business plan biogas 300 kw

Biogas Production Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Green & Eco-friendly

Are you about starting a biogas company? If YES, here is a detailed sample biogas production business plan template & feasibility report you can use for FREE .

If you are looking for a green energy business to start, a business that can easily get support and even funding from the government, then one of your options is to start a biogas production company . Biogas is a good substitute for the conventional gas. It is a renewable fuel that doesn’t pollute the environment.

This renewable energy can be used for heating, electricity, and many other operations that use a reciprocating internal combustion engine.

Starting a biogas production company is capital intensive and it also requires serious planning and hard work but the fact remains that it is indeed a profitable business to go into and it is still very much open for more investors to come in. Below is a sample biogas production business plan template that will help you successfully launch your own business.

A Sample Biogas Production Business Plan Template

1. industry overview.

Biogas is the combination of gases produced by the breakdown of organic matter in the absence of oxygen. Biogas can be produced from raw materials such as agricultural waste, manure, municipal waste, plant material, sewage, green waste or food waste.

Biogas is a renewable energy source. Compressed biogas is becoming widely used in Sweden, Switzerland, and Germany. Biogas can be used for electricity production on sewage works, in a CHP gas engine, where the waste heat from the engine is conveniently used for heating the digester; cooking; space heating; water heating; and process heating.

If compressed, it can replace compressed natural gas for use in vehicles, where it can fuel an internal combustion engine or fuel cells and it is a much more effective displacer of carbon dioxide than the normal use in on-site CHP plants.

Biogas production business is a subset of the Biomass Power industry and businesses in this industry operate electricity – generating facilities using biomass (e.g. agricultural byproducts, landfill gas and biogenic municipal waste). Establishments engaged in operating trash disposal incinerators that also generate electricity are classified in the Waste Treatment and Disposal Services industry.

The Biomass Power industry is a thriving sector of the economy of countries like Germany, Japan, China, South Korea, France, The United Kingdom and the united states of America. In the U.S., the industry generates over $908 million annually from more than 122 registered and licensed biotechnology companies (biogas production companies inclusive.

The industry is responsible for the employment of over 1,397 people. Experts project the Biomass Power industry to grow at a 0.8 percent annual rate between 2014 and 2019. Progress Energy is one company with the a market share of the market in the United States of America.

A recent report published by IBISWorld shows that the Biomass Power industry has grown slowly over the five years to 2019. The industry’s expansion has been propelled in part by several federal renewable energy tax credits that encouraged the use of biomass power.

Furthermore, the majority of states have enacted renewable portfolio standards (RPSs), which require local utilities to generate electricity from renewable power as a percentage of their total energy portfolio. Increased campaigning for green technology also influenced industry performance by sparking interest in technologies that replace pollutant-generating energy sources, such as coal and gas.

Some of the factors that encourage aspiring entrepreneurs and investors to start a biogas production business is the fact that the market is growing rapidly in the United States and it is not seasonal.

That makes it easier for entrepreneurs who are interested in the business to come into the industry at any time they desire; the entry barriers might be high but any serious minded entrepreneur can comfortably raise the startup capital even if it means collecting loans from the bank.

The Biomass Power industry is a green and highly profitable industry and it is open for entrepreneurs to come in; you can choose to start on a small scale by producing and supplying at a community level or you can start on a large scale with distribution networks spread across key cities all around the United States of America.

2. Executive Summary

Green Gas® Biogas Production Company, Inc. is a licensed biogas production company that will be involved in the production and distribution of biogas to retailers, industries, and households. We have been able to lease a production facility that is a perfect fit and the facility is centrally located in North Platte – Nebraska.

Green Gas® Biogas Production Company, Inc. will produce and supply biogas and other biofuels to end users at affordable prices.

There is growing interest in biomass power especially biogas and new enterprises are springing up, which is why we spent time and resources to conduct our feasibility studies and market survey so as to offer much more than our competitors will be offering.

We have robust distribution network; strong online presence and our distributors are armed with the various payments of options available in the United States.

Beyond the distribution and supply of biogas, our customer care is going to be second to none in the whole of North Platte – Nebraska and our deliveries will be timely and highly reliable. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they patronize our products.

Green Gas® Biogas Production Company, Inc. will ensure that all our customers are given first class treatment whenever they order biogas and other biofuel from us. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large our customer base and distribution network may grow to.

Green Gas® Biogas Production Company, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Green Gas® Biogas Production Company, Inc. is a family business that is owned by Sutton Jones and his immediate family members. Sutton Jones has a B.Sc. in Microbiology and MSc. in Biotechnology, with over 15 years’ hands on experience in the biomass power industry, working for some of the leading brands in the United States.

3. Our Products and Services

Green Gas® Biogas Production Company, Inc. is in the Biomass Power industry and we will be involved in the production and distribution of quality and safe biogas and other biofuel products. We are in the Biomass Power industry to make profits and we will ensure that we do all that is permitted by the law in the United States to achieve our business aim and objectives.

4. Our Mission and Vision Statement

• Our vision is to be listed amongst the top 5 biogas production companies in the whole of the United States of America.
• Our mission is to establish a biogas production plant and supply business that will distribute quality and safe biogas at affordable prices to retailers, and industries in North Platte and other cities in and around Nebraska where we intend marketing our biogas and other biofuel.

Our Business Structure

Green Gas® Biogas Production Company, Inc. does not intend to compete at the local level; our intention of starting a biogas production company is to build a standard company in North Platte – Nebraska. We will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We want to put modalities in place that will guide us in hiring people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions that will be made available at Green Gas® Biogas Production Company, Inc.;

• Chief Executive Officer (Owner)
• Production Manager
• Human Resources and Amin Manager

Merchandize Manager

Sales and Marketing Manager

• Accountants / Cashiers
• Customer Services Executive
• Drivers / Distributors

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results;
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Accountable for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.

Production Plant Manager

• Responsible for overseeing the smooth running of the biogas production plant
• Part of the team that determines the quantity and quality of biogas and biofuels that are to be produced
• Maps out strategies that will lead to efficiency amongst workers in the plant
• Responsible for training, evaluation and assessment of plant workers
• Ensures the steady flow of raw materials to the plant and easy flow of finished products through wholesale distributors to the market
• Ensures that the plant meets expected safety and health standard at all times.
• Responsible for using space and mechanical handling equipment efficiently and making sure quality, budgetary targets and environmental objectives are met
• In charge of  using and coordinating automated and computerized systems where necessary
• Accountable for producing regular reports and statistics on a daily, weekly and monthly basis
• Ensures that proper records of biogas and other biofuel products are kept and warehouse does not run out of products
• Controls biogas supply inventory
• Supervises the workforce in the production floor.
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Responsible for the purchase of biogas and other biofuel products for the organizations
• Ensures that the organization operates within stipulated budget.
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information are supplied to customers when they make enquiries.

Distribution Truck Drivers

• Assists in loading and unloading biogas and other biofuel products
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
• Assists the transport and logistics manager in planning their route according to a distribution schedule.
• Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
• Reports defects, accidents or violations

6. SWOT Analysis

Our goal of starting out in North Platte is to test run the business for a period of 3 to 5 years to know if we will invest more money, expand the business and then start our biogas production and supply all around the state of Nebraska.

We are quite aware that there are several biogas production companies and contractors all over North Platte and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Green Gas® Biogas Production Company, Inc. employed the services of an expert HR and Business Analyst with bias in retailing and distribution to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Green Gas® Biogas Production Company, Inc.;

Our location, the business model we will be operating on (robust distribution network), reliable distribution tankers, varieties of payment options, quality and safe biogas and other biofuel products and our excellent customer service culture will definitely count as a strong strength for us.

So also, our management team are people who have what it takes to grow a business from startup to profitability in record time.

A major weakness that may count against us is the fact that we are a new biogas production company and we don’t have the financial capacity to compete with leaders in the industry especially as it relates to leveraging on economy of scales.

• Opportunities:

Regional public utility commissions regulate retail electricity prices. Biomass power plants controlled by regulated utility companies are subject to regulated retail prices.

Industry operators that successfully petition for rate hikes benefit from increased revenue and profitability, while companies that are unable to obtain favorable rulings will have difficulty operating in the industry. In 2019, the price of electric power is expected to increase, representing a potential opportunity for the industry.

Tax credits make biomass-power projects more affordable for biomass-power generation enterprises to execute. With cost savings, operators can more effectively compete based on the price of electricity with other types of energy-generation technologies.

With the expiration of the production tax credit and no renewal planned in 2019, the net value of tax credits directed at biomass power generation are expected to decrease, representing a potential threat to the industry.

7. MARKET ANALYSIS

• Market Trends

In recent time, particularly in the United States, the awareness and use of biogas is rapidly increasing because it has been proven to be environmentally friendly and efficient when used in any machine that runs on gas. It has lower to zero emission compared to the liquefied natural gas.

Strong growth in the current period is expected to continue, technological advancements spurred demand from downstream industries and the industry is developing new revenue streams from outsourced research and other related bio products.

Please note that external factors such as global research and development funding and global investor confidence in the Biomass Power industry will impact industry performance.

Many investors are now going into the production of biogas because it has been proven to be a better substitute for gas and that is why it is now produced in commercial quantities in the US thereby reducing the importation and dependence on natural gas.

8. Our Target Market

The Biomass Power industry has a wide range of customers; a good number of manufacturing companies and owners of gas – powered machines make use of biogas and other biofuel products.

In view of that, we have positioned our biogas production company to service businesses in North Platte – Nebraska and every other location we will cover in Nebraska.  We have conducted our market research and we have ideas of what our target market would be expecting from us. We are in business to retail (distribute) biogas and other biofuel products to the following businesses;

• Manufacturing companies
• Power plants that run on biogas
• Facility managers that make use of biogas

Our Competitive Advantage

Green Gas® Biogas Production Company, Inc. is launching a standard biogas production company that will indeed become the preferred choice for gas – powered machine owners and biogas distributors et al in North Platte – Nebraska.

Our competitive advantage revolves around our ability to attract local support and patronage, easy compliance with government regulations, ability to quickly adopt new technology, ability to raise financing and our ability to educate the wider community on the need to switch to green energy.

One thing is certain; we will ensure that we have biogas and other biofuel products available in our distribution network at all times. One of our business goals is to make Green Gas® Biogas Production Company, Inc. a one stop biogas production company.

Our excellent customer service culture, timely and reliable delivery services, online presence, and various payment options will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Green Gas® Biogas Production Company, Inc. will generate income by producing and supplying biogas and other biofuel products within the scope of the Biomass Power industry in the United States of America.

10. Sales Forecast

One thing is certain, when it comes to biogas production, if your business is centrally positioned coupled with effective and reliable tankers/trucks and distribution network, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

Green Gas® Biogas Production Company, Inc. is well positioned to take on the available market in North Platte – Nebraska and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.

We have been able to examine the Biomass Power industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in North Platte – Nebraska.

Below are the sales projections for Green Gas® Biogas Production Company, Inc., it is based on the location of our business, and other factors as it relates to biogas and other biofuel products start – ups in the United States;

• First Fiscal Year:  $335,000
• Second Fiscal Year:  $650,000
• Third Fiscal Year:  $1.1 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location to launch Green Gas® Biogas Production Company, Inc., we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for retailers of biogas and other biofuel in North Platte – Nebraska.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the biogas production business to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in North Platte – Nebraska.

