Biogas Market Opportunities To Override Concerns of Controversy

May 31, 2010. Biogas is increasingly viewed as a viable alternative to both traditional as well as other renewable forms of existing transportation fuel, from gasoline and diesel to ethanol and biodiesel. Where do the greatest market opportunities lie? Which technologies will be utilized in different regions? Which new players are entering the biogas market?

Biogas industry developments have important implications for chemical producers, equipment manufacturers, renewable energy suppliers, oil and gas industry companies and agriculture entrepreneurs.

The chemical compounds of purified biogas have the same make-up as methane, thus allowing its use in existing applications for natural gas without the need for any modification, for example. Biogas is also touted as an alternative for coal, oil, biomass, wind, solar and natural gas sources in heat and electricity generation. Wastewater plant and landfill installations in developed markets are exploring ways to extract and use biogas for their operations, while industry players in developing markets are exploring even more advanced methods of waste utilization.

opportunities_biogas_value_chain

The current market mainly consists of rather low-tech players who are likely to struggle when complexity and costs increase, as quality becomes more important. Opportunities therefore abound for new innovations and international businesses to enter the market.

New market entrants can position themselves along the biogas value chain to deliver new or improve on existing technologies and services in a range of areas:

  • Improvement of solid waste and sewage treatment processes
  • Production of heat and energy out of biogas
  • Developing the anaerobic digestion process
  • Extraction of chemicals such as CO2
  • Upgrade of biogas to suit existing natural gas applications
  • Condensation of upgraded biogas into liquid biogas

All these developments have not been without some resistance and controversy, as green activists warn of the risk of diverting focus away from reducing waste sources in the first place. Other concerns include the potential utilization of edible plants and farmland as energy resources and the domination of big players over what could be a local, labor-intensive and sustainable energy resource.

In spite of these concerns, several factors will continue to drive biogas industry developments:

Price volatility and supply issues of fuels and an increased interest in alternative energy sources

  • Government support for renewable energy in most countries
  • Upgrade efforts in sewage and waste management in western countries due to changes in fees, legislation and incentives, as completely new systems are built in emerging markets
  • Climate change and the drive to reduce greenhouse gases

As a result, more companies are entering the biogas market. These include chemical companies such as Rhodia, equipment manufacturers such as General Electric, distribution companies such as Gaz de France and gas companies like GASUM.

By entering such a nascent market however, these businesses face the challenge of deciding on, amongst other considerations:

  • Operating models
  • Market focus
  • Technologies
  • Long term plans for their biogas business aspirations

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