biogas business plan pdf

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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The Key Elements of a Biogas Plant Business Plan

How Biogas to Energy Production Works

How biogas production from agricultural waste revolutionizes renewable energy.

• Hydrolysis: Here, larger organic molecules from the agricultural waste are broken down into smaller units like sugars and amino acids.
• Acidogenesis: These smaller molecules are further processed into volatile fatty acids and alcohols.
• Acetogenesis: The volatile fatty acids and alcohols transform into acetic acid, hydrogen, and carbon dioxide.
• Methanogenesis: Methane is produced by methanogens, a specific type of microorganism. They convert the acetic acid and hydrogen into methane and carbon dioxide.

Why Renewable Feedstock Matters: The Fuel Driving Your Biogas Farm's Success

Types of Renewable Feedstocks for Biogas Production

Agricultural residues.

• Corn Farms: After the corn is harvested, the remaining stalks can be used as feedstock.
• Wheat Fields: Similar to corn, the straw left after wheat harvesting is a valuable feedstock.
• Rice Paddies : Rice husks and straws can also be used in biogas production.

Horse Manure

• Equestrian Centers: Large equestrian centers often produce significant amounts of horse manure that can be used for biogas production.
• Horse Farms: Smaller horse farms may also offer a consistent supply of manure.
• Racing Tracks: Locations with horse racing tracks often have an abundance of horse manure.

Chicken Manure

• Poultry Farms: Large-scale poultry farms can provide a consistent supply of chicken manure.
• Egg Production Facilities: These facilities often have large amounts of chicken manure as a by-product.
• Integrated Agriculture Operations: Farms that combine crop and poultry farming can use chicken manure for biogas and the remaining digestate as fertilizer.
• Restaurants and Cafeterias: These establishments produce a significant amount of food waste that can be collected for biogas production.
• Grocery Stores: Expired produce and other food items can be sourced from grocery stores.
• Municipal Waste Collection: Some cities have organic waste collection programs that can provide a source of household food waste.
• Municipal Landfills: Many cities are now capturing biogas from their landfills for energy production.
• Industrial Waste Landfills: Some industrial operations have their own landfills, which can also be sources of biogas.
• Closed Landfills: Even after they are no longer in use, closed landfills can continue to produce biogas for several years.

The Choice of Feedstock Determines the Gas Yield

Economic benefits of biogas: why it matters now more than ever, what is the required investment to set up a biogas plant.