In summary, Green Gas® Biogas Production Company, Inc. will adopt the following sales and marketing approach to win customers over;

• Introduce our business by sending introductory letters alongside our brochure to biogas and other biofuel products retailers, factories, facility managers, hotels, households and key stake holders in and around North Platte – Nebraska
• Ensure that we have a biogas and other biofuel products in our distribution network at all times.
• Make use of attractive hand bills to create awareness business
• Position our signage / flexi banners at strategic places around North Platte – Nebraska

11. Publicity and Advertising Strategy

Even though our biogas production company is well structured and well located, we will still go ahead to intensify publicity for the business.

Green Gas® Biogas Production Company, Inc. has a long-term plan of opening distribution channels all around the state of Nebraska which is why we will deliberately build our brand to be well accepted in North Platte before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Green Gas® Biogas Production Company, Inc.;

• Place adverts on community – based newspapers, radio and TV stations
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around North Platte – Nebraska
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our biogas production company in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and distribution vans/trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Pricing is one of the key factors that give leverage to distribution companies and retailers, it is normal for retailers to purchase products from distribution companies that they offer cheaper prices. We will work towards ensuring that all our biogas and other biofuel products are distributed at highly competitive prices compared to what is obtainable in the United States of America.

• Payment Options

The payment policy adopted by Green Gas® Biogas Production Company, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Green Gas® Biogas Production Company, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via credit cards/Point of Sale Machines (POS Machines)
• Payment via POS machines
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for biogas and other biofuel products purchase without any stress on their part.

13. Startup Expenditure (Budget)

From our findings, we were able to come with the areas we will spend our resources on and this is what it will cost us to set up Green Gas® Biogas Production Company, Inc. in the United of America;

• The total fee for registering the business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• Production Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet tank facility cum mini depot in the total amount of $250,000.
• The total cost for production facility remodeling (construction of mini depot / tank far) – $100,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $150,000
• The cost for Start-up inventory (stocking with biogas and other biofuel products raw materials et al) – $200,000
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs – $5,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost for the purchase of distribution tankers / trucks – $75,000
• The cost of launching a website – $600
• Miscellaneous – $10,000

We would need an estimate of $1.2 million to successfully set up our biogas production company in North Platte – Nebraska.

Generating Funds/Startup Capital for Green Gas® Biogas Production Company, Inc.

Green Gas® Biogas Production Company, Inc. is a private business that is owned and financed by Sutton Jones and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $500,000 (Personal savings $450,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $700,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

Part of the plans we have in place to sustain Green Gas® Biogas Production Company, Inc. is to ensure that we continue to deliver quality services, improvise on how to do things faster and cheaper. We are not going to relent in providing conducive environment for our workers and also the required trainings that will help them deliver excellent services at all times.

From our findings, another factor that kills new business is financial leakages. In order to plug financial leakages, the management of Green Gas® Biogas Production Company, Inc. will adopt the use of payment machine and accounting software to run the business.

We are quite aware that our customers are key component to the growth and survival of our business hence we are going to continuously engage them to give us ideas on how to serve them better.

Our key sustainability and expansion strategy as a business is to ensure that we only hire competent and technically sound employees, create a conducive working environment and employee benefits for all our staff members. We know that if we implement our business strategies, we will grow our biogas production business beyond North Platte – Nebraska to other states in the U.S in record time.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of mini depot facility and construction of production plant: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed machines, technology, furniture, reservoirs, computers, electronic appliances, office appliances and CCTV: In progress
• Purchase of distribution tankers/trucks: Completed
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Establishing business relationship with biogas and other biofuel products distributors all across the United States of America: In Progress

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Table of contents, crafting your biogas business plan.

• 7 June, 2024

Understanding Biogas Business

Before delving into the intricacies of starting a biogas business, it’s important to have a solid understanding of the biogas industry and the benefits that biogas plants offer.

Overview of Biogas Industry

The biogas industry plays a crucial role in sustainable waste management and renewable energy production. Biogas is a versatile fuel produced through the anaerobic digestion of organic matter, such as agricultural waste, food scraps, and sewage sludge. As the organic matter decomposes, it produces a mixture of methane and carbon dioxide, which can be captured and utilized as a source of energy.

Biogas plants have gained significant recognition due to their potential to supply carbon-neutral energy and heating. In fact, if the biogas is compressed to obtain biomethane, it can serve as a substitute for natural gas in various applications, including industrial, commercial, and domestic uses. The fuel can also be easily transported to supply gas filling stations, making it a viable alternative to traditional fossil fuels.

Benefits of Biogas Plants

Biogas is a renewable and carbon-neutral energy source. Its combustion does not produce new carbon dioxide, making it an environmentally friendly alternative to conventional fossil fuels. Furthermore, the production process of biogas prevents the release of methane into the atmosphere, which is a potent greenhouse gas. This has a positive impact on the environment by reducing greenhouse gas emissions ( HomeBiogas ).

In addition to its environmental benefits, biogas plants offer several advantages:

Sustainable Waste Management : Biogas plants can effectively process organic waste, including agricultural residues, food waste, and sewage sludge. Through anaerobic digestion, these waste materials are converted into biogas and a nutrient-rich byproduct called digestate. The residues produced by biogas plants serve as high-quality fertilizers, providing a sustainable alternative to chemical substances. They can help improve soil quality and reduce the reliance on synthetic fertilizers.

Circular Economy : Biogas plants contribute to building a circular economy by transforming waste into a valuable resource. The utilization of organic waste for biogas production creates new jobs across multiple industries and has a positive impact on the quality of life in numerous communities worldwide. Biogas plants play a significant role in promoting sustainability and resource efficiency.

Revenue Generation : Biogas plants can generate multiple sources of revenue. One of the primary revenue streams comes from the sale of biogas energy. The produced biogas can be utilized for electricity generation, heat production, or as a transportation fuel. Additionally, the digestate produced as a byproduct of anaerobic digestion can be sold as a high-quality fertilizer. Furthermore, biogas projects may be eligible for subsidies or tax credits, providing an additional financial incentive for biogas business owners.

Understanding the overview of the biogas industry and the benefits that biogas plants offer serves as a solid foundation for developing a successful biogas business plan. It is essential to explore various aspects of biogas business, including financing, revenue generation strategies, and construction management, to ensure a well-rounded and comprehensive approach to starting a biogas business.

Barriers to Biogas Adoption

The wider adoption of biogas as a source of energy is hindered by various barriers that need to be addressed for the successful implementation of biogas projects. These barriers can be categorized into six types: technical challenges, economic factors, market constraints, institutional barriers, socio-cultural influences, and environmental obstacles. Understanding and overcoming these barriers are crucial for the development and growth of the biogas industry.

Technical Challenges

Technical challenges encompass the technological aspects of biogas production and utilization. These challenges can include issues related to biogas technology , such as the complexity of the biogas production process , design considerations for biogas plants , and the need for efficient waste management practices. Overcoming these challenges requires continuous research and development to improve the efficiency, reliability, and scalability of biogas systems.

Economic Factors

Economic factors play a significant role in the wider adoption of biogas. The cost of biogas plants and associated infrastructure, including feedstock collection and transportation, can be substantial. Additionally, the return on investment and payback period for biogas projects need to be carefully assessed. Financial incentives, subsidies, and favorable policies can help overcome economic barriers and make biogas projects financially viable.

Market Constraints

Market constraints refer to challenges related to the demand, supply, and distribution of biogas. These constraints can include limited access to markets and buyers for biogas, lack of infrastructure for biogas distribution, and competition from other energy sources. Developing a robust market strategy and establishing partnerships with potential off-takers can help overcome these constraints and create a sustainable market for biogas.

Institutional Barriers

Institutional barriers arise from regulatory frameworks, policies, and administrative procedures that can hinder the development and operation of biogas projects. These barriers can include lengthy permitting processes, complex regulations, and a lack of clear guidelines for biogas project development. Streamlining regulatory processes, providing support for project permitting, and establishing favorable policies can help remove institutional barriers and encourage the growth of the biogas industry.

Socio-Cultural Influences

Socio-cultural influences can impact the acceptance and adoption of biogas technology in communities. Factors such as limited awareness and knowledge about biogas, cultural preferences for traditional energy sources, and social attitudes towards waste management can act as barriers. Education and awareness programs, community engagement, and targeted communication strategies can help address these socio-cultural influences and promote the benefits of biogas.

Environmental Obstacles

Environmental obstacles encompass challenges related to environmental sustainability and impact. These can include concerns about odor, noise, air quality, and the potential for water and soil contamination associated with biogas production. Implementing appropriate mitigation measures, adhering to environmental regulations, and emphasizing the environmental benefits of biogas can help overcome these obstacles and gain public acceptance.

By recognizing and addressing these barriers, stakeholders in the biogas industry can develop strategies and plans to mitigate challenges and promote the broader adoption of biogas as a clean and renewable energy source.

Global Biogas Market Insights

To understand the potential of starting a biogas business, it’s important to gain insights into the global biogas market. This section will provide an overview of the market size, growth trends, revenue analysis, and supply chain structure.

Market Size and Growth Trends

The global biogas market has been experiencing significant growth in recent years. In 2022, the market size was valued at USD 64,714.07 million, and it is projected to expand at a compound annual growth rate (CAGR) of 6.7% during the forecast period, reaching USD 95,491.5 million by 2028. This growth can be attributed to various factors, including the increasing focus on renewable energy sources and the growing awareness of environmental sustainability.

The demand for biogas is driven by the need to reduce greenhouse gas emissions and dependence on fossil fuels. Additionally, governments and organizations worldwide are implementing favorable policies and incentives to promote the adoption of biogas as an alternative energy source.

Revenue Analysis

A comprehensive revenue analysis provides valuable insights into the financial aspects of the biogas market. The analysis covers various segments related to the present and projected status of the market. It focuses on industry growth, revenue generation, and the supply chain structure ( LinkedIn ).

The revenue analysis helps businesses identify potential opportunities and challenges within the market. By understanding revenue trends and patterns, companies can make informed decisions to maximize their profitability in the biogas industry. It also enables stakeholders to assess the growth potential of different market segments and allocate resources accordingly.

Supply Chain Structure

The supply chain structure of the biogas market plays a crucial role in ensuring the efficient production and distribution of biogas products. It involves various stages, starting from the collection of organic waste materials to the production and distribution of biogas.

The supply chain typically includes the following key components:

Feedstock Collection: The collection of organic waste materials, such as agricultural residues, food waste, and sewage sludge, which serve as the raw materials for biogas production.

Anaerobic Digestion: The process of converting organic waste into biogas through anaerobic digestion. This involves the use of biogas technology and the implementation of specific biogas production processes.

Gas Upgrading: The purification and upgrading of biogas to remove impurities, such as carbon dioxide and hydrogen sulfide, to produce high-quality biomethane.

Distribution and Utilization: The distribution of biogas or biomethane through pipelines or transportation methods for various applications, including electricity generation, heat production, and transportation fuel.

Understanding the supply chain structure is essential for businesses entering the biogas market. It helps in identifying key stakeholders, optimizing logistics, and ensuring the smooth flow of operations from feedstock collection to the utilization of biogas.

By staying informed about the market size, growth trends, revenue analysis, and supply chain structure, businesses can make informed decisions when crafting their biogas business plans. This knowledge sets the stage for success and positions them to capitalize on the opportunities presented by the growing global biogas market.

Starting a Biogas Business

To successfully embark on your biogas business journey, it’s important to have a well-crafted plan in place. This section will focus on key aspects of starting a biogas business, including financing biogas projects, revenue generation strategies, and construction management.

