance.
4.2.2
Regulatory Framework
This refers to the legal and administrative strategies executed with the intention
of nurturing biomethane. Regulatory approach of changing a system can have both
direct and indirect influences over the system in focus depending on the strategies
involved. Regulatory strategies would thus primarily comprise of policies and
standards.
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Accessibility of Biomethane into Gas Grids
A prominent policy that can be formulated towards the betterment of biomethane
would be the provision of equal access to gas grids with natural gas. The EU
renewable energy directive requires this and it is a major breakthrough in the
infrastructure aspect of biogas. That is because lack of an established
infrastructure system has deprived biogas from effectively reaching end users and
hence being of value.
Green Gas Concept
A recent development in Sweden concerning the accessibility of biomethane into
natural gas grids is the „green gas concept‟. According to this concept biomethane
would be traded between two gas grids which are not physically connected.
Instead, a customer who is connected to a certain gas grid may order biomethane
(green gas) and subsequently gets discounted prices. The gas that he actually
consumes should not necessarily be biomethane. It can be a mixture of
biomethane and natural gas. It is the contract for biomethane that makes him
eligible to get the special price. Therefore if the gas grid does not have enough
biomethane in it to cater the customer‟s requirement, the supplier has to ensure
that the remaining quantity of biomethane ordered by the particular customer has
been injected to a gas grid elsewhere and been accounted for. That is the
necessary requirement of this concept. Thereby, biomethane is traded as a virtual
commodity between two physically detached gas grids (figure 13).
Figure 13: Green gas concept
Ratio Demand
Another important strategy proposal that been proposed at EU level and by some
EU members is to demand a certain renewable energy ratio from the suppliers of
vehicle fuel. However, this kind of a measure must ensure that different types of
renewable fuels are given an equal opportunity and that the sustainability of the
renewable fuel is considered as a prominent factor in deciding its ratio.
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Fuel Quality Standards
Implementing standards for fuel quality is an important step in this aspect.
Similarly to the standards that require certain level of purity in fossil fuels,
biofuels too should also be administered. As an example, in Sweden biomethane
should contain 97% methane while the sulphur content has to be less than 23
mg/Nm3.
Vehicle Emission Standards
Standards for emissions from vehicles are as equally important. The standard may
allow the vehicles to undergo an emission test and obtain an annual certificate
which would be made mandatory in order to enter public roads. Vehicles that fail
the test can be allowed for a re-test having done the necessary modifications to
the engine. Figure 14 illustrates the development of European emission standards through Euro 1 to Euro 6 - for nitrogen oxides (NOX) and particulate matter (PM)
for new vehicles within the region. The performance of a particular bus when run
on different fuels has also been shown for the purpose of comparison.
Figure 14: Development in European emission standards for buses (Nylund, Nils Olaf, Nordic
Biogas Conference, 2010)
Having started in 1992, Euro I had very modest standards that allowed about 14.5
g/km of NOX and 0.65 g/km of PM. The latter could not be shown in the figure due
to the issue of scale. With the increasing climate impact the thresholds were
subsequently revised (obviously becoming more stringent) a number of times over
time and Euro V was developed in 2008 which stipulates 3.6 g/km of NO X and 0.035
g/km of PM. Therefore from Euro I to Euro V, it is a four times reduction in the NOX
emission and twenty times reduction in the PM emissions in 16 years.
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The latest development Euro VI is on the way to be implemented in 2013 which
requires far rigorous standards with less than 0.8 g/km NO X emission and 0.02
g/km PM.
4.2.3
Competence Development and Knowledge Dissemination
Research and Development
In order to establish biomethane systems it is essential to develop the human
resource in that field. Adoption of a solid research and development culture is
therefore identified as necessary to develop the competencies. In that way
innovations can be brought into the existing system. Thereby means and methods
would be developed to overcome the technological difficulties the industry is
facing today and have a more energy efficient and environmentally sound
production and upgrading technologies.
Shared Learning
Sharing of the knowledge gathered in different projects is as equally important to
have a nationwide competency development.
Biogas Database
Performing nationwide surveys to establish a proper biogas database that has all
the substrate, production, upgrading, distribution and refilling information is also
of great significance in facilitating a comprehensive knowledge development
strategy.
Social Awareness
Strategies to increase the general social awareness of the environmental problems
the world is facing and the role of renewable energy in general and biogas in
particular as a part of the solution are also highly important. Several methods such
as television advertisements, distributing printed information, public seminars and
activities and theme parks.