The Startup Costs of a Biogas Plant

• Capacity: The digester's size is a significant determinant. While larger digesters can offer economies of scale, they also demand a more substantial initial investment.
• Technology: Different technologies, such as plug flow, complete mix, or fixed film, come with their own set of considerations. More advanced technologies might promise higher efficiency, but they could also entail a higher cost.
• Material: The choice of material, like stainless steel versus concrete, can influence durability and cost. For instance, stainless steel digesters are known for their longevity but might be pricier than other materials.
• Installation: Proper installation is essential for ensuring the digester's long-term efficiency and safety. This process might include steps like soil testing, site preparation, and the involvement of specialized labor (Source: S. Environmental Protection Agency AgSTAR ).
• Chemical Scrubbers: These use chemicals to absorb and remove impurities. They are typically more efficient than biological variants but might have higher operational costs due to the chemicals used.
• Biological Scrubbers: These utilize microorganisms to convert impurities like H2S into harmless compounds. They are more environmentally friendly but might not achieve the same level of purification as chemical scrubbers.
• Water Scrubbing: This method uses water to absorb CO2 from the biogas. It's a common and cost-effective method but requires proper water treatment systems to handle the resultant wastewater.
• Compressors: Essential for compressing biogas for storage or transport. The choice of compressor can be influenced by factors like capacity and efficiency. It's crucial to select a compressor that can handle the specific requirements of the biogas plant, considering factors like the volume of gas produced and the intended storage or distribution method.
• Monitoring Equipment: Incorporating advanced sensors and software is crucial for real-time monitoring, ensuring the quality of the gas. These systems can detect any anomalies or sudden changes in the gas composition, allowing for timely interventions. Modern monitoring systems can also be integrated with cloud-based platforms, enabling remote monitoring and data analytics.
• Land Leveling: Before any construction begins, the land must be adequately leveled. This might necessitate specialized machinery and expertise. A level ground ensures stability and can prevent future structural issues.
• Drainage Systems: Efficient drainage systems are paramount. They manage water flow, avert potential flooding, and ensure that the biogas plant operates without water-related disruptions. Proper drainage also protects the equipment and infrastructure from water damage, which could lead to costly repairs.
• Foundational Structures: The foundation is the bedrock of your biogas plant. It involves selecting the right materials, such as concrete, and ensuring they are of high quality. The labor involved in laying down this foundation is also a significant consideration, requiring skilled workers familiar with biogas plant construction (Source: org )
• Vehicles: Different types of waste, varying in consistency, demand specialized vehicles. For instance, agricultural waste can range from liquid to solid, and the handling equipment must be chosen accordingly.
• Storage Facilities: The consistency of waste, influenced by factors like climate, animal type, and feed, determines the storage requirements. Some waste might need refrigerated or airtight storage facilities, while others could require solid or liquid storage systems.
• Conveyor Systems: Efficient waste management often involves automated conveyor systems to streamline the transfer of waste from storage to treatment facilities (Source: sc.egov.usda.gov )
• Control Panels: Modern biogas plants employ advanced control panels equipped with touch-screen interfaces and remote monitoring, enhancing operational control and efficiency.
• Safety Systems: Prioritizing safety, these plants incorporate features like fire suppression systems, emergency shutdown mechanisms, and alarms to safeguard both the facility and its operators.
• Location Matters : Selecting a site near feedstock sources and utility grids can streamline operations, reducing transportation and energy costs.
• Size and Scalability : The land's dimensions should not only cater to the current plant capacity but also allow room for potential future expansions.
• Leasing vs. Buying : While purchasing land is a significant upfront investment, it offers long-term security. Conversely, a long-term lease might lower initial costs, but it's essential to weigh the long-term financial implications and flexibility it offers.
• Feasibility Studies: A comprehensive analysis that evaluates the plant's potential impact, both economically and environmentally. It's the blueprint that guides all subsequent decisions.
• Design Optimization: Engaging with industry experts ensures the plant is designed for maximum efficiency, longevity, and adaptability to future technological advancements.
• Regulatory Compliance: With ever-evolving local, state, and federal regulations, having a dedicated team or consultant ensures the plant remains compliant, avoiding potential legal pitfalls.
• Permits: Beyond the basic operational permits, understanding and acquiring additional permits can open doors to subsidies, grants, and other benefits.
• Contracts: Solid contracts form the backbone of supply chain reliability. They ensure consistent feedstock supply, utility connections, and labor relations, safeguarding against potential disruptions.
• Legal Consultation: In a sector where regulations can be intricate, specialized legal counsel can preemptively address issues, saving potential future costs and ensuring smoother operations.
• Branding: A well-defined brand communicates the plant's values, vision, and commitment to sustainability, attracting both consumers and potential investors.
• Outreach: Engaging with the local community, stakeholders, and potential partners through seminars, workshops, and collaborations can solidify the plant's position in the market.
• Public Relations: Strategic PR initiatives, from press releases to media partnerships, can amplify the plant's achievements, innovations, and milestones, attracting further investment and partnerships.

Is Biogas a Profitable Business? Revenues You Can Obtain from a Biogas Plant

• Own consumption: The produced Electricity preferably can be used by the producer itself, for example, powering a sugar production plant or a poultry farm. This now can lead to significant savings in electricity purchasing costs.
• Selling Electricity to a third party : The revenue from selling this electricity can preferably be sold via a pre-agreed price under a Power Purchase Agreement (PPA) to a long-term buyer such as an Electricity Distribution Company. A PPA is needed as normally as the Biogas Plant will need to connect to the electricity grid by, e.g., accessing a substation. In this case, the electricity price will need to be negotiated but can take into account the benefits of providing a steady source of renewable energy.
• Milk Farmers: By producing their own electricity, dairy farms can significantly reduce their energy bills.
• Sugar Plants: These facilities can use the residue from sugar production as feedstock for biogas, which is then used to generate electricity for the plant, reducing the need to purchase electricity.
• Breweries: Spent grains and wastewater can be used to produce biogas, which can then power the brewery.
• Agricultural Operations: Crop residues can be used to produce biogas, which can then be used for various farm operations, reducing the need for external energy sources.
• Textile Mills: Textile manufacturing processes are energy-intensive. By using biogas produced from waste materials like off-cuts and defective items, mills can significantly cut down on energy costs.
• Poultry Farms : Waste from poultry farms can be a significant environmental concern. By converting this waste into biogas, farms not only dispose of their waste more sustainably but also generate energy that can be used in various farm operations.
• Paper Mills: The paper production process generates a large amount of organic waste. This waste can be used to produce biogas, which can then power the mill, reducing the need for external electricity.
• Food Processing Plants: Waste from food processing, such as peels, off-cuts, and wastewater, can be used to produce biogas. This biogas can then be used to power the plant's operations, reducing utility costs.
• Hospitals: Medical facilities generate a significant amount of organic waste. While some of this waste must be disposed of through specialized means due to contamination risks, some can be used to produce biogas, which can then be used for heating or electricity.
• Educational Institutions: Schools and universities often have large cafeterias that generate food waste. This waste can be converted into biogas, which can then be used for cooking or heating, reducing the institution's energy costs.
• Correctional Facilities: Prisons often have large kitchens and therefore generate a significant amount of food waste. This waste can be used to produce biogas, which can then be used for cooking or heating water, reducing the facility's energy costs.
• Fisheries: Waste from fish processing can be used to produce biogas. This biogas can then be used to power the facility, reducing the need for external energy sources.
• Automotive Manufacturing: Certain waste products from the manufacturing process can be converted into biogas, which can then be used in the plant, reducing the need for external energy.
• Hotels and Resorts: These establishments generate a significant amount of food and organic waste. By converting this waste into biogas, they can power their own kitchens or heating systems, reducing their energy bills.