Financing Biogas Projects

Financing is a critical component when it comes to establishing biogas projects. Biogas plant development can be funded through various sources, including equity, debt, subsidies, and tax credits. Municipalities often rely on subsidies and debt to finance their projects, while private projects require a significant amount of equity (25%) and energy contracts from solid clients to secure their debt.

When seeking financing for your biogas project, it’s important to develop a comprehensive business plan that outlines the financial feasibility, potential returns, and risks associated with the venture. This will help attract investors and lenders who are interested in supporting sustainable energy initiatives.

Revenue Generation Strategies

Generating revenue is a key objective for any business, and biogas plants offer multiple avenues for revenue generation. One primary source of revenue comes from the sale of biogas energy. Biogas can be converted into electricity, heat, or biomethane, which can then be sold to the grid, industries, or local consumers.

In addition to energy sales, biogas plants can generate revenue from the sale of digestate, a nutrient-rich byproduct of the biogas production process. Digestate can be used as a fertilizer or soil amendment, offering an additional income stream.

It’s important to consider potential subsidies or tax credits that may be available to support biogas projects. These incentives can help offset costs and improve the financial viability of the business. A thorough understanding of the market and regulatory environment is crucial for identifying and capitalizing on these revenue opportunities.

Construction Management

Proper construction management plays a vital role in the successful realization of biogas projects. Effective construction management ensures that procurement and the execution of various contracts are well-timed, minimizing construction conflicts and unnecessary delays.

During the construction phase, it’s important to work closely with contractors and suppliers to ensure that the biogas plant design is implemented accurately and efficiently. Regular inspections and quality control measures should be in place to maintain construction standards and meet regulatory requirements.

Clear communication and coordination among all stakeholders involved in the construction process are essential to ensure timely completion and adherence to project timelines. By closely managing the construction phase, you can minimize risks, control costs, and ensure the successful implementation of your biogas project.

By considering these key factors, such as financing biogas projects, revenue generation strategies, and construction management, you can lay a strong foundation for your biogas business. Remember to conduct thorough market research, seek expert advice, and develop a well-rounded business plan to increase your chances of success in the dynamic biogas industry.

Biogas Business in Developing Countries

In developing countries, the adoption of biogas technology has the potential to provide significant benefits, particularly in rural communities. Two case studies, South Africa and Pakistan, shed light on the role of biogas and its impact on these regions.

Case Study: South Africa

In South Africa, the adoption of biogas technology faces various obstacles, including a lack of awareness and a regulatory framework to support the installation of biodigesters. However, efforts are being made to promote the technology and its benefits.

A study conducted in Muldersdrift, South Africa, found that education and hands-on experience played a crucial role in increasing the willingness of community members to adopt biogas technology. By providing educational sessions and practical exposure to small-scale household biodigesters, individuals became more receptive to the technology ( Energy, Sustainability and Society ). This highlights the importance of education and awareness in driving biogas adoption in rural areas.

Biogas technology offers a decentralized energy solution to rural communities in South Africa, providing a cheap, renewable, and viable alternative to traditional energy sources like firewood and charcoal. The technology is relatively simple and can be implemented cost-effectively, utilizing waste as feedstock for the biodigesters. However, the lack of awareness and understanding of biogas as a form of energy among the general public remains a hindrance to its expansion in the country.

Case Study: Pakistan

In Pakistan, the adoption of biogas technology has shown positive outcomes. A comprehensive study conducted in the country revealed that various factors influence the adoption of biogas plants by farmers. These factors include maintenance barriers, financial support, economic and policy barriers, owner satisfaction, awareness through social media, and intention to adopt biogas technology.

Addressing maintenance barriers, providing financial support, and implementing economic strategies and policies are crucial for encouraging the adoption of biogas technology in rural areas of Pakistan. Additionally, social media awareness plays a moderating role in influencing the intention to adopt biogas technology in the country ( NCBI ). These findings highlight the importance of comprehensive approaches to facilitate the widespread adoption of biogas technology.

Role of Biogas in Rural Communities

In both South Africa and Pakistan, biogas technology plays a significant role in rural communities. It offers a sustainable and renewable energy source that can be produced locally, reducing reliance on traditional energy sources. Biogas can be generated from various organic waste materials, such as agricultural residues, livestock manure, and food waste, providing a valuable solution for waste management while producing clean energy.

In rural areas where access to electricity is limited, biogas technology provides a decentralized energy solution. It offers rural communities the opportunity to utilize their organic waste to generate gas for cooking, heating, and lighting purposes. This not only improves energy access but also contributes to reducing environmental pollution and improving overall living conditions.

By promoting the adoption of biogas technology through education and awareness campaigns, government support, and addressing maintenance barriers, developing countries can harness the potential of biogas to improve energy access, promote sustainable waste management, and enhance the livelihoods of rural communities.

Promoting Biogas Adoption

In order to encourage the adoption of biogas technology, it is crucial to focus on education and awareness, government support, and addressing maintenance barriers. These factors play a significant role in promoting the growth and acceptance of biogas as a sustainable energy solution.

Education and Awareness

Education and awareness programs are vital for promoting the benefits and potential of biogas technology. By providing accurate and accessible information about the biogas production process and the positive environmental impact of biogas plants, stakeholders can make informed decisions regarding its implementation.

A study conducted in Muldersdrift, South Africa, revealed that community members who participated in educational sessions and gained hands-on experience with small-scale household biodigesters were more willing to adopt the technology ( Energy, Sustainability and Society ). This highlights the importance of education and exposure in increasing biogas adoption, particularly in rural areas.

Government Support

Government support plays a crucial role in the widespread adoption of biogas technology. Governments can provide financial incentives, subsidies, and regulatory frameworks to encourage the development and operation of biogas plants. These measures can help offset the biogas plant cost and create a favorable business environment for biogas entrepreneurs.

Furthermore, government policies can prioritize renewable energy sources and set renewable energy targets, which can drive the demand for biogas and create a market for biogas-based products. By establishing supportive policies and creating a conducive environment for biogas businesses, governments can significantly contribute to the growth of the biogas industry.

Addressing Maintenance Barriers

Maintenance barriers can be a significant obstacle to the widespread adoption of biogas technology, particularly in rural areas. Addressing these barriers is crucial to ensure the long-term success and sustainability of biogas plants. Regular maintenance and proper operation of biogas plants are essential for optimal performance and efficiency.

A study conducted in Pakistan highlighted the importance of addressing maintenance barriers, financial support, and economic strategies in encouraging the adoption of biogas technology. By providing technical support, training programs, and access to spare parts, maintenance barriers can be effectively overcome, leading to increased confidence and satisfaction among biogas plant owners.

Furthermore, creating awareness through social media platforms can play a significant role in disseminating information about biogas technology and its benefits. Social media awareness acts as a moderating factor in influencing the intention to adopt biogas technology, as seen in the case of Pakistan ( NCBI ). Leveraging social media platforms can enhance education and awareness efforts, reaching a wider audience and fostering community engagement.

By focusing on education and awareness, government support, and addressing maintenance barriers, stakeholders can effectively promote the adoption of biogas technology. These efforts contribute to a sustainable and renewable energy future while providing economic and environmental benefits to communities and businesses alike.

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How to Create a Business Plan for Biogas Production: Key Insights

By henry sheykin, get full bundle.

Are you interested in entering the biogas production industry? With its potential for renewable energy and sustainable waste management, biogas production is a growing sector in the US. According to the latest statistics, the biogas production market in the US is projected to reach $4.37 billion by 2025, with a Compound Annual Growth Rate (CAGR) of 5.73% .

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But how do you get started in this industry? Writing a comprehensive business plan is crucial for success. In this blog post, we will walk you through the 9 essential steps to create a business plan for biogas production. Let's dive in!

Step 1: Set clear goals and objectives

Step 2: Conduct market research

Step 3: Identify your target market

Step 4: Analyze the competition

Step 5: Determine the sources of funding

Step 6: Define your unique selling proposition

Step 7: Develop a pricing strategy

Step 8: Assess regulatory and legal requirements

Step 9: Evaluate potential risks and challenges

Each of these steps plays a vital role in creating a solid business plan that will guide your biogas production venture. By following this checklist, you can effectively outline your goals , understand the market , stand out from competitors , and mitigate risks . Keep reading our blog for detailed insights into each step, and start your journey towards a successful biogas production business.

Set Clear Goals and Objectives

Setting clear goals and objectives is essential when writing a business plan for biogas production. This step helps you define what you want to achieve and provides a roadmap for your business.

To get started, consider the following:

• Identify your overall purpose: Determine why you want to start a biogas production business. Are you passionate about renewable energy? Interested in waste management? Understanding your purpose will give you a sense of direction.
• Establish specific goals: Set measurable and time-bound objectives for your business. For example, you may aim to produce a certain amount of biogas within a specific timeframe or achieve a certain revenue target in the first year. Breaking down your goals into smaller, achievable milestones will help you stay focused and motivated.
• Consider environmental and social impact: Biogas production offers both environmental and social benefits. Determine how your business can contribute to reducing greenhouse gas emissions, promoting sustainable practices, or supporting local communities. Incorporating these aspects into your goals can attract stakeholders and investors who value sustainability.
• Ensure your goals are realistic and aligned with available resources.
• Periodically review and revise your goals as your business evolves.
• Make your goals SMART: specific, measurable, attainable, relevant, and time-bound.

Setting clear goals and objectives not only helps you stay focused but also provides a basis for evaluating the success of your biogas production business in the future. Take the time to establish these goals and ensure they align with your overall vision and values.

Conduct Market Research

Market research is a crucial step in developing a business plan for biogas production. It involves gathering and analyzing information about the biogas industry, potential customers, and market trends. This research will help you understand the demand for biogas and identify opportunities for growth.

During your market research, consider the following important factors:

• Demand for Biogas: Determine the current and future demand for biogas in your target market. Are there government incentives or mandates driving the demand? Are there any emerging trends or technologies that could affect the market?
• Customer Profiles: Identify the potential customers for your biogas production business. Are they utilities, transportation companies, or other industries? What are their specific needs and requirements?
• Competitor Analysis: Analyze the competition in the biogas production industry. Who are the major players? What are their strengths and weaknesses? What strategies do they use to attract customers?
• Market Trends: Stay informed about the latest market trends and developments in the biogas industry. Are there any technological advancements or regulatory changes that could impact your business?

Tips for conducting market research:

• Utilize online resources, industry reports, and government databases to gather information.
• Interview potential customers and industry experts to gain insights into the market.
• Attend conferences, trade shows, and networking events to connect with industry professionals and stay updated on industry trends.
• Consider hiring a market research firm to conduct a comprehensive analysis of the biogas market.

By conducting thorough market research, you will be able to make informed decisions about your biogas production business. It will help you identify the target market, understand customer needs, and position your business competitively in the industry. Armed with this knowledge, you can move forward to other crucial steps in developing your business plan.

Identify Your Target Market

Identifying your target market is a critical step in developing a successful biogas production business plan. Understanding who your potential customers are will help you tailor your products and services to meet their specific needs and preferences.