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4.3 Strategies at Regional and Local level
4.3.1
Collective Involvement of Citizens
This has to be done at both corporate level and social and individual level in order
to successfully implement biogas systems.
Corporate Level
Local authorities can get into agreements with major transportation organizations
in the locality such as bus companies and taxi companies. That is because a subtle
change in these corporations can stimulate a significant change in the local system
as a majority obtains the services from them. The agreements may therefore be on
maintaining a certain level of environmentally friendly vehicle fleet, policies on
future vehicle procurements, etc.
Individual Level
A paradigm shift in a society could also be started by driving individuals to change.
Incentives such as discounted rates for environmental selections in travelling, a
point scheme that values the extent of environmentally friendly travelling in public
transportation, where the points can be redeemed in buying new travel tickets,
free parking for eco-cars, etc. Free car parking at the city limit for passengers that
use public transportation to enter the city is also a very promising strategy to cut
down the environmental impact and encourage the use of public transportation in
general. This strategy is been successfully practiced by AB SL for the passenger
entering into the Stockholm city.
4.3.2
Centre for Knowledge in Biogas
Estimation of Biogas Production and Potential
This is a vital starting point in starting a biogas culture in the locality. Accurate
estimations on current levels of biogas production would help in developing short
term biogas plans. Unrealized biogas production potential is also very important in
order to formulate strategies and provisions for long term advancements of the
biogas systems.
Deploy Biomethane Coordinators
The role of coordinators is essential in maintaining the accuracy and consistence of
the above strategy of estimating biogas production and potentials. Despite that
coordinators may also represent a three-way link between biogas producers,
investors and local administration. They would thus act the role of communicators
between these three aspects as well. Thereby they would be a key factor that
ensures the smooth functioning of the biogas system in the region.
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4.3.3
Stakeholder Involvement in Decision Making
Consider Interests of All Stakeholders
Different stakeholders will have different interests in implementing a biogas
system in the region. It is the responsibility of the local authorities to summon all
of them to a common forum to obtain their viewpoints as a part of the decision
making process. Hence, the different interests should be addressed in the
decisions made. Thereby the ownership and loyalty could be built within the
stakeholder towards the project.
Conflict Management and Prioritization
It is also the task of the local authorities to manage any conflicts of interests
between stakeholders. Issues will have to be prioritized in making decisions at the
discretion of the betterment to the local system.
5 Developing Strategic Action Plans
This chapter consists initially of a brief discussion of the prominent factors
determining the effectiveness of a strategic action plan from the perspective of a
prospective investment project in biogas systems to run public transportation.
Then it is followed by a detailed description of the proposed strategic action plan
for such an investment project.
Figure 15 presents a classification of different factors that influence decision
making across the supply chain of a biogas based public transportation system.
5.1 Deterministic Factors of an Effective Strategic Action Plan
There are a number of important issues that should be recognized and addressed
prior to commence with a public transportation system based on biomethane
fuelled buses. Certain elements would have to be satisfied in order to ascertain
the sustainability of the adopted biogas supply chain.
5.1.1
Environmental Concerns
Production and utilization of biogas and biomethane have several positive
environmental effects. One of the most desirable aspects is the closing material
and energy loops which signify the industrial analogy of the natural phenomena.
Further it provide other positive contributions such as an alternative to the use of
non-renewable energy which implies avoided environmental emissions, means of
avoiding methane release to the atmosphere via natural waste.
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Undesirable aspects of having biomethane systems in an environmental perspective
would the possible land use for implementing biogas generation and upgrading
plants (this would however be counteracted by saving land otherwise would have
to be used as landfills), aesthetic disturbances to the land scape and bad odor.
5.1.2
Economic Aspects
Fostering biogas systems would generate an opportunity to turn waste, which has
only been an economic burden, to a source of income. New employment
opportunities that stimulate the local market would also be of considerable
significance. However the initial investment in biogas systems is often high.
Therefore accurate planning and budgeting is essential to attract investments.
Moreover, supported by monetary intensives such as tax exemptions, investment
support and soft loans by the government is significant economical promotions for
biomethane and biogas bus projects. Yet, the low operation costs could possibly
bring down the pay back periods of the investment to attractive figures.