What are the Operating Costs of a Biogas Plant?

• Source & Location: Local feedstocks can offer savings on transport but might be constrained by seasonal availability. Conversely, imported feedstocks, while more consistent, can escalate costs due to transportation.
• Seasonal Dynamics: Certain feedstocks, especially agricultural and forestry residues, are season-bound. This necessitates either sourcing alternatives or investing in storage during off-seasons.
• Quality Assurance: Maintaining a consistent feedstock quality is paramount for efficient biogas production. This might involve lab testing, incurring additional costs but ensuring optimal output.
• Regular vs. Unexpected Maintenance : While routine check-ups are predictable, unforeseen repairs can arise, emphasizing the need for preparedness.
• Spare Parts : Stocking essential components can streamline repair processes, though it necessitates an initial outlay.
• Service Agreements : Engaging in service contracts with equipment providers can offer regular upkeep, potentially optimizing long-term operational costs.
• Training and Skill Development : Continual training is essential, given the evolving nature of biogas technologies.
• Shift Management : Continuous operations might necessitate multiple work shifts, influencing labor dynamics.
• Employee Benefits : Offering benefits like health coverage and retirement plans can be an investment in staff loyalty and retention.
• Specialized Skills : Technicians with specific certifications or expertise might have distinct compensation expectations.
• Operational Demands : Peak operational periods or unforeseen situations might require additional workforce hours.
• Native Consumption of Electricity: Some of the native consumption of electricity typically can be provided by the Biogas Plant itself.
• Seasonal Variations : Expect variations in utility costs due to heating needs in colder months and cooling in warmer ones.
• Waste Management : Ensuring environmentally friendly disposal of non-organic waste and wastewater treatment can influence utility expenses.
• Connectivity : A dependable, high-speed internet connection is vital for real-time monitoring and seamless communication among the team.
• Vehicle Upkeep : Depending on the type of feedstock, specialized vehicles might be required, and their maintenance can influence costs.
• Fuel Price Dynamics : The ever-changing nature of fuel prices can have an impact on transportation expenses.
• Logistics Management : Leveraging sophisticated logistics software can streamline operations, potentially leading to cost savings.
• Backup Systems: Uninterruptible power supplies (UPS) and backup generators consume electricity but are essential for continuous operation.
• Security Systems: Maintaining a secure facility with surveillance cameras and alarms adds to electricity consumption but is crucial for safety and asset protection.
• Consulting and Advisory Fees : Whether for compliance, operational optimization, or financial planning, professional advice is often needed and comes at a cost.
• Software Licenses : Plant management software, accounting packages, and other digital tools require ongoing license fees.
• Office Supplies and Safety Gear : Everything from printer ink to personal protective equipment for staff falls under this category.

How Profitable is Biogas?

• Return on Investment (ROI) : The annual profit compared to the total cost of investment expressed as a percentage.
• Payback Period: The time it will take to earn back your initial investment. The shorter the period, the less risky a Biogas Plant project is.
• Internal Rate of Return (IRR) : Investors and capital providers might require a minimum return of 8% to 10% for such a project. To understand more about the Weighted Average Cost of Capital (WACC) analysis, you can refer to " How to Calculate the Weighted Average Cost of Capital (WACC) ". This provides valuable insights into the calculation of WACC, a crucial concept in financial valuation and decision-making.

Why invest in Biogas?

• Consistent Energy Production: Unlike solar, which relies on sunlight, or wind energy, which is weather-dependent, biogas offers a more stable and consistent energy output. As long as there's a steady supply of feedstock, biogas plants can produce energy around the clock.
• Baseload Electricity Generation: For electricity distribution companies, biogas is a game-changer. It provides a reliable baseload of electricity generation, ensuring that there's always a minimum level of energy available to the grid. This makes it easier to manage supply and demand, enhancing grid stability.
• Stable Cash Flows for Investors: Biogas is not just good for the planet; it's also good for your portfolio. The stable energy output translates into predictable cash flows, making it an attractive investment for long-term-oriented investors, including insurance companies. It's an ideal asset for those looking to adopt a 'buy and hold' investment strategy.