When identifying your target market, consider the following:

• Demographics: Determine the characteristics of your ideal customer, such as age, gender, location, and income level. These factors can influence the demand for biogas and the potential pricing strategies.
• Industry: Assess which industries are likely to have a high demand for biogas, such as utilities, transportation, or agricultural sectors. Understanding the specific needs and requirements of these industries will help you position your business more effectively.
• Geographical Location: Determine the geographic areas where there is a strong potential for biogas production. Consider factors such as proximity to farms or waste management facilities, as well as transportation infrastructure for distributing your products.
• Market Trends: Research market trends, such as the increasing focus on renewable energy sources or the demand for sustainable waste management practices. Identify any emerging opportunities or challenges within the market that could impact your business.
• Conduct surveys or interviews with potential customers to gather insights into their needs and preferences.
• Stay updated with industry reports and publications to identify any changes or trends within the target market.
• Consider the potential for partnerships or collaborations with organizations or entities that share similar target markets.

Analyze The Competition

An important step in developing a successful business plan for biogas production is to analyze the competition in the market. By understanding your competitors, you can identify their strengths and weaknesses, and determine how your biogas production business can differentiate itself.

When analyzing the competition, consider the following:

• Market Presence: Identify the existing biogas production companies operating in your target market. Determine their market share, customer base, and overall reputation.
• Products and Services: Evaluate the range and quality of products and services offered by your competitors. Consider the types of biogas produced, their pricing strategies, and any unique features or benefits they offer.
• Customer Relationships: Assess how your competitors interact with their customers and build relationships. Look for opportunities to provide a better customer experience or additional value-added services.
• Marketing and Sales: Study the marketing and sales strategies employed by your competitors. Analyze their advertising channels, messaging, and customer acquisition tactics. Identify any gaps or areas where you can improve.
• Pricing: Examine the pricing strategies of your competitors and compare them to your proposed pricing strategy. Consider factors such as the cost of production, the target market's willingness to pay, and any pricing advantages or disadvantages you may have.
• Strengths and Weaknesses: Analyze the strengths and weaknesses of your competitors. Identify areas where you can outperform them and develop strategies to capitalize on those advantages. Similarly, identify potential weaknesses in your own business model and develop strategies to mitigate them.

Tips for Analyzing the Competition:

• Visit trade shows and industry conferences to learn more about your competitors and their latest offerings.
• Conduct online research and read industry publications to stay updated on the latest trends and developments in biogas production.
• Reach out to potential customers or industry experts to gather insights and feedback on your competitors.
• Consider conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to further understand your competition.
• Continuously monitor and reassess your competitors, as the biogas production industry is evolving rapidly.

Determine The Sources Of Funding

Once you have established your goals and objectives for your biogas production business and conducted thorough market research, the next crucial step is to determine the sources of funding to bring your project to fruition. Securing the necessary capital investment is essential to cover the costs associated with equipment, infrastructure, and operational expenses.

1. Personal savings: Consider utilizing your personal savings as a primary source of initial funding. This demonstrates your commitment to the project and can increase your chances of securing additional financing from other sources.

2. Traditional bank loans: Approach banks and financial institutions to explore loan options specifically designed for renewable energy projects. Prepare a comprehensive business plan, financial projections, and collateral offerings to increase your chances of loan approval.

• As renewable energy is a growing industry, some financial institutions offer specialized loan programs that cater specifically to biogas production businesses. Research and reach out to such institutions to increase your chances of success.
• Be prepared to undergo thorough scrutiny during the loan application process. Banks will evaluate your creditworthiness, business plan, and financial stability before granting the loan.

3. Grants and government funding: Explore grants and government funding programs designed to promote renewable energy projects. Organizations like the Department of Agriculture or the Environmental Protection Agency often provide financial incentives and subsidies to biogas producers.

• Thoroughly research and stay updated on available grants, subsidies, or tax credits that support renewable energy projects. Actively seek out opportunities to secure additional funding.
• Prepare a compelling proposal outlining the environmental and economic benefits of your biogas production business to increase your chances of being awarded a grant or funding.

4. Private investors and venture capitalists: Consider attracting private investors or venture capitalists who are interested in sustainable and renewable energy projects. Prepare a compelling pitch deck highlighting the potential return on investment and the positive environmental impact of your business.

• Network with investors or attend renewable energy conferences and events to connect with potential investors who share your passion for sustainable energy solutions.
• Be prepared to negotiate and present a solid business plan to persuade investors of the competitive advantage and growth potential of your biogas production business.

5. Crowdfunding: Explore crowdfunding platforms to engage individuals or groups interested in supporting sustainable projects like yours. Craft a compelling campaign that highlights the unique aspects of your biogas production business and the benefits it brings to the community and the environment.

• Utilize social media and online communities to generate awareness about your crowdfunding campaign.
• Offer attractive incentives or rewards to encourage individuals to contribute, such as exclusive merchandise, project updates, or even the opportunity to visit the biogas production facility.

Remember, securing funding for a biogas production business requires persistence, thorough research, and a compelling business proposition. By exploring a combination of funding sources, you can increase your chances of accessing the capital necessary to turn your business plan into a successful reality.

Define Your Unique Selling Proposition

In order to stand out in the competitive biogas production market, it is crucial to define your unique selling proposition (USP). Your USP should clearly communicate what sets your biogas production business apart from others in the industry, and why potential customers should choose you over your competitors.

Here are some important considerations when defining your USP:

• Identify your key strengths: Determine what unique strengths and capabilities your business possesses that give you an advantage in the market. This could include factors such as your location, access to specific organic waste sources, advanced technology, or specialized expertise.
• Understand customer needs: Conduct market research to understand the specific needs and preferences of your target market. Identify any gaps or unmet needs that your business can address.
• Highlight your environmental impact: Biogas production is a sustainable and environmentally-friendly alternative to traditional energy sources. Emphasize the positive impact your business has on reducing greenhouse gas emissions and promoting a circular economy.
• Showcase your reliability and track record: Potential customers need to have confidence in your ability to consistently deliver high-quality biogas. Highlight any previous successful projects or partnerships to demonstrate your track record and reliability in the industry.
• Consider branding: Develop a strong brand identity and messaging that reflects your USP. This includes your company name, logo, website design, and marketing materials.
• Communicate your USP clearly: Craft a compelling elevator pitch that clearly communicates your USP and value proposition in a concise and persuasive manner.
• Stay updated on industry trends: Continuously monitor the biogas production industry for emerging trends, technologies, and customer demands. Make sure your USP remains relevant and adaptable to changing market conditions.

By defining and effectively communicating your unique selling proposition, you can differentiate your biogas production business, attract potential customers, and establish a strong market presence.

Develop A Pricing Strategy

In order to determine the optimal pricing strategy for your biogas production business, it is important to consider various factors that may influence the market price of biogas. Here are some key points to keep in mind:

• Cost Analysis: Conduct a thorough cost analysis to understand the expenses involved in the production process. This includes the capital investment, operational costs, maintenance, and any other expenses incurred in the biogas production. It is crucial to have a clear understanding of the cost structure to ensure that your pricing strategy covers all these costs while allowing for a reasonable profit margin.
• Market Demand: Analyze the demand for biogas in your target market. Consider factors such as the availability and cost of alternative energy sources, government policies promoting renewable energy, and customer preferences. Understanding the market demand will help you in setting competitive prices that attract customers while maximizing your revenue.
• Competitor Analysis: Research the pricing strategies employed by your competitors. This will give you insights into their pricing models, customer segments they target, and any special offerings they provide. Analyzing the competition will help you position your pricing strategy effectively in the market.
• Value Proposition: Define your unique selling proposition (USP) and highlight the value proposition offered by your biogas production. This could include factors such as the quality and reliability of your biogas, cost savings for customers, environmental benefits, or any value-added services you provide. Make sure your pricing strategy aligns with the value you offer.
• Government Incentives: Research any government incentives or subsidies available for biogas production. These can include tax benefits, grants, or renewable energy credits, which can offset some of your costs and boost your profitability. Incorporate these incentives into your pricing strategy to leverage the available opportunities.

Tips for Developing a Pricing Strategy:

• Ensure that your pricing strategy covers all your costs while remaining competitive in the market.
• Consider offering different pricing options to cater to different customer segments.
• Regularly monitor and reassess your pricing strategy to stay aligned with market dynamics and changing costs.
• Communicate the value proposition of your biogas production to customers to justify your pricing.

By taking into account the cost analysis, market demand, competition, value proposition, and government incentives, you can develop a pricing strategy that maximizes your revenue while delivering value to your customers. Remember to regularly review and adjust your pricing strategy based on market conditions, ensuring the long-term sustainability and profitability of your biogas production business.

Assess Regulatory and Legal Requirements

When starting a biogas production business, it is crucial to thoroughly assess the regulatory and legal requirements that govern this industry. Understanding and complying with these regulations is essential for ensuring your business operates legally and minimizing the risk of penalties or legal issues.

1. Research federal, state, and local laws: Familiarize yourself with the specific regulations applicable to biogas production at the federal, state, and local levels. Consult relevant government websites, industry associations, or legal professionals specializing in environmental and energy laws to ensure you have accurate and up-to-date information.

2. Obtain necessary permits and licenses: Determine the permits and licenses required for operating a biogas production facility. This may include environmental permits, waste management permits, air permits, or water permits. Contact the appropriate regulatory agencies and follow their application processes to obtain these permits and licenses. Keep in mind that the requirements can vary depending on the location and scale of your operation.

3. Comply with health and safety regulations: Biogas production involves working with potentially hazardous substances, such as organic waste and gases. Ensure that your facility meets all health and safety regulations to protect your employees, visitors, and the environment. Implement proper safety protocols, provide necessary protective equipment, and conduct regular training for your staff.

4. Understand renewable energy incentives: Many governments offer incentives, grants, or tax benefits to promote renewable energy production. Research and understand the incentives available for biogas production in your area. This can include renewable energy certificates, tax credits, feed-in tariffs, or subsidy programs. Take advantage of these incentives to maximize your profitability and offset initial investment costs.

• Make sure to stay updated on any changes or updates to regulations that may affect your business. Join industry associations or subscribe to newsletters to receive timely information.
• Contact local government officials or regulatory agencies to seek guidance or clarification on specific regulations or requirements.
• Consider consulting an attorney specializing in environmental and energy laws to ensure full compliance and to navigate any legal complexities.

By thoroughly assessing and understanding the regulatory and legal landscape, you can establish a biogas production business that operates within the boundaries of the law while maximizing opportunities for success.

Evaluate Potential Risks and Challenges

Before embarking on any business venture, it is essential to evaluate the potential risks and challenges that may arise. This step will help you identify and prepare for any obstacles that may hinder your biogas production business. Here are some key factors to consider:

• Market Volatility: The price of biogas and the demand for renewable energy can fluctuate due to various factors such as changing government policies, market competition, or shifts in consumer preferences. It is crucial to stay updated with market trends and be prepared to adapt your business strategy accordingly.
• Technical Issues: Biogas production involves complex processes and technologies, and there may be risks related to equipment failure, maintenance challenges, or operational inefficiencies. Having a comprehensive understanding of the technology and investing in proper maintenance and troubleshooting measures can help mitigate these risks.
• Regulatory Compliance: The biogas production industry is subject to various regulations and permits, including environmental, health, and safety requirements. Failing to comply with these regulations can lead to penalties, legal issues, and reputational damage. Ensure you understand and adhere to all relevant regulations to operate your business smoothly.
• Supply Chain Management: Creating a reliable supply chain for collecting organic waste from farms or waste management facilities is vital for the uninterrupted production of biogas. Challenges can arise, such as fluctuating waste availability, transportation issues, or negotiating contracts with suppliers. Developing strong relationships with your partners and implementing effective supply chain management strategies will help minimize disruptions.
• Financial Risks: Biogas production requires a significant upfront investment in infrastructure, equipment, and operational costs. Ensuring a stable and sufficient cash flow to cover these expenses, along with potential unforeseen circumstances, is crucial. Factors like changes in tax laws, access to funding or grants, and the availability of financing options will impact your financial stability.
• Perform a comprehensive risk assessment to identify potential risks and develop strategies to mitigate them.
• Stay informed about the latest industry news, policies, and technologies to anticipate and adapt to market changes.
• Establish contingency plans and emergency protocols to address unexpected situations or disruptions in the production process.
• Build strong relationships with industry experts, consultants, or mentors who can provide guidance and support in overcoming challenges.
• Regularly review and update your business plan to incorporate any changes or lessons learned from the risks and challenges faced.

