Value creation of straw-based biogas in China

Abstract

Background

Value creation is a common concept in business, and the core purpose of economic activity. “Value creation” of biogas refers to how much biogas value can be created when it is used for different purposes. The fact that 1 m³ of biogas contains enough value as an energy carrier to replace coal, liquefied petroleum gas (LPG), and natural gas in the power and heat sector, as well as gasoline and diesel as a vehicle fuel, receives too little attention in China. The use of agricultural residues and waste is not only a key element for the reduction of resource demand and climate gas emissions, but also offers the potential for value creation. Biogas provision, which is being promoted more and more in China, could be the key to unlocking this potential.

Results

To assess the potential of value creation for straw-based biogas in China, we calculated the value created by substituting fossil fuels by biogas in different provinces. Likewise, we calculated the collectable straw potential between 2011 and 2020 by using data regarding methane yield, the official biogas electricity price and rate of subsidy by province, as well as market prices of fossil fuels issued by the National Bureau of Statistics as unit price. Furthermore, the amount of value that 1 m³ methane creates in different applications is compared in Chinese yuan, euro and dollar.

Conclusions

The results showed that value creation for vehicle use is the highest, which reached 5.52/6.57/8.16 yuan/m³ methane (0.789/0.939/1.166 USD/m³) as a gasoline replacement, and 5.17/5.81/7.07 yuan/m³ methane (0.699/0.785/0.955 USD/m³) as a diesel replacement; followed by substitution of natural gas, and LPG; the current most common use, electricity generated by the CHP plant showed a relatively low value, which reached 1.08/1.90 yuan/m³ methane (0.154/0.271 USD/m³); and the heat supply showed the lowest with only 0.56 yuan/m³ methane (0.08 USD/m³). This scientific calculation method of the value of biogas as an energy carrier provides a basis for further development of the biogas industry. This paper initially raises this research question in China.