5.1.3
Reliability and Durability
Product quality of the biogas upgrading plants would be of foremost importance
with regard to the reliability of biomethane systems. According to the Swedish
standards biomethane has to have 97% ±1 purity with respect to the methane
content. Ensuring safety along the entire supply chain (biogas production,
upgrading, distribution and refilling) is as equally important. Durability is highly
significant in biogas systems as in any other investment in order to penetrate into
the market as well as to guarantee healthy returns via reduced maintenance cost.
Further, long term stable contracts regarding both supply of feedstock and
depletion of biomethane to end users together with long turn stable conditions
regarding to taxation and regulations is of uttermost significance for the
implementation of biomethane and biogas bus projects.
5.1.4
Obligations/Liability
Obligation primarily exits with making the stakeholders contended and maintaining
consistency of the flow within the biomethane supply chain. Therefore at each
stage of the supply chain the interests of different stakeholders will have to be
well taken care of. In order to ascertain a regular flow of biomethane from
production to refilling, backup systems is necessary to compensate for any
foreseeable or unforeseeable shortage at each stage. Natural gas is often used as
back-up during shortages in biogas or biomethane supply and delivery trucks or
LNG storage facilities should be available.
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Biogas production
and upgrading
Environment Concerns
Economic Aspects
Reduced methane
emissions from feedstock
Closing the material and
energy loops
Odor
Methane emission
Accessible budget
Prospective investors
Opportunity cost
Government incentives
Attractive returns
Employment
Reliability and Durability
Fuel quality
Consistency of
production
Robust technology
Distribution of
biomethane
Energy efficient grid
transport
Air emissions from truck
distribution
Fossil fuel usage in truck
distribution
Distance
Quantity
Difference of investment in
pipeline and trucks
Pipeline life time
Depreciation of trucks
Level of hazardousness
Permits
Refueling stations
Energy consumption in
compressing the gas
Methane emission
Build new or add to existing?
Private or public station?
Provisions to increase
capacity
Build new or add to
existing?
Slow fill or fast fill?
Permits
Safety in storage
Operating biogas
buses
Reduced usage of fossil fuel
Reduced CO2 emissions
Reduced emission of
pollutants
Reduced noise
Engine modifications
Difference in fuel economy
Government incentives
Maintenance cost
Energy efficiency
Fuel efficiency
Maintenance
Robust technology
Permits
Obligations/Liability
Stakeholders
Security of
feedstock and
biogas supply
Safety issues
Permits
Stakeholders
Safety issues
Permits
Backup system
Stakeholders
Safety issues
Permits
CNG or LNG backup
Stakeholders
Back-up buses
Safety issues
Permits
Figure 15: Factors to be considered in formulating strategies to implement biomethane fuelled buses for urban transportation
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5.2 Proposed Strategic Action Plan for Biogas Bus Projects
The strategic action plan is concisely illustrated in figure 16.
Need Identification
Following issues have to be carefully analyzed in order to identify the requirement
of having biogas fuelled buses as a part of the solution.
Problems and weaknesses in the transportation sector such as congestion and
insufficient number of buses
Specific problems of conventional fuel based transportation such as climate
issues, environmental degradation and health issues due to air emissions
Interests of stakeholders of a prospective biogas bus project. The stakeholder
analysis done in this report would be used to do a comprehensive study with
regard to the particular case.
Draft a Preliminary Plan
Having accurately identified the needs and possibilities for biogas fuelled public
transportation project a preliminary plan could be draft for initial approval.
Involvement of stakeholders is crucial at this point. Findings at the previous
stage can be used to convince them the necessity of this project. An
approach to cater to the needs of all stakeholders would be ideal, which is
impractical in most cases.
Prioritizing of needs would therefore become necessary. However means of
achieving consensus among different parties on the proposed plan is vital.
Obtaining approval for the devised plan from the authorities would then
follow. Presentation of issues identified before and the means of resolving
them through a biogas bus project is necessary at this stage.
Data and Information Collection
This is one of the most important and the most comprehensive tasks of the
project. Data will have to be collected in a number of aspects.
Estimating the current biogas production levels and upgrading capacities
would be the starting point. Availability of substrates for biogas production
and availability of upgrading technologies is needed to be assessed.
Estimating the unrealized biogas production and upgrading potential should
also be done at this point. It is necessary in planning for future development
strategies.
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Next step would be to estimate the current capacities of biogas distribution.