Writing a business plan for biogas production is essential for ensuring the success and sustainability of your venture. By following these 9 steps, you can effectively outline your goals, understand the market, secure funding, and address potential challenges. With the rising demand for renewable energy and the potential for government incentives, biogas production presents a lucrative and environmentally-friendly business opportunity. By carefully planning and executing your business plan, you can position yourself for success in this growing industry. Good luck!

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Biogas Production Business Plan Template

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Introduction

Global market size, target market, business model, competitive landscape, legal and regulatory requirements, financing options, marketing and sales strategies, operations and logistics, human resources & management.

Anaerobic Digestion .svg-icon-arrow .st0{fill:white;}

• Wet digestion systems
• Dry digestion systems
• Small scale digesters
• Digester tanks
• Digester covers
• Odor management

Biogas Management .svg-icon-arrow .st0{fill:white;}

• CO2 Capture and Utilization
• Biogas boilers
• Biogas flare
• Biogas covers & storage
• Biogas pretreatment
• Biogas upgrading

RNG & Biomethane Utilisation .svg-icon-arrow .st0{fill:white;}

• Virtual Pipeline
• Odorization

Reception and preprocessing .svg-icon-arrow .st0{fill:white;}

• Solids handling
• Truck scales
• Waste pretreatment
• Waste sorting

Digestate management .svg-icon-arrow .st0{fill:white;}

• Nutrient recovery
• Digestate thickening and dewatering
• Pasteurization

Wastewater Treatment .svg-icon-arrow .st0{fill:white;}

• Solid/liquid separators
• Solids dryers

Hydrogen & Power-to-Gas .svg-icon-arrow .st0{fill:white;}

• Hydrolysers
• Hydrogen to methane
• Hydrogen to methanol
• Hydrogen storage
• Hydrogen compressors

Laboratory Analysis .svg-icon-arrow .st0{fill:white;}

Services .svg-icon-arrow .st0{fill:white;}.

• Biogas & RNG Purchasers
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The objective of this handbook is to provide the reader with a general project development roadmap to assist him/her through the complex tasks of planning, designing, procuring, permitting, building and operating an efficient and viable biogas plant.

Note that this handbook will be regularly updated with new content about biogas, anaerobic digestion, and the best practices of our industry.

Biogas plant development handbook sections

1.  Introduction

2.  Why Building Biogas Plants?

3.  Anaerobic Digestion

4.  Biogas Plant Fundamentals

5.  Biogas Plant Safety

6.  Input Feedstock

7.  Biogas Process Technologies

8.  Biogas Energy

9.  Digestate Management

10.  Biogas Plant Components

11.  Biogas Project Economics

12.  Biogas Project Development

Our firm has been selling biogas engineering expertise for over 12 years in various agricultural, agro-food and municipal organic waste management sectors.  I’m constantly amazed to discover that significant biogas plant projects suffer from improper planning and design resulting in suboptimal biogas plants operation and economics. Most of these easily avoidable errors are due to initial misconception, lack of knowledge and information on the subject of biogas plant engineering.

There exist a lot of excellent publications on the subject of anaerobic digestion and biogas utilization but very few on the subject of biogas engineering and biogas project development as a whole.

I remember my early years as a biogas engineer where I got infatuated with the subject and devoured a large quantity of technical information on anaerobic digestion and biogas utilization. Over the years, these technical aspects have receded to the background as I focused my work on equally complex issues such as project planning, financing, procurement, permitting, politics and operation. It is these subject matters that are the primary focus of this handbook.

This handbook has been written to be published as either a set of ever-evolving hyperlinked articles in a website ( BiogasWorld ) or as a standalone eBook because the rapidly evolving biogas industry demands it.

I hope you will enjoy the reading and find valuable information to help you design, build, and operate a better biogas plant.

Eric Camirand, P.Eng.

President, Electrigaz Technologies Inc.

1. Introduction

This handbook has been written for readers recognizing themselves in one of these statements:

• You are asking yourself how you could turn organic waste into gold?
• You have been tasked with the job of building a biogas plant to treat organic waste and have no clue how to go about it?
• You have been studying this subject for years and you think you are now ready to build your own biogas plant?
• You are intrigued by this amazing technology converting waste into renewable energy and fertilizer and want to learn more about it?
• You have been learning about biogas for years and the more you learn about it, the more you realize its complexity and get confused?
• You are operating a biogas plant and are wondering why it is performing poorly and trying to find concrete solutions to these problems?

If you identified yourself in one of these statements, you are officially deemed cursed with an infinite appetite for more information on the subject matter of biogas plant development and operation.

This handbook has been written to help you make the best out of your predicament.

2. Why building biogas plants?

Why would you not want to get rich by turning organic waste into renewable energy and fertilizer while reducing overall environmental issues related to their disposal?

In reality, there exist three (3) reasons why people build biogas plants:

• Compliance with regulation
• Economic opportunities

Beyond this reality, there exists a killer question that is frequently asked: “Why not compost ? Isn’t it less expensive?”

The easy answer is: “It depends.” (not a very useful one, though). In reality, it is difficult to answer this question simply.  Each project has its own regulatory, energy market and local environmental realities that influence the choice between composting or anaerobic digestion.

In general, it is cheaper to perform open air composting at smaller solid organic waste tonnages (less than 10 000 tonnes/year).  Beyond that, a thorough feasibility study must be performed to measure the challenges and opportunities of each organic waste treatment technology.

Anaerobic digestion and composting often played one against the other. In reality, these technologies are complementary and should often be developed jointly to leverage the strengths that each has to offer.

There are three (3) major regulatory drivers forcing the development of biogas plants:

• Greenhouse gas (GHG) policies
• Renewable energy policies
• Recycling policies

Despite their biogas capture systems, landfill emits a significant amount of fugitive methane to the atmosphere, therefore contributing to greenhouse gas emissions. Additionally, landfilling of organics does not comply with typical recycling policies that state that waste should be reduced, reused and recycled (3Rs) prior to final disposal, since organic waste in this scenario is not returned to land.

For these reasons, GHG and recycling policies are generally leading to the ban of organic landfilling therefore forcing composting and/or anaerobic digestion of organic waste.

Renewable energy policies, such as Renewable Portfolio Standards (RPS), established in many states and countries force energy utilities to produce a certain percentage of their energy from renewable sources. These utilities are constantly on the lookout for affordable renewable energy such as biogas energy.

Economic opportunity

Biogas plants create economic opportunities in markets where energy costs and/or waste disposal costs are relatively high. Since the organic fraction of municipal solid waste can represent approximately 50% of MSW mass, it becomes economically interesting to divert the organic fraction from conventional disposal towards anaerobic digestion.

Processing of organic waste in a biogas plant can help reduce waste disposal cost. Production of biogas from organic waste can help generate an affordable renewable energy. Combined, these opportunities drive the development of biogas projects.

For example, small island countries can benefit greatly from biogas plant since they often generate expensive and dirty electricity with diesel ($0.50+/kWh) and are confronted with significant challenges regarding disposal of their waste.

Some biogas plants get built for no good reasons, primarily driven by sheer madness and/or egotistical motivations. Most of these project developers were blind to key biogas project fundamentals that will be discussed later in this handbook.

These poorly planned and executed projects are resulting in biogas plants with poor operational and economic efficiencies and, in general, hurt the industry.

3. Anaerobic digestion

Anaerobic digestion is a natural bacterial process by which a consortium of anaerobic bacteria is biodegrading organic matter in an environment without oxygen.

These bacteria require a favorable environment to thrive. Proper temperature, lack of oxygen, proper feeding, acidity, and mixing are the key to efficient anaerobic digestion.

The anaerobic digestion process takes place in equipment called anaerobic digesters or, in short, digesters. Digesters must be fed as constantly as possible regardless of feedstock fluctuations.

Several types of bacteria work together to convert the digestible volatile solids within the feedstock into biogas. Though most feedstocks are composed primarily of water, you cannot make biogas with water. You make biogas out of the digestible fraction of the solids within the feedstock.

Although lignocellulosic material, such as wood, contains a lot of volatile solids (burnable), these solids are not digestible in an anaerobic digester.

The conversion of solids into biogas makes the substrate more liquid. That’s why it is possible to feed solid feedstock into liquid digesters without them clogging up.

Biogas is composed primarily of methane and carbon dioxide.

4. Biogas Plant Fundamentals

Inexperienced biogas developers often focus their effort on the technical aspects rather than the project fundamentals.

The technology choice is always secondary to the establishment of the following fundamentals:

The feedstock quantity and composition must be well known and under the control of the project developer. Without proper feedstock, there is no biogas project.

There must be a client for the biogas energy. If there is none, you might as well just compost the material.

Biogas plants transform only 10% of the mass they process into biogas. The remaining 90% of the mass fed into the digester comes out as a fertilizer called digestate. The project must have a long term inexpensive outlet for this digestate otherwise the project will not succeed.

Finally, the project must be bankable. That means that investment, operational costs, and revenue must be predictable and balanced for the project to secure its financing.

If any of these fundamentals fall short the table will tilt and will make the project viability difficult or impossible. The technology choice is a result of these fundamentals.

5. Biogas plant Health & Safety

Like any other industrial activity, biogas plant accidents happen, and people get hurt or die. Not only do these accidents hurt people, but they also set back the biogas industry as a whole. It is important that biogas plant health and safety becomes an integral value of all biogas plant designers, builders or operators, as well as the general public. Obviously, plant designers and operators must work hand in hand to identify health and safety risks and take actions to mitigate them.

Biogas plants are often perceived as dangerous infrastructures because they feature impressive reservoirs containing biogas. In general, the public wrongly fears explosions because it is assumed that these reservoirs are entirely filled with pressurized explosive gases when in fact they are filled primarily with wastewater with only the top of the tank containing near atmospheric pressure biogas.

Health & Safety Risks Associated with a Biogas Plant

All the following risks are easily mitigated if health & safety are engraved within all phases of a biogas project development:

• Confined space hazards
• Gas poisoning (H2S, NH3)
• Hydraulic discharge
• High pressure gas or liquid leaks
• Rotating mechanical equipment
• Pathogens (diseases)
• Electrical system hazards

Design Phase Health & Safety

The design phase is crucial to overall biogas plant safety. The first line of defense comes from the various norms and codes that are there to protect public health and safety. By following established codes such as CSA, NFPA, OSHA, Building codes, etc., the designer ensures that the plant is safe for its operators.

Proper explosion zone classification is essential to ensure that the electrical system installed is adapted to the explosion risk. In general, biogas piping and equipment is kept outside of the buildings to avoid costly explosion-proof equipment and buildings.

