(Erstwhile PGA Labs) Report January 2023 Foreword Biomass is an organic material that biomass market is attracting investments comes from living organisms, such as from global green energy companies. There plants and animals. The most common is a growing demand for the supply of clean biomass materials used for energy are and reliable power to businesses in India plants, wood, and waste which are also and biomass as a source of energy is called biomass feedstocks. Biomass can expected to play a crucial role in meeting be burned to create heat, converted the power demand. India currently has an into electricity or processed into installed capacity of 10.2 GW for biomass biofuel. With the help of the production and the biomass market in India Abhishek Maiti is expected to reach INR 32,000 crore by Director, in the India biomass market are FY31. Industrial Goods & Services,1Lattice investing to tap into export This report aims to provide various opportunities. Moreover, surplus industry stakeholders including business biomass availability, especially from the leaders an overall perspective on the agriculture sector, is another key driver market. that is fuelling the market growth. The situation is evolving rapidly, and some In this report, we have intended to of the expected scenarios might have slight provide insights into the Biomass sector of India. The launch of new perspectives as of end of 2022. schemes in the support of biomass cogeneration projects is playing a We, at 1Lattice, look forward to continuing crucial role in capacity additions of the discussion with our friends across small biogas plants located in remote sectors and exchanging notes. and rural parts of India. The India Executive summary • The process of biomass to energy conversion starts with procurement of feedstock which is further converted to pallets & briquettes for optimum energy extraction. Major forms of biomass feedstock include vegetable oil, garbage, wood, sewage, animal manure and agricultural residue. The feedstock is further processed either through direct combustion or through thermochemical, chemical or biological conversion depending upon the form of output required (heat, solid, fuels and biogas). The output generated is transported to meet the requirements of end use industries through ships, trucks & pipelines. Leading companies such as UltraTech Cement, JSW, HUL, NTPC etc. are utilizing energy • Many industrial segments exist along the biomass-to-energy value chain starting from biomass feedstock producers to power, heat & fuel producers. The biomass-to-power, heat & fuel conversion industry is largely dominated by organized players such as AshokaCorp, NuChem, Universal Biofuels, Emami Agrotech, Arya Hi-Tech Energies, etc. • The current availability of biomass in India is estimated at about 750 MMT per annum and surplus biomass availability at about 230 MMT per annum. The installed capacity for biomass production in India has grown at a CAGR of ~4% reaching ~10 GW by FY22. Government initiatives such as biomass power & cogeneration program along with revised policy for biomass utilization have promoted technologies for optimum use of country’s biomass resources. Other factors such as attractive investments from foreign green companies and technological advancements will drive the biomass market in India which is expected to reach INR 32,000 crore by FY31. • Biofuels are sustainable and have the potential to address the issues of climate change and energy security. Various organizations have been successful in developing innovative technology to produce hydrogen and biofuel from newer form of biomass such as algae and sludge waste. • Investments and collaborations in the biomass energy ecosystem will present an opportunity for organizations to make climate-smart decisions and move the world closer to goal of net-zero carbon emissions. Through these investments, players in the biomass energy ecosystem will be able to provide more environment friendly choices to consumers which will help in achieving the goal of sustainable society. • The demand for global biofuel is expected to be ~5,285 million liters / year in FY21-22. Indonesia has the highest demand for biofuel followed by India. In India, ethanol is the most widely used form of biofuel when compared