B5: Opportunity Assessment

Anaerobic digestion for electricity, transport and gas Report at a glance

RACEforBusiness

Research themeB5: Anaerobic digestion for electricity, transport and gas

ISBN: 978-1-922746-37-5

Industry Report

An Opportunity Assessment for RACE for 2030 CRC

May 2023

Citations

Kaparaju, P., Conde, E., Nghiem, L., Trianni, A., Cantley–Smith, R., Leak, J , Katic, M., Nguyen, L., Jacobs, B., Cunningham, R. (2023) Anaerobic digestion for electricity, transport and gas. Final report of Opportunity Assessment for research theme B5

Prepared for RACE for 2030 CRC.

Project Partners

Project team

Griffith University

• P. Kaparaju

• E. Conde

University of Technology Sydney

• L. Nghiem

• A. Trianni

• R. Cantley–Smith

• M. Katic

• L. Nguyen

• B. Jacobs

• R. Cunningham

A2EP

• J. Leak

AMPC

• M. Deegan

Acknowledgements

The authors would like to gratefully acknowledge the valued contributions of the Industry Reference Group Members: AGL, AgVic, Australian Meat Processor Corporation, APA Group, Australian Renewable Energy Agency (ARENA), Bioenergy Australia, Clean Cowra, Clean Energy Finance Corporation, Clean Energy Regulator, Department of Energy, Environment and Climate Action (DEECA) (VIC), Department of Planning and Environment (NSW), Energy Developments Limited, Emissions Reduction Fund, ENEA Consulting (now Blunomy), Gaia Envirotech, Helmont Energy Pty Ltd, Jemena, Queensland Farmers Federation, Singh Farming, Sydney Water, and Veolia.

Although the IRG members and partners have provided valuable inputs and feedback throughout the project, the findings and recommendation included in this report do not necessarily reflect the views of each individual member or their organisation. The views expressed herein which are associated with, or refer to, ARENA are not necessarily the views of the Australian Government, and the Australian Government does not accept responsibility for any information or advice contained in this regard.

Acknowledgement of Country

The authors of this report would like to respectfully acknowledge the Traditional Owners of the ancestral lands throughout Australia and their connection to land, sea and community. We recognise their continuing connection to the land, waters and culture and pay our respects to them, their cultures and to their Elders past, present, and emerging.

What is RACE for 2030?

RACE for 2030 CRC is a 10-year cooperative research centre with AUD350 million of resources to fund research towards a reliable, affordable, and clean energy future. https://www.racefor2030.com.au

Disclaimer

The authors have used all due care and skill to ensure the material is accurate as at the date of this report. The authors do not accept any responsibility for any loss that may arise by anyone relying upon its contents.

What is in the report?

This opportunity assessment reports on the state-of-the-art of anaerobic digestion (AD) in Australia, including feedstock sustainability, conversion technologies, the current market, future potential, barriers to achieving the full market potential and research needs. The report complements existing work such as the 2021 Australian Biomass for Bioenergy Assessment (ABBA) and Australia’s Bioenergy Roadmap, which were funded by the Australian Renewable Energy Agency (ARENA). This report estimates the potential contribution that biogas from AD could make to market for electricity, transport and gas including opportunities in biogas upgrading and grid injection, applications for AD digestate and potential uses of biogenic carbon dioxide (BioCO2)

The report was peer reviewed by industry partners and the full details have been included in the public report.

Why is it important?

Biogas from AD is a renewable, distributed and dispatchable energy resource, which can be used for baseload or load-following power generation, thermal energy or as a transport fuel. As Figure 1 indicates, in 2019 many of the existing biogas plants were flaring the biogas, rather than using it for heat, electricity or both. There were no commercial plants upgrading biogas for grid injection and only one large-scale biogas plant in operation, although 20 are planned.

Figure 1 Current market status - number

(%) in Australia in 2019

If the 62 million tonnes dry matter (TS) of biomass available annually in Australia were converted to biogas, it would produce 371 PJ/yr In contrast, of the total Australian energy consumption of 6,014 PJ in 2019-2020, only 17 PJ (< 0.3%) was produced from biogas This suggests that biogas from AD is currently a largely untapped renewable resource in Australia.

What did we do?

The project team undertook a comprehensive review of all available literature from scientific journals and the public domain, including reports on Australian biomass availability This was used to estimate the total biomass potential as shown over different time horizons to 2050

The information on the biomass potential was then used to estimate the potential contribution the biomass could make if it was converted to biogas The Australian energy market options include behind the meter use, grid injection, power-gas exchange for energy storage projects and Bio-CO2 The results suggests that biogas could account for more than 50% of all gas consumption in Australia by 2050 once the decrease in fossil gas consumption is factored in.

To achieve the technical potential of biogas, the report identified social, technical, economic/market and regulatory barriers that must be overcome. In particular, the lack of incentives has hindered the wider uptake of AD, resulting in lost opportunities for decarbonising the Australian economy. Policy incentives to encourage AD use for biogas production, for example through inclusion of Australian Carbon Credit Units (ACCUs) for greenhouse gas emissions abatement and carbon sequestration for biogas projects, could help support the economics of AD projects. There are also currently no regulations relating to the certification of renewable gas, such as those that exist in the EU, UK and USA A detailed case study of EU Renewable Energy Regulation is provided as a model.

What difference will it make?

Behind the meter biogas projects, located where biomass and energy demand coexist are currently the most financially viable and could be deployed sector-wide. For example, at wastewater treatment plants across Australia. Some of the innovations which could help unlock the full potential of behind the meter biogas include improvements and standardisation of AD design, and a transition from internal combustion engines to fuel cells and power to gas (P2G) systems using excess electricity from solar and wind.

Alternative biogas end uses such as grid-injection or compressed natural gas and liquified natural gas in transport, are other potential uses which have yet to be implemented in Australia, whereas they are already operating on a commercial scale in markets such as Europe and North America. The report also looks at optimising the production and use of digestate and biosolids, AD by products which can be used to replace fossil-based fertilisers.

This project has estimated cumulative impacts of AD in the Australian energy market including potential greenhouse gas savings from biomethane replacing grid electricity, fossil gas for heat production and transport and petrol in transport as shown in Table 1.

Estimated emissions reductions from using biomethane were 12.5 Mt CO2-e for grid electricity, 4 Mt CO2-e for heat production and 0.007 Mt CO2-e for transport. Most of the savings arise from using agricultural crop residues on farm (from grain, sugarcane residue, rice, fruit and vegetable production), agro-industrial wastes from food processing (such as bagasse, rice husk etc) and biowaste from the municipal solid waste industry (food and garden organic wastes). Smaller benefits are derived from livestock manure from intensive production systems (beef, pork, poultry), food processing and municipal sewage sludge. Energy crops and grass grown specifically for energy production were not considered, due to sustainability issues relating to land clearance and resulting biodiversity loss, foodfuel competition and eutrophication due to fertiliser use.

What’s next?

The report recommends implementing the proposed research projects to address current barriers and market failures, grouped into four main areas: (1) growth of the feedstock supply; (2) scaling-up and increasing efficiency; (3) improving the economics for new infrastructure; and (4) markets for new AD products. These areas represent the critical issues for the development of the biogas/biomethane industry over the next decade, namely feedstock availability, scale, market and technology adaptation and development. Research investment of at least $10 million per year will be required to support these research areas, which represents 1% of the potential revenue that the resulting projects could generate.