The creation of confined space should be avoided as much as possible during the design phase to ensure a safe and easy-to-operate environment for the workers. It goes along that proper ventilation must be designed to ensure health and comfort of the biogas plant operators.

Furthermore, operational activities need to be understood at the design phase to identify various risks that may arise from operations. Risk analysis such as “what if” and HAZOP need to be performed to identify, quantify, and find risks mitigation strategies.

Construction Phase Health & Safety

As any other industrial construction, biogas plant construction requires proper planning and on-site measures to ensure the health and safety of the workers building the plant.

An on-site health and safety agent is often required to ensure respect of established health and safety measures.

Commissioning Phase Health & Safety

For various reasons, the commissioning of a biogas plant is probably the most dangerous phase of a biogas plant project life.

Since methane is explosive in air at a concentration between 5% and 15%, the digesters contain an explosive atmosphere at some point during the start-up phase. When methane concentration rises above 15%, the risk of explosion is considerably reduced. In fact, biogas plants are then more likely to catch fire than to explode.

Although rare, structural failures may occur during system loadings such as reservoir filling or high-pressure piping testing.

Accidental hydraulic discharges may occur during pre-operation testing of pumps and valves, which may cause injuries.

It is important to test and calibrate health & safety equipment to ensure that they are ready for service during the most dangerous phase of the project.

Operation Phase Health & Safety

Incidents and accidents occur mainly during the operation of the plant, and they are either caused by equipment failure, improper equipment utilization, or plain human errors.

The most deadly accidents are caused by gas poisoning (H2S and NH3) in open and confined spaces.

Proper confined space training and portable gas detection should be mandatory for all biogas plant operators.

Equipment lockout procedures should be strictly enforced to avoid unnecessary accidents. Proper training on processes and equipment should be mandatory for all biogas plant operators.

Health and safety equipment, such as gas detection, should be routinely checked for precision and calibration.

Proper hygienic procedures (showers, hands cleaning, etc.) need to be enforced to avoid pathogen-driven diseases.

Finally, the staff of a biogas plant should be trained in basic firefighting skills and able to practice CPR.

Click here to see US EPA common safety practices for On-Farm AD systems  Common Safety Practices→

6. Input feedstock

The feedstock dictates the biogas technology to be used, not the other way around. In order to properly design a biogas plant, the developer must fully understand its feedstock.

How will the feedstock be collected and arrive at the biogas plant? How much of it? When will it come? Which form, liquid or solid? Which type of trucks? Is there a significant variation in volumes throughout the seasons? Will this volume increase or decrease over the years?

A significant amount of work must go into trying to model the variation of feedstock throughout the days, months and years of a project. Without this information, it is likely to lead to improper sizing of biogas plants resulting in an inefficient operation and investment.

The composition of the feedstock must also be well known to identify the most suitable technologies to process this material. Furthermore, understanding feedstock composition will allow forecasting digestate quality which will help identify outlets for the digestate.

A detailed analysis of the feedstock composition from a trusted laboratory  will outline the following feedstock properties:

• Dry matter content or total solids (TS)
• Volatile solids (VS)
• Total Kedjhal Nitrogen (TKN)
• Contaminants (plastics, glass, metals, etc.)

The total solids test consists of completely drying the material to determine the mass ratio of solids versus the water in the material. For example, dairy cow slurry typically contains 10% solids and 90% water.

The volatile solids test consists of burning (600 °C) the solids from the total solids test to determine the mass ratio of volatile solids (burned) versus ashes.

Note that lignocellulosic material (wood) and plastics will volatilize but are, in fact, not digestible by anaerobic digesters.

Furthermore, anaerobic digestion may be hindered by various inhibiting compounds such as sulfur, salts, ammonia, etc.

For these reasons, additional tests may be performed on the feedstock to determine digestibility, long-term stability and biogas yield. Laboratories with biogas expertise will offer the following tests:

• Biomethane Potential (BMP)
• Anaerobic Toxicity Assay (ATA)
• Continuous Digestion

7. Biogas process technologies

Anaerobic digestion processing technologies are divided into two major families:

Wet digestion

Dry digestion.

In either case, these technologies offer either batch or continuous processes.

The process is considered wet digestion when the content of the digester is pumpable. That means that the material inside the digester has a consistency of approximately 10% dry matter or less (90% water).

There exist many configurations of wet digesters :

• Complete mix or Completely stirred tank reactor (CSTR)
• Upflow Anaerobic Sludge Blanket (UASB)
• Fixed film reactor
• Floating films reactors
• Sludge bed reactors

These configurations have been designed to optimize the process for various feedstock conditions and market applications.

The mass balance of a typical wet digestion process looks like this:

For example, 100 tonnes of solid municipal residential source separated organics (SSO) arrives at the biogas plant using wet digestion (complete mix). This feedstock needs to be pretreated to remove potential contaminants (plastics, metal, sands, etc.). Approximately 10 tonnes will be removed as contaminants and will probably be landfilled.

In order to be pumpable (10% TS), the feedstock will be diluted with water that may come from a fresh source or from a mixed of fresh and recycled water from the wastewater portion of the biogas plant. The liquid feedstock going to the digester will be approximately 250 tonnes.

In the digesters, the bacteria will consume the majority of the volatile solids in the feedstock and will convert them into biogas. Approximately 10 tonnes of gas will come out of the digesters. The more liquid digestate will represent approximately 240 tonnes.

At this point, the digestate may be applied to land directly. Please note that 100 tonnes of solid material turned into 240 tonnes of liquid and land applying the digestate in this form will present significant transportation costs.

The digestate may also be separated into a solid fraction (45 tonnes) to be land applied (or composted down to 35 tonnes) and a liquid fraction (195 tonnes) to be returned the sanitary sewage or directly back to nature.

One may be tempted to use the treated wastewater as dilution water for the input feedstock and limit the amount of water consumed and rejected by the process. It is possible only if the wastewater plant removes almost all nutrients (salts and ammonia/ammonium) in the water. Without this removal, there will be a rapid build up of nutrients in the water and this will inhibit and/or kill the anaerobic digestion process.

The process is considered dry digestion when the content of the digester is not pumpable. That means that the material inside the digester has a consistency of approximately 10% dry matter or more.

There exist many configurations of dry digesters :

• Continuous vertical
• Continuous horizontal
• Batch (Garages)

The mass balance of a typical dry digestion process

For example, 100 tonnes of solid municipal residential source separated organics (SSO) arrives at biogas plant using dry digestion (garage style). This feedstock does not need to be pretreated to remove potential contaminants (plastics, metal, sands, etc.).

In the digesters, the bacteria will consume the majority of the volatile solids in the feedstock and will convert them into biogas. Approximately 10 tonnes of gas will come out of the digesters. The solid digestate will represent approximately 90 tonnes. Note that the digestate coming out will be more liquid than the incoming material. In some cases, it may be necessary to add some bulking agent prior to digestion to ensure the out outgoing material remains solid.

In certain continuous “dry” digesters the material can come out as a thick liquid. In these instances, this liquid is still contaminated with (plastics, metals, rock, sands, etc.) and is very difficult material to recycle to land.

In our example, the solid digestate cannot be applied to land directly because the contaminants have not yet been removed. In order to remove the contaminants, the material will have to be dried enough to allow sieving without clogging the screens.

The most efficient way to dry this material is to compost it with drier material such a garden waste. Compost is a science of its own and will not be discussed here. However, we will mention that composting often required a bulking agent (25 tonnes) to ensure proper material structure complying with aerobic composting conditions. The bulking agent will be added to the tonnage of material to be sieved to achieve recycle to land quality.

The digestate may also be separated into a solid fraction (45 tonnes) to be land applied, and a liquid fraction (195 tonnes) to be returned the sanitary sewage or directly back to nature.

Here also, one may be tempted to use the treated wastewater as dilution water for the input feedstock and limit the amount of water consumed and rejected by the process. As with wet digestion, it is possible only if the wastewater plant removes almost all nutrients (salts and ammonia/ammonium) in the water. Without this removal, there will be a rapid build up of nutrients in the water and this will inhibit and/or kill the anaerobic digestion process.

Wet versus Dry digestion

As illustrated in the examples above, there is no silver bullet, and it is not true that dry digestion resolves all wastewater issues since composting plants have leachate treatment challenges of their own.

In the example above, using the wet digestion process resulted in 100 tonnes of SSO being converted into 45 tonnes of solid digestate and approximately 100 tonnes of wastewater (some recycled). The result of dry digestion process is 80 tonnes of compost recycled to land prosessed within a composting plant of equal size to the biogas plant.

In general, it is possible to remove ammonia from the wastewater the wet digestion is favored, and if the composting is possible the dry digestion is used.

8. Biogas energy

Biogas is a versatile renewable energy that can be used into direct thermal, electrical and to displace natural gas in thermal or vehicular applications.

Biogas is generated biologically from renewable biomass. Therefore, it is carbon neutral. By displacing fossil fuels with biogas energy, biogas projects achieve greenhouse gas (GHG) emissions reductions that are the cornerstone of worldwide climate change mitigation strategies.

Biogas from properly functioning anaerobic digestion system is typically composed of:

• Methane (55-65%)
• Carbon dioxide (35-45%)
• H2S (100-10000 PPM)
• Water vapor (saturated at biogas temperature)
• Ammonia (traces)

Like biogas, natural gas is composed primarily of methane. Biogas is like wet natural gas diluted with carbon dioxide and other corrosive gases. Biogas from landfills will have less methane in proportion because air (nitrogen & oxygen) gets inhaled into the biogas collection system.

Biogas utilization

Each biogas application requires specific biogas conditioning and conversion equipment.

Renewable Natural Gas (RNG) or Biomethane

There exist several technologies  that allow for cleaning or upgrading the biogas into a renewable natural gas of quality suitable for injection into the gas grid.

These technologies are:

• Adsorption or PSA
• Absorption or Organic solvent dilution

These technologies allow the removal of carbon dioxide (CO2) and other impurities (H2O, N2, H2S,  siloxanes, etc.) so that that the biomethane becomes interchangeable with conventional natural gas and can be injected safely into gas pipelines. Typically, these technologies will capture approximately 90+% of the methane in the biogas (loss of 10% of less) and will bring biomethane or renewable natural gas quality to 97+% CH4.

Click here to read more on Renewable Natural Gas→

Combined Heat & Power (CHP)

In this application biogas is cleaned up to remove primarily H2S, siloxanes, and water vapor prior to being fed into an internal combustion engine (ICE) or a micro-turbine. The engine or turbine turns an electrical generator producing electricity that is injected into the electrical grid via a set of electrical protections and transformers.

In the process, the engine generates a lot of heat. Heat recovery units are added to the engine to recover exhaust gas heat and engine cooling heat to generate hot water or low-pressure steam.

Typically, a biogas CHP will convert 40% of the biogas energy into electricity, and 50% into hot water.

CHP has a typical capacity factor of 95% which means that they produce electricity steadily throughout the year (8300+ hrs/yr) making them a reliable energy production asset.

Direct thermal (boiler or furnace)

In this application, biogas may be cleaned or not (depending on H2S or siloxanes) and fed into a boiler to make hot water or steam for industrial applications. Boiler efficiency can be as high as 95%, so almost all the biogas energy gets converted into useful energy (hot water, steam or hot air).

However, natural gas equipment must be converted in order to burn biogas efficiently since biogas has less energy because it contains 40% CO2, which is not a fuel.