Risks to Consider in your Biogas Plant Business Plan

• Feedstock Availability and Pricing: The availability and cost of feedstock might be subject to seasonal variations and market demand. Furthermore, you also rely upon that, e.g., the source of the feedstock remains in business and does not go bankrupt itself. In case the feedstock would disappear, so would also go the Biogas. The way to mitigate this risk is to only build a Biogas Plant when you are already operating a Horse or Chicken Farm or if you have the possibility to identify alternative sources of feedstock.
• Energy Pricing Fluctuations: T he revenue from biogas is tied to energy prices, which could be subject to volatility. The way to manage this is to enter into a Power Purchase Agreement (PPA) with an electricity distribution company that will purchase the feedstock. The other alternative is to consume the produced energy in-house, therefore removing the pricing risk.
• Regulatory Risks: Government policies can change with each election cycle. A change in administration could lead to the removal of subsidies or the introduction of new regulations that could impact your bottom line. To mitigate this, diversify your revenue streams and stay abreast of policy discussions.
• Environmental Compliance Costs : Regulatory compliance can add unforeseen costs. For example, environmental impact assessments or new waste management guidelines could necessitate additional investment whenever a Biogas Plant relies on organic waste as a feedstock.
• Technological Risks: Biogas technology is rapidly evolving. Investing heavily in a technology that becomes obsolete can be financially crippling. Keep some budget aside for technological upgrades.
• Interest Costs: Often, Biogas Plants are financed through debt financing secured by banks. The main risk here is variable interest rates. In case of an inflationary environment, interest rates tend to rise and - depending on financial leverage – can severely affect profits. The way to mitigate this risk is whenever possible to choose a fixed-rate interest rate.

Biogas Plant Design Calculation Excel: Your Financial Template Blueprint for the Biogas Industry

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The Complete Biogas Handbook

The bible of biogas: giving the world gas since 1976, basics 02: biogas as a business, a new sector: making a business out of biogas.

(Clicking on the footnote numbers in the text will take you to the footnote; clicking on the footnote numbers will take you to the first place in the text where that reference is used. The ‘back’ or ‘previous’ button on your browser will likewise be of use. Happy hunting.

(Please download a copy of the current version ( here ) of the installer business model spreadsheet.)

There are many ways in which [The_Cube] can be improved (and will be), but it is also true that, in it’s present state and for the first time, there is a small-scale digester available which is kittable, shippable, insulated, heatable, agitated, low-cost, and available to be manufactured by anyone with the requisite skills, anywhere.

Of course only some of those characteristics are crucial to the matter at hand, which is making a business out of small-scale biogas . Can it be done? Well frankly, I don’t know. No one knows, not for a fact. One person can design a small digester, but it takes many pairs of hands, many points of view approximating toward unity, and the time investment of at least a small group to be able to pioneer a new business sector. I need your help. The planet needs our help.…. Can we make a new business here, using this new tool? Let’s find out.

After all, previous to [The_Cube], it’s difficult to see how anyone would have been able to do the experiment. Where was the core and crucial item of equipment (an affordable, heatable small digester) necessary to even make the attempt?

Right, then. No one knows. Nevertheless, at present, what seems possible? We think that one promising area is to exploit the opportunities which appear to surround food waste.

The Food Waste Problem

The key problem which food waste poses is its strong negative impact on climate change. (Please look here for more complete information.) The primary goal is to be able to have a positive impact on this problem. And of course only businesses that survive, succeed and grow will be able to continue to have such an impact, so to obtain the greater goal, we have to be good capitalists as well. (These things are no more in opposition to one another than being idealistic and pragmatic are incompatible. The best of us are both, fervently both.)

The Food Waste Opportunity

The key point is that hidden in food waste, there is a great deal of energy, and the majority of that (more than twice as much energy as is produced as heat from a well-aerated compost pile ) can be released as biogas, an excellent burnable fuel which can be used for cooking, heating & lighting. Human production of biogas requires a digester, which (as you know) is a sealed container where organic material can be kept warm, wet, and away from the air.

How much food waste is there?

In the aggregate, there is a great deal of food waste being generated. Worldwide, it appears that humanity wastes about a third of the food it produces, and the situation in the US, according to most reports, (e.g. reference  ) is similar. The USDA, for example, says that in 2010 the nation threw away 133 billion pounds of its food. According to our calculations, if piled up on an area 100 feet on a side, that amount of food waste would reach 40 miles high.

But of course there is no such tower of garbage— it’s the virtual artifact of an estimate— and when we stare at the forest of a regional or national problem from 10,000 feet, the unnoticed assumption we might make is that we need a forest-sized solution; yet forests, as some have pointed out, are often made of trees.