Access to natural gas grids, availability of biogas injection facilities and the
availability of distribution trucks for compressed biogas as well as liquefied
biogas have to be accurately estimated.
Market Analysis
This is a mandatory step before embarking on the project.
Development of biomethane demand has to be analyzed following the
investigation on production and distribution infrastructure. Thorough analysis
on the market development so far and accurate forecasting on the future
prospects is necessary in order to determine factors such as economic
feasibility and scale of operation.
Analysis on the factors that can have a significant influence over the market
demand will also have to be analyzed prior to decision making. Some of the
prominent factors are; government regulations on promotion of renewable
energies, political strategies on sustainability, and public awareness.
These factors together with factors hindering development of biogas have
been extensively discussed previously in this report. How to deal with these
issues are extensively discussed under different strategies for
implementation.
Revising the preliminary plan
Feasibility of the preliminary plan has to be revised with the aid of
information and data obtained.
Preliminary plan should be revised with the aid of the results in market
analysis.
Then approval should be obtained for the revised plan.
Implementation
After developing the revised plan everything have to be prepared for the
implementation phase.
Adherence to the budgets is very important in biogas projects because they
are not as commercially attractive as many other renewable energy projects.
Keep pace with the time plans is as equally important so that the cash flows
are not affected. This is important because payback periods in biogas
projects are long by nature and therefore initial lapses in the project
progress will cause undue losses to the investment.
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Issues that were not accounted for beforehand can arise during the
implementation of the project. Such issues might mandate immediate
adjustments in the project implementation. In that case prompt steps will
have to be taken to revise the project progress and approval shall be taken as
necessary for any modifications.
Post implementation issues
Consequences of this type of a project could be expected as well as unforeseen.
Preparation to deal with these issues is necessary as much as the implementation
does.
Inconsistency along the supply chain is the most usual problem of operating
biogas systems. Seasonal variations of the availability of the substrates are a
common problem and therefore should have addressed during the planning
stage.
Interruptions in the distribution systems can be unforeseen. Therefore having
accurate backup systems and adequate contingency plans is essential to
ensure the consistent supply of the fuel for buses.
Future Expansions
Planning for future expansions would require substantial inputs from the prior
studies; especially with regard to the production potential of biomethane and the
market analysis. Furthermore, adequate provisions shall be allocated in the
planning budgets for prospective expansions of the projects in the future. Such
expansion projects will thus start over with the very strategic plan, hence closing
the loop.
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Figure 16: Schematic description of the proposed strategic action plan
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6 Recommendations
6.1 Recommended Strategies
6.1.1
General recommendations:
Use the best available technique of today, don‟t wait for the “perfect”
solution to come.
Follow the development of new technical solutions and engage in projects
and/or procurements to help new solute on to develop.
Long term contracts that make it possible for producers to invest in biogas
production.
Success factor: Important to increase the knowledge of biogas as a
renewable fuel.
6.1.2
Economic Strategies
The economic strategies for promotion of biogas and biogas bus implementation
described in chapter 4 may all be of importance. One of the strongest trigger for
biogas bus projects are the impact of fossil fuel on climate change. Furthermore,
the key factor that separates renewable fuels from fossil fuels is the CO 2 neutrality
or the ability to significantly reduce CO2 emissions.
Consequently, the most important economical measure or strategy is the
implementation of CO2 tax on fossil fuel.
In order to further promote renewable fuels and strengthen its competitive
power fiscal tax on fossil fuels in combination with tax exemption or tax
deduction for renewable is identified as an effective and important
strategy.
Investment support and soft loans for investors in biogas project have I
Sweden been proven to be an effective strategy for promotion of biogas
and biomethane production and biogas bus projects.
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6.1.3
Regulatory Framework
Considering the focus of the Baltic Biogas Bus project three strategies have been
identified as of prime significance among the many identified earlier in this report.
That is;
Establishing adequate vehicle emission standards.
Ensuring the accessibility of biomethane into natural gas grids.
Adopting the green gas concept.
Establishing stringent emission standards for vehicles that fossil fuels can hardly
meet would inevitably demand cleaner fuels. Providing equal access for
biomethane in gas grids is vital in ensuring an economical and adequate supply of
the fuel. Nurturing the green gas concept that facilitates virtual trading of the fuel
between physically detached gas grids makes buying biomethane a smooth process
for the customer and hence makes it easy to penetrate into the market and
develop an established market niche.
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