Note that a boiler connected to a biogas plant will produce heat 24/7 and will require a heat client with similar energy profile needs, otherwise the energy will be wasted.

Natural Gas Vehicles (NGV) applications

Natural gas vehicles exist in all sizes and shapes such as passenger cars, SUV, pickups, minivans, buses as well as light, medium and heavy-duty trucks . Currently, NGVs are not overly popular in the Americas but they are quite common in Europe and Asia. Several vehicles OEMs offer natural gas models.

Natural gas vehicles are internal combustion engine (diesel or gasoline) vehicles that are fuelled with natural gas that is stored in either high-pressure cylinders in a gaseous form (CNG: compressed natural gas) or in cryogenic tanks in a liquid form (LNG: liquefied natural gas).

There are two (2) types of natural gas engines: diesel or gas engines.

Diesel engines are modified to replace the majority of the fuel consumed with natural gas. In such modified diesel engine, the diesel is necessary to ignite the natural gas since it will not auto-ignite under pressure like diesel does.

Gas engines are essentially gasoline engines modified to burn natural gas. Natural gas is injected (like gasoline) in a proper air-to-fuel ratio to provide the right explosive mix for used in the piston.

Typically, natural gas engines (diesel or gas) are less fuel efficient (15%) than their gasoline or diesel equivalent.

There also exist dual-fuel systems that allow the user to run on either fuel or both at the same time. In the case of diesel engines, one could run on diesel only on a mixture of natural gas and diesel in different proportion depending on load. In the case of a gas engine, typically the engine can run on either gasoline or natural gas.

These dual-fuel systems are typically used to extend vehicle range and offer flexibility by allowing the use of the vehicle in regions where natural gas stations are not available.

In Canada, because it is allowed to carry heavier loads, that is why a lot of heavy-duty transportation is performed with 15-liter diesel engines (typically 500 HP). Currently, there are no 15-liter OEM heavy-duty natural gas trucks. Most heavy-duty natural gas trucks revolve around a 12-liter Cummins gas engine (400 HP).

Biogas or Natural Gas as a Fuel

Biogas cannot be used directly in compressed natural gas vehicles. Because of its corrosive components, biogas will compromise the safety of the high-pressure cylinders. Likewise, biogas cannot be liquefied without removing its H2S, CO2 and H2O otherwise it will corrode or ice up (wet and dry ice) the liquefaction process.

However, if biogas is converted to renewable natural gas (RNG) or biomethane as described above, it can thereafter be used interchangeably with natural gas to fill up natural gas vehicles .

Typically the biogas plant will inject its biomethane or RNG into the grid and the NGV station will be built somewhere along the grid. In this scenario, the grid acts as a buffer because the filling cycles are unlikely to match the steady production of a biogas plant.

Natural gas vehicles offer a 25% reduction in GHG emissions over the same application in diesel.

By using RNG or biomethane we can reduce by over 90% the GHG emissions in transportation applications.

Liquefied natural gas (LNG) is natural gas that has been cooled down to -160°C at which point it changes phases to liquefied and uses 600 times less volume.

LNG offers more energy density at 22 MJ per liter than compressed natural gas (CNG) at 9 MJ per liter @ 3600 psig. For this reason, LNG is often used for applications that require a longer range of operation like heavy-duty trucks. In comparison, diesel energy density is 36 MJ/liter.

CNG is used for all type of transportation applications but offers a shorter range of operation.

All natural gas engines use the natural gas in gaseous form at relatively low pressure.

In the case of CNG, the pressure is downgraded via a pressure regulator. Depressurizing the gas will cause it to cool substantially, that’s why it is paramount that the natural gas is very dry prior to compression to avoid icing during decompression in the vehicle fuel system.

In the case of LNG, liquefied natural gas stored in a cryogenic tank (essentially a thermos) is pumped into a vaporizer that will heat the liquefied natural gas above its boiling point (-160C) where it will turn into gas and will be fed to the engine. When the vehicle is not used the liquefied natural gas will start to boil off when the temperature in the tank goes above -160C. The boil-off is gaseous natural gas that will build pressure into the cryogenic tank (approx 100 psig). A pressure release valve will open and vent the excess gas to the atmosphere. So, LNG vehicles cannot be stored inside. Moreover, LNG vehicles should not stand still for a long period of time, otherwise, they will vent their fuel to the atmosphere and generate greenhouse gases. CNG vehicles do not have this venting/fuel losses issue.

Both technologies, CNG and LNG, have their pros and cons and the choice really depends on the application.

Nevertheless, the CNG technology is more readily adopted than LNG because of its simplicity and availability of fuel (LNG production is complex and far apart).

Natural Gas Stations

There exist three (3) types of NGV stations: LNG, CNG time-fill, and CNG fast-fill.

LNG stations are essentially composed of cryogenic tanks, pumps, dispensers and cooling systems. LNG is brought from the production plant to the station with tankers and transferred into the station cryogenic tank. The cryogenic tank is kept cool using various techniques (e.g., liquid nitrogen) to avoid boil-off of the fuel. Fuelling vehicles pull up to the dispenser and connect a hose to the cryogenic tank on the vehicles and start pumping. Displaced gaseous natural gas filling the tank is recovered by the same nozzle and sent into the station tank to ensure no venting of natural gas to the atmosphere.

CNG time-fill stations are stations that fill up the vehicles over a long period of time (ex. overnight). These stations are composed of a gas dryer, a high-power compressor, and several dispensing hoses upon which the vehicles are connected to be filled over a long period of time (10 hours) allowing for cooling of the cylinders over time as well as a truly complete fill.

CNG fast-fill stations are stations that allow for a quick fill up the vehicle equivalent to their diesel or gasoline counterparts. These stations are composed of a gas dryer, a high power compressor, high-pressure buffer cylinders (4500 psig), dispensing valves and dispensers similar to gasoline or diesel types. The vehicles pull up to the dispenser and connect the high-pressure hose to their vehicle cylinders and start filling. Initially, the pressure from the high-pressure buffer cylinders will start the fill up without the compressor and as the pressure between the station and the vehicle equilibrates the compressor will kick in to complete the fill.

As you fill up a cylinder quickly the pressure and temperature will rise. When the maximum pressure is reached (i.e., 4000 psig) the compressor will stop. But has the cylinder cools down, it will lose pressure and may settle down to 3600 psig (10% less than rated tankage).

NGV Economics

NGV vehicles cost more money than their equivalent counterpart in diesel and gasoline.

In either technology, CNG or LNG, most of the additional cost comes from the onboard storage tanks (high-pressure cylinders or cryogenic tanks).

Natural gas on the grid is abundant and cheap ($5-8/GJ). Diesel is highly fluctuating but in general significantly more expensive ($25-35/GJ).

The compression or liquefaction of the natural gas to make it NGV usable will cost an additional $5-10/GJ. Therefore, natural gas ready for NGV consumption will cost approximately $12-20/GJ after station operator’s profit. The higher end of this range will represent the cost of LNG and the lower end a large volume CNG time-fill station.

So, it appears that NGV should cost 50% less to operate than diesel or gasoline equivalent.

In reality, the additional cost of the vehicle, modifications to the garage to make it suitable for natural gas vehicle maintenance (explosion issues), incomplete fills, natural gas engine lesser efficiency all reduce this saving to approximately 25 to 30%.

So why isn’t there more NGV on the roads?

There are several factors that slow down the deployment of NGV’s, such as:

• Lack of knowledge
• Resistance to changes
• Refuelling anxiety (vehicle range)
• Lack of NGV fuelling stations
• Limited OEM vehicles offer
• NGV price tags
• Fluctuation of diesel price

There is a chicken and egg issue (stations Vs vehicles) that government with interest in biogas and/or natural gas production/distribution development and GHG reduction should resolve by providing incentives to build more stations and buy more vehicles until the industry gathers a critical mass.

Click here to use our CNG fleet savings calculator→

Biogas production versus consumption

Stable anaerobic digestion process will produce biogas steadily 24 hours per day, 365 days per year without any interruption.

The biogas energy clients must have a similar consumption profile or must provide a buffering capacity to absorb the differences between the production and consumption.

Biogas storage

Biogas is typically stored at near atmospheric pressure. Since biogas in its raw form is wet and corrosive, it cannot be stored in pressure vessels because it will cause corrosion leading to safety issues.

Pressure storage is possible only if the biogas has been upgraded to renewable natural gas pipeline specifications.

Storage at atmospheric pressure takes up a significant volume.

9. Digestate management

As illustrated in the section about Wet Versus Dry Digestion, there are essentially five (5) types of digestate:

• Clean liquid digestate
• Clean solid digestate
• Contaminated liquid digestate
• Contaminated solid digestate
• Contaminated semi-solid digestate

Only the clean liquid or solid digestates can be directly applied to land without further treatment. These digestates often originate from manure, food waste or pre-treated SSO digesters where there are virtually no contaminants in the feedstock to be digested.

Most of the time, liquid digestate is separated into solid and liquid fractions by using liquid/solid separation technologies.

Solid fraction

As mentioned earlier, clean solid digestate can be applied to land directly.

Contaminated solids coming from a dry digester or a liquid/solid separation equipment will need to be composted to achieve proper dryness for the sieving of contaminants prior to land application.

Liquid fraction

Also mentioned earlier, clean liquid digestate can be applied to land directly.

Contaminated liquids coming from a wet digester or a liquid/solid separation equipment will require proper wastewater treatment such as sedimentation of suspended solids, abatement of COD, BOD and ammonia compounds.

10. Biogas plant components

Several aspects need to be studied in the choice of a site:

• Dominant wind/Air dispersion
• Road access
• Proximity to energy grids
• Geotechnical
• Contamination
• Proximity of neighbors

The biogas plant will be equipped with roads, scale, drainage, landscaping, etc.

Biogas plants will have one or more building(s) to contain the process and all the human resources operating and maintaining it. These building may require special architectural specifications for aesthetic, comfort and efficiency.

This is the area of the biogas plant where the feedstock is received. It may be designed to receive several trucks of various sizes. Typically, the reception of material will be indoor, and this is where most of the odor challenges arise. Opening and closing of doors for trucks is typically the main source of odors for a biogas plant.

Feedstock conditioning

Depending on the technology used, this is where the received material is prepared for feeding into digesters. It may be decontaminated by using technologies such as:

• Hydro-pulpers
• Separating hammermills

Anaerobic digestion

Central equipment of a biogas plant, the digester is where feedstock is biodegraded by anaerobic bacterias to generate the biogas and digestate.

Digestate treatment

Separation : The liquid digestate may be squeezed to separate the liquid fraction from the solids.

Composting : A biogas plant may be equipped with a composting plant to stabilize or allow the drying and decontamination of the solid fraction of its digestate.

Wastewater treatment: The liquid fraction of the digestate often needs to be treated prior to disposal into nature or into sewage.

Odour treatment

Odors generated inside the building need to be controlled (with proper ventilation) and treated prior to rejection into the atmosphere.

Biogas handling

The following list includes all the equipment necessary to handle the biogas:

• Condensate traps

Biogas treatment

Equipment necessary to clean the biogas to the proper specifications for the intended application.

Equipment that will allow utilization of the biogas or biomethane (RNG) as follows:

• Biogas upgrader

11. Biogas project economics

Biogas plant economics are complex and vary with local market conditions.