Food waste producers: national picture

US Census data: Number of emp­loy­ees in “full-service” restaurants

For a look at some of the ‘trees’ in this ‘forest’, take restaurants as an example. The National Restaurant Association says that 7 in 10 of all restaurants in the nation are single-unit operations. Further, the US Census reports that almost 30% of all full-service restaurants in the US have fewer than 5 employees, and nearly half (44%) have fewer than 10. Taken together, these stats imply that the majority of restaurants are both small and single-unit, which would tend to limit their options when dealing with food waste. (Whereas the owner of a large enough group of restaurants could reverse their supply chain to haul food waste to a central point and apply an aggregated solution, the small independents are unlikely to have the resources to do other than pay for someone else to deal with their garbage. Even individual franchisees of large chains such as McDonald’s may be in the same position.)

And with regard to us, and biogas, and business, the fact that so many of these food waste producers are small , means that we, as small businesses ourselves, are likely to have a good fit. We will show evidence below that many such small producers are generating amounts of food waste that— ain’t life great?— can be digested by our primary tool, [The_Cube].

On-site digestion? Never before…

As mentioned, small-scale, low-cost, on-site digestion is simply not presently possible for these small food waste producers, because suitable digester designs have never previously existed. There are a few low-cost digesters available, but (speaking as someone active in the worldwide biogas community), all known examples are too small, poorly insulated, and essentially unheated. (These might work well enough in a tropical setting, but in Europe, Australia, most of the continent of South America, most of Asia and certainly here in the US, when using such a digester at ambient temperatures digestion would halt during the winter, even in our southern-most states.)

There are, likewise, a few proprietary small digesters suited to temperate climates, but besides being available only from (and for) the company that produces them, they are so expensive that they are likely to remain poorly utilized. As well, the business strategy of the companies producing these digesters appears to have them installing and servicing customers nationally, apparently implying enormous expense to build out infrastructure in city after city. These conditions, taken together, would appear to raise the cost of such solutions to the point of market marginalization.

By contrast, our digesters are the first kittable, shippable, insulated, heatable, agitated, small-scale anaerobic digesters available, worldwide. As well, they can be produced anywhere by anyone who has the proper tools and modest skills.

Overview of business

Thus as indicated, our project is aimed at pioneering the business use of an evolving set of designs for low-cost, small-scale, temperate-climate biogas digesters which incorporate insulation and heating (because the rate of biogas digestion is temperature-dependent), and agitation (to help insure that the entire volume of the digester is in active digestion). These digesters can be locally manufactured or (eventually) purchased in kit form, and will be distributed by and serviced through a national network of independent local installers— people like you?— who will for the most part work with local small businesses that generate moderate amounts of food waste. Thus in this endeavor, there are those, primarily businesses like restaurants, who generate food waste: the producers . And there will be those, like you and I, who supply digesters and services: the installers .

So installers will deliver and set up the digesters, train the producer’s staff, and regularly service the digesters. (For the most part this ‘regular service’ would entail switching containers (IBCs? — I ndustrial B ulk C ontainers) full of effluent— the stuff the comes out of the digester— with empty containers (or alternatively, draining collected effluent, by electric pump), on a regular schedule determined by the amount of food waste produced on-site, but generally about once every two to three weeks.)

Thus installers would need to have at least one reliable pick-up truck, or a heavy duty “tray-back” pick-up, or a larger commercial truck. Whatever the case, the truck should be fitted with a crane capable of lifting two tons (about the weight of a nearly full IBC), and probably with a pump, capable of dealing with food waste effluent. (Such cranes can be purchased new for $2,500 or sometimes less, such as this one . “Macerating” pumps are widely available at reasonable prices. We expect to do more research in this area.)

For installers, having attended at least one workshop will allow them to access regularly updated business plan templates, success stories, producer questionnaires, and statistical information. (We do not have all of these at present mind you: we will be intensively developing these resources over the next two years.) As well the installers will be able to participate in a discussion forum powered by Drupal and to utilize a streamlined set of metrics and instruments for characterizing various aspects of the installer business, which we will develop and share with our installers. As mentioned in the page regarding [The_Cube] , “ What we do not measure, we cannot improve .” (In this context, what is true is that we must use the best tools that we can which will allow us to gain insight into and control over our businesses.)

Using these tools, we expect and hope that our installers will help us better quantify the ubiquity, size distribution and other characteristics of producers in their locality; not to generate new national estimates for some other and more generic use, but to provide insight into conditions on the ground and as experienced, and offer a growing dataset from which we can extract the correlates of successful installations and other information (eventually collected via smart phone). Individual success may flow from personal intuition, but widely shared success can only come from the kind of clarity that insightful data provides.

Stories are important too. Some stories collected from the installers will be anonymized and made publicly available as part of our shared effort to improve the catalytic impact.

Within that context of measurement, evaluation and the goal of mutually shared success, the diverse approaches the installers will no doubt apply will in effect be an evolutionary experiment toward improving the breed, and promise to illustrate, ultimately, how to achieve success in widely divergent circumstances.

Changing the percieved value of food waste

Meanwhile food waste is known to produce 8 to 12 times the biogas that farm manure does. The effluent does not suffer a loss of nutrients, and can be directly used in agriculture, (including urban agriculture) or further composted. Thus AD can provide several benefits which are superior to direct composting. The key to the possibility of establishing a business is the fact that on-site digestion results in valuable energy; no other approach does.

So food waste is really too valuable to throw away. But in a sense, that's the problem, isn't it? People throw away food waste because they don't realize how valuable it is. If they understood the value of food waste, then they would use it, not throw it away.

So: Can a small group of people with modest means change that perception, nationally and perhaps worldwide? Can we become a catalyst for change?

A parallel example of such a catalytic impact is illustrated by the biodiesel revolution, where a diverse group of early adopters was arguably the pivot of a process that changed the perceived value of used cooking oil, yellow grease. You can learn more here . The key take-home is that a similar change in value has taken place before, and it seems likely to happen again.

“The best way to predict the future is to create it”

Thus we seem to have good reasons to believe that by providing a low-cost, practical “popular” technological implementation ([The_Cube] and its progeny) and by helping produce a similar small cadre of people interested in applying this solution locally, this project can have a strong and positive impact on the perceived value (and therefore ultimately the wider utilization) of food waste. We aim to help create that reality where, in the future, it will be hard to find any food waste anywhere which is being sent to the landfill.

Can installers make a living?

The business of installers can be fairly simple, as described above, and would obviously require gaining an income more than sufficient to pay for ordinary business expenses such as rent, and including vehicles, equipment, tools and time, as well as repayment of any start-up expenses.

Along with good business practices and wise decisions, there are several key numbers which will control profitability this new endeavor:

• How much food waste can we process with [The_Cube]?
• The amount of food waste produced
• The hours-per-month required to service a producer, on average
• The local replacement value of the energy produced in the biogas as methane
• The local cost of tipping fees (garbage collection costs)
• The installer’s monthly expenses

Several of these key numbers, in our view, and not well-enough established to allow us to state without question that this business proposal will be profitable in enough situations to make us comfortable in pushing others to try. Even where we have better information on some of the numbers, bringing them into better focus, other numbers will vary dramatically from locality to locality, meaning that the margin available for success likely varies locally as well.

I would say that there is ‘hobby’ biogas and there is practical biogas. Hobbies are good, and they do not need any better economic rationale than: Hey: it feels good. How many people ask that a casual round of golf on the weekend should turn a profit?

On the other hand, if one wants to demonstrate that something is practical, or to make a business of it (as for example as in owning a store that caters to golfers by selling clubs and balls and golf widgets— whatever they are), then the numbers are crucial . How can that person wanting a golf store go to the bank and try to get a loan unless they have some evidence — some numbers— which indicate they can make money and pay back the loan?

So, to me, this is the first critical difference between biogas as a hobby and biogas undertaken as a business: those interested in succeeding in the business are deeply interested in getting the numbers .

That, therefore, is the first order of business: To get better numbers . You can help, and we will be talking more about that in the workshop.

Meanwhile, to give you a better idea of how that list of numbers we just mentioned above might relate to profitability, we are providing an early draft of what may eventually become a model of the installer business. It's not yet, but still, what we have may be useful to you.

Therefore please download a copy of the current version of our installer businsess model spreadsheet ( here ). Once again, a note of caution, however: this is a brand new spreadsheet, and it is our experience that with somewhat complex spreadsheets, when they are new they are likewise liable to have hidden errors. We will do our best to find and repair these errors, so keep checking back to see if there is a newer version of the spreadsheet.

In sum, then, as we have said from the beginning, this is an effort to pioneer this industry. We have not yet done it: no one has. But surely the time has come to use this new tool and for a few of us to begin to explore the situation locally. If you are interested in trying, please let us know, or better yet, come to the workshop and join in the fun!

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Biogas Market Size, Share & Industry Analysis, By Feedstock (Organic Residue & Wastes {Biowaste, Municipal & Sewage, Agricultural Waste, and Others}, and Energy Crops), By Application (Electricity Generation, Heating, Combined Heat and Power, and Others), and Regional Forecast, 2024-2032

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KEY MARKET INSIGHTS

The global biogas market size was USD 48.74 billion in 2023 and is expected to grow from USD 51.03 billion in 2024 to USD 78.32 billion by 2032 at a CAGR of 5.50% during the forecast period. The biogas market in the U.S. is projected to grow significantly, reaching an estimated value of USD 5.34 billion by 2032, driven by increasing focus on sustainable transportation fuel backed up by renewable energy policies and incentives by federal & state governments.

This gas is a mixture of gases produced from raw materials such as agricultural waste, manure, municipal waste, plant material, sewage, green waste, or food waste. It primarily contains carbon dioxide and methane and little amount of water vapors and supplied compounds. This gas is burnt in the presence of oxygen, which releases energy. This energy is used for different purposes, such as generating electricity, cooking food, transportation, and heating. Rising concerns about environmental safety and increased demand for clean energy are the factors driving the growth of the market. 