Biogas plants can generate several revenues such as:

• Treatment fees : Money you receive (or save) for accepting and treating the feedstock. In North America, this represents the majority of the income of the project (60-80%).
• Energy sales : Money you receive for selling the biogas energy (20-40% of income). Only in markets with generous feed-in-tariffs will the energy sales constitute the majority of the project income.
• Digestate/compost sales : Money you receive (or save) for selling your digestate or compost. Typically, you have to pay to dispose of the digestate or compost.
• Carbon credits : Biogas plants do generate carbon credits that can be sold. However, the volume is small, and the validation and certification fees often take the lion’s share of this income.

Biogas plants are financed using equity, debt, subsidies and tax credits. Municipalities will finance their project with subsidies and debt. Private projects will require significant equity (25%) and energy contracts from solid clients to secure their debt.

Operational expenses (OPEX) are typically composed of:

• Debt service charges
• Disposal charges (contaminants, digestate)
• Energy (consumed)
• Equipment maintenance
• Consumables

Capital expenses (CAPEX) vary greatly between projects.

Municipal projects are the most complex and expensive. Typically, in North America, they cost anywhere between $800-$1500/tonne of annual treatment capacity.

Agricultural projects are the simplest and least expensive. Typically, in North America, they cost anywhere between $4500-8000/kW electrical installed.

12. Biogas project development

There exist several critical steps in the realization of a successful biogas project, though project developers tend to focus their effort on determining the best anaerobic digestion technology for their project instead of getting a firm grip on their project fundamentals before anything else.

Biogas plants are large expensive finicky biological systems that require careful planning. In fact, most biogas plant failures are due to poor planning and/or not paying close enough attention to project fundamentals such as feedstock, energy utilization, digestate management, and financing.

Studies & Preliminary Engineering

A lot of work must be put into establishing the project fundamentals (studies).

Establishing expected feedstock collection methods (trucks, bins, routes, etc.), quantity, quality and overall logistics (collection contracts, transfer stations, hours of reception, etc.) often require significant studies and planning. One must not underestimate the effort necessary to understand how much, when, and in what state the organic waste will get to the biogas plant.

Finding a proper site for a biogas plant also requires significant effort. The site needs to meet proper zoning, and environmental regulations (proximity to houses, rivers, wells, etc.). The site must also be easily accessible by road for the feedstock to come in, and the digestate to come out without causing too much traffic nuisance to the neighborhood. Finally, the site must be close an energy grid (gas or electrical) in order for the biogas energy to be exported efficiently.

Digestate management must be studied carefully since the disposal of digestate is often the largest operational cost of a biogas plant. All possible avenues of disposal, transformation or treatment must be taken into consideration to ensure that the final strategy for digestate management is the most efficient. Otherwise, the biogas plant economics will be less than optimal.

Once the fundamentals are established, a concept will be drawn and priced to get a project budget.

Beyond this initial engineering concept, further studies and analysis are often required as follows:

• Site contamination (soil, buildings, etc.)
• Risks analysis
• Value analysis
• Applicable codes, rules and regulations
• Timeline estimation

Proper preliminary engineering is essential to develop a viable business case that will justify the significant financing required to realize the biogas project.

Detailed engineering of a biogas project is composed of several disciplines working in close collaboration such as:

Project Management

To ensure that all engineering disciplines are working together closely to efficiently deliver an optimal design.

Process Engineering

To determine the processes required for feedstock conditioning, anaerobic digestion, gas treatment, digestate treatment, odor management, etc.

Mechanical Engineering

To deal with all aspect of material handling: solid waste reception & conveying, liquid pumping, gas compression, etc.

Electrical Engineering

To deal with all aspects of power supply and automation (sensors, PLCs and actuators).

Civil Engineering

To handle excavation, filling, and utility services (drainage, sewer, water, etc.).

Structural Engineering

To ensure foundations are safe and sound to support the structural load of the building bearing the process equipment.

Building Mechanical Engineering

To handle all aspects of ventilation, fire protection, lighting, non-process electricity and plumbing.

Architecture

To handle all technical and visual aspects of the site and buildings.

Detailed engineering is performed to generate drawings and establish specifications for all the components of the biogas plant. The design must obviously comply with local codes and regulations.

Permitting & Energy Contracting

Once the drawings and specifications are completed, the project must obtain all necessary permits for construction. Depending on the jurisdiction, there are usually several different authorizations required from local municipalities and environmental agencies.

In parallel, an energy contract should be negotiated with the local energy provider. These contracts can be technically and legally complex and will require proper technical and legal support.

Do not underestimate the time required to perform permitting and/or negotiate an energy contract with energy providers.

Financing will only occur if the project is permitted and if there is a serious client for the biogas energy.

Equity and guarantees will be demanded by financiers. Due diligence will be performed on the design, the clients, the management, risk analysis, etc.

Only upon satisfying all these answers will the project funding be confirmed.

Procurement

Purchasing the products and services to realize the design. Typically, the procurement of the plant will be broken down into several contracts, such as:

• Site decontamination
• Civil works
• Foundations/concrete work
• Quality control labs (materials)
• Building structure
• Building envelope
• Building mechanicals
• Process equipment (digesters, gas upgrader, hydropulper, conveyors, etc.)
• Mechanical installation
• Construction management
• Engineering supervision

Public entities, such as a municipality, will often issue a request for proposals (RFP) for a design-build (DB) or a design-build-operate (DBO) so that all these procurement contracts are performed by the chosen contractor. Municipal procurement is often cumbersome and slow, thus one should expect significant potential delays in the realization of the biogas project.

Construction

Once all the permits are granted and the financing obtained, the procurement and construction can begin.

Proper construction management, supervised the general contractor, is essential to ensure that procurement and the execution of the various contracts are well timed to avoid construction conflicts and unnecessary delays.

Engineering supervision is necessary to ensure that the constructions are in accordance with the design.

Construction sites must be managed properly to ensure security and safety of the workforce. The site must be able to accommodate temporary services (electricity, sanitation, accommodations, etc.) as well as material and equipment reception (laydown) and storage.

Commissioning

Upon completion of the various phases of the biogas project, pre-operational verifications must be performed to ensure that all equipment was properly installed. At this point in time, a partial acceptance of the biogas plant can be granted so that the various contractors can get paid.

After verification, the anaerobic digestion process may be started. There must be a proper coordination with the feedstock collectors to ensure they can sufficiently and efficiently supply the process with the feedstock.

Upon achievement of the performance of the biogas plant, a final acceptance may be granted to pay the balance of suppliers and officially begin the operation of the biogas plant.

Day-to-day operation of the biogas plant includes the following tasks:

Reception of Material

Operators will coordinate the logistics of feedstock arrival, perform visual inspection of the received material, and log tonnages received.

Conditioning of Material

Operators will transfer the material from the reception to the conditioning equipment.

Anaerobic Digestion Process Control

Operators will operate and monitor the various aspects of the anaerobic digestion process, such as temperature, OLR, FOS/TAC, pH, etc.

Operation of Digestate Treatment System

Operators will attend to the dewatering, drying, and water treatment processes.

Operation of Wastewater Process

Operators will ensure that the water treatment process is functional.

Disposal of Contaminants

Operators will manage the logistics and disposal of all contaminants generated by the process.

Operation of Composting Process (if there is)

Operators will operate and monitor the various aspects of the composting process.

Disposal of Digestate/Compost

Operators will manage the disposal of the digestate/compost.

Maintenance

Biogas plants are equipped with multiple equipment that must be maintained to remain optimally functional throughout their entire planned life cycle.

Also, operators must establish and perform preventive maintenance on the equipment.

Unplanned maintenance and repairs are also to be expected and required daily.

Optimization

Optimization of the biogas plant may be achieved by performing modifications to improve processes or performance.

Nowadays, online documents are constant work in progress that can be re-edited at a click of a button. In this new world, the concept of afterword is somehow obsolete. However, I would like to say that writing the first version of this handbook has procured me a lot of satisfaction and I hope I will derive the same feeling trying to make it progress over time to make it become a work of reference used by all getting on the trail to the development of a productive biogas plant.

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Biogas plant Luchky with MWM gas engines

Belgorod, March 17, 2014

On February 4, Minister President of the Russian Federation, Dmitry Medvedev, took some time out from an external board meeting of the Executive Committee for Economic Modernization and Innovative Development to visit the Luchky biogas plant in the Belgorod region.

The operator of Russia’s largest biogas plant is AltEnergo. The company, established in 2009 in the Russian administrative district of Belgorod, specializes in implementing innovative projects in the field of renewable energies, with a focus on solar power plants, wind turbines and biogas facilities. There is no combined heat and power (CHP) plant in Russia at the moment that is as modern and productive as the plant in Luchky. The two MWM TCG 2016 V16 gas engines installed in the biogas plant each produce 800 kW of output, generating some 56,000 kilowatt hours of electricity per day and thus providing for the energy needs of more than 30,000 inhabitants in the Prokhorovsky District. As one of Russia’s first biogas plants, the Luchky plant was included in the national distribution plan for power generation plants and certified as a facility for power production from renewable energy.

As Viktor Filatov, General Manager of AltEnergo, explained to the Minister President, the cogeneration plant processes organic waste from four agricultural companies, including a meat processing facility, along with the company Agrobelogorje. In all, an annual 75,000 tones of waste are converted into electricity, heat and organic fertilizer. The biogas created in the course of the process can be cleaned and delivered to filling stations.

MWM in Russia

The MWM sales subsidiary for Russia and neighboring markets was established in May 2011 and currently has three employees. MWM itself has been active in Russia for more than ten years. The office is based in the center of Moscow in the “House of German Economy” where a whole host of other German companies are located. As one of the world’s fastest-growing energy markets, Russia enjoys a high level of attractiveness for the gas engine and cogen power plant experts from Mannheim.

Contact: MWM GmbH Representation in Moscow Caterpillar Energy Solutions GmbH Bldg. 1, 5/2, 1st Kazachiy per. 119017 Moscow Russian Federation Phone +7 495 234 49 41 E info-moscow@mwm.net

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Biogas technology – a contemporary method for processing organic wastes

• Published: 24 September 2010
• Volume 46 , pages 308–311, ( 2010 )

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• D. Yu. Suslov 1 &
• L. A. Kushchev 1  

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Work is devoted to resolving ecological problems of the utilization of organic wastes from the Russian Federation agro-industrial complex. A promising processing method is biochemical transformation by anaerobic fermentation in biogas units with simultaneous production of highly effective biofertilizer and a power generation product, i.e., biogas. Biogas technology is proposed on the basis of a bubbling bioreactor of original construction that makes it possible to increase the intensity, stability and completeness of biochemical processes, and also productivity.

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Research Center for Problems of Managing Resource Saving and Wastes: Materials of Website , http://nitspuro.org.ru .

V. Baadeer, E. Done, and M. Breniderfer, Biogas. Theory and Practice [Russian translation], Kolos, Moscow (1982).

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D. Yu. Suslov and A. E. Polozov, “Reduction in gas lost in substrate preparation in a bioreactor,” Automation and Energy Saving of Engineering Production, Technology and Machine, Instrument, and Equipment Reliability: Coll. Works , VGTU, Vologda (2008).

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Translated from Khimicheskoe i Neftegazovoe Mashinostroenie, No. 5, pp. 44–46, May, 2010.

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Suslov, D.Y., Kushchev, L.A. Biogas technology – a contemporary method for processing organic wastes. Chem Petrol Eng 46 , 308–311 (2010). https://doi.org/10.1007/s10556-010-9334-5

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Published : 24 September 2010

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DOI : https://doi.org/10.1007/s10556-010-9334-5

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