Several restrictions on travel, work, and industry due to the COVID-19 pandemic led to the discard of uncountable barrels of oil and trillions of cubic meters of gas from the global energy system in 2020. European countries, such as Spain, the U.K., Italy, Germany, and France; and China in Asia Pacific are the major shareholders of the global market. Conversely, these countries have undergone various regional and national level shutdowns of residential, commercial, and industrial operations to contain the spread of this viral infection. Various bioenergy projects across the globe are facing major problems due to this pandemic. Components, raw materials, and manpower shortages have greatly impacted project development, resulting in delays. In March 2020, Strabag, one of the key players in this market, halted its operations due to the COVID-19 pandemic.

The U.S. Energy Information Administration (EIA) estimates that biomass would be used to generate 27.3 billion kilowatt-hours (kWh) of electricity in 2020, down from 28.8 billion kWh in 2019.

Biogas Market Trends

Several Countries are Accepting the Paris Climate Change Agreement 

Many countries are coming forward and showing conviction in the Paris Climate Change Agreement. The agreement insists the countries increase their renewable energy consumption. Biogas is one of the major low-cost renewable energy sources that help the countries to minimize GHG emissions and implement the Kyoto Protocol agreements. Hence numerous countries have made a considerable investment in this form of energy.

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Biogas Market Growth Factors

Rising Environmental Concerns to Positively Impact Market Growth

The rising carbon and greenhouse gasses have been a concern for the global countries. To mitigate this, governments of different countries have been taking numerous steps, such as increasing renewable energy in the energy mix, decarbonizing the automotive industry, and producing biogas. For instance, in March 2021, the Canadian government announced funding of around USD 116,800 to the Canadian Biogas Association (CBA) to accelerate sustainable agricultural development. Biogas production helps in reducing greenhouse gas emissions by capturing methane that would otherwise be released into the atmosphere from organic waste. Additionally, the production of biogas encourages the use of agricultural residues and livestock manure as feedstock, providing farmers with an additional revenue stream while helping manage waste from farming operations.

High Demand for Upgraded Biogas Will Augment Market Growth

The shortage of conventional fossil fuel coupled with environmental degradation is one of the major global problems. The use of renewable energy is expected to help overcome these problems. This gas plays a crucial role in forming a sustainable society and reducing dependency on oil. This gas includes the high content of methane, which is further upgraded into biomethane. Biomethane has the same properties as natural gas and can be used as a renewable fuel for natural gas vehicles .

According to the International Renewable Energy Agency (IRENA), this gas as a vehicle fuel can reduce greenhouse gas emissions by about 60% to 80% compared to fossil-based fuels. Presently, in Germany, around 150 filling stations offer 100% biomethane. Thus, increasing the production of automobiles is projected to boost the demand for biomethane.

RESTRAINING FACTORS

Huge Capital Investment for Biogas Plants Setup May Hinder Market Growth

Biogas plants require high capital investment. The plant requires the land in acres. Also, the cost of equipment, feedstock materials, engineering, and labor is also high. The process of feedstock buying, storing, and sorting are challenging and costly. Moreover, the operation of plants and the sale & distribution of this gas are also costly. Hence, high capital investment for plants setup and operation may hinder market growth.

Biogas Market Segmentation Analysis

By feedstock analysis.

Organic Residue & Wastes Is Primarily Used For Production

The market is distributed into organic residue & wastes and energy crops on the basis of feedstock. Organic residue & wastes are further trifurcated into biowaste, municipal & sewage, agricultural waste, and others. The organic residue & wastes segment dominated the global market. Agricultural waste includes organic waste generated in any farming-related activities. As per Global Bioenergy Statistics, 3–14% of the total energy supply globally can be fulfilled by the energy generated from agricultural waste.

According to the World Bioenergy Association (WBA), globally, more than 1.6 billion tonnes of food is lost every year. Suppose all accessible food waste is collected and recycled by the anaerobic digestion process. In that case, it has the potential to generate around 880 to 1100 TWh of energy, which can be used as electricity and heat.

Energy crops are projected to show significant growth during the forecast period. In the U.S., numerous states such as Minnesota, North Dakota, Iowa, Illinois, Nebraska, and Arkansas have high availability of crop residues from corn, wheat, and soybean, which can all be digested for the production of this gas.

By Application Analysis

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Electricity Generation Application Dominated the Market Share

The market can be segmented into electricity generation, heating, combined heat and power (CHP) , and others on the basis of application. Electricity demand is growing continuously owing to enhanced living standards and electrification of transportation. The heating segment is projected to gain more traction during the forecast period. In the updated Renewable Energy Directive (RED), the member states need to achieve a target to increase renewable energy in heating and cooling by 1.3% points/year, which would open up doors for heating applications.

The other segment includes the transportation segment. Implementation of environmental protection regulations globally is enhancing the demand for alternate fuels. In Germany, around 900 natural gas filling stations are available for more than 100,000 natural gas vehicles. Of those, 150 stations offer 100% biomethane, and over 300 filling stations offer mixtures from biomethane and natural gas.

REGIONAL INSIGHTS

Europe Biogas Market Size, 2023 (USD Billion)

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The global market has been studied geographically across five major regions, such as North America, Europe, Asia Pacific, the Middle East & Africa, and South America. The major biogas market share was held by Europe in 2023. Europe currently produces around 2 billion cubic meters (bcm) of biogas per year. Recently in Renewable Energy Directive II (RED II), the overall EU target for Renewable Energy Sources (RES) consumption by 2030 has been raised to 32%. Germany, U.K., Spain, Italy, and Sweden are the key countries for bio-based energy. Germany is the major producer across the globe, with more than 10,000 plants operating in the country.

The Asia Pacific market is expected to gain more traction during the forecast period. Developing economies such as India and China are implementing strong regulations to lower their carbon footprint, which is a crucial factor driving the biogas market growth. According to the Indian ministry, 1.45 lakh metric tons of waste were generated per day in India. Only 53 percent of waste was processed under the Swachh Bharat Mission (SBM), a flagship program of the Prime Minister. The Centre aims to attain 100% scientific management of solid waste, and make the country Open-Defecation Free.

North America has been a significant region for the global market. The U.S. has more than 2,200 plants in all 50 states, i.e., 253 anaerobic digesters on farms, 1,269 water resource recovery facilities, 68 stand-alone systems that digest food waste, and 652 landfill gas projects.

List of Key Companies in Biogas Market

Key Players to focus on Increasing Production Capacities

The global biogas market is extremely fragmented due to the presence of abundant regional and international players. Numerous players across the globe are progressively contributing in organic & inorganic developments to strengthen their market position. Most companies are focusing on enhancing their production capabilities by introducing new or expanding the existing plants. For instance, in May 2020, Weltec Biopower built a plant in Veria, Greece. The main investor of the project is the largest abattoirs for cows and pigs in Greece. In February 2020, Brightmark Energy company announced to expand its Western New York dairy biogas project. The ‘Yellowjacket’ project would extract methane from 265,000 gallons of dairy manure per day and convert it into renewable natural gas and other valuable by-products.

LIST OF KEY COMPANIES PROFILED :

• Future Biogas Limited (U.K.)
• Air Liquide (France)
• PlanET Biogas Global GmbH (Germany)
• WELTEC BIOPOWER GmbH (Germany)
• Scandinavian Biogas Fuels International AB (Sweden)
• EnviTec Biogas AG (Germany)
• Ameresco (U.S.)
• Quantum Green (India)
• AB HOLDING SPA (Italy)
• RENERGON International AG (Switzerland)
• StormFisher (Canada)

KEY INDUSTRY DEVELOPMENTS :

• April 2020 – Ductor, a Finnish Swiss biotech company, is building three combined biofertilizer -bio-gas facilities in northern Poland. The new facilities will be built in Poland's Zachodniopomorskie region. Two of the new plants have installed capacity of 0.5MW, and the third will be 1MW.
• June 2020 – Gasum, a Nordic energy company, announced that they would open a liquefied natural gas (LNG) and LBG filling station near Arlanda Airport in Stockholm. The station is Gasum’s first in the Stockholm area.
• October 2019 – Mazoon Dairy Company (MDC) opened a biogas plant in Oman. The plant is part of MDC’s strategy to use waste to energy to enhance waste management efficiency. This is the first time a dairy company in the region has adopted clean technology on such a scale.

REPORT COVERAGE

The market research reports provide a detailed analysis of the global biogas industry and focus on key aspects such as leading companies and leading feedstock, and the application of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

An Infographic Representation of Biogas Market

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REPORT SCOPE & SEGMENTATION

Frequently Asked Questions

As per the Fortune Business Insights study, the global market was USD 48.74 billion in 2023.

The global market is projected to grow at a CAGR of 5.50% over the forecast period.

The market size of Europe stood at USD 23.84 billion in 2023.

Based on the application, the electricity generation segment is holding the dominant share in the market.

The global market size is anticipated to reach USD 78.32 billion by 2032.

Based on feedstock, the organic residue & wastes segment is holding the dominating share in the market.

Rising concerns about environmental safety and increased demand for clean energy are the factors driving the growth of the market.

The top players in the market are EnviTec Biogas AG, Air Liquide, Ameresco, and StormFisher, among others.

• STUDY PERIOD: 2019-2032
• BASE YEAR: 2023
• HISTORICAL DATA: 2019-2022
• NO OF PAGES: 220

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The global biogas market size was $48.74 billion in 2023 & is expected to grow from $51.03 billion in 2024 to $78.32 billion by 2032 at a CAGR of 5.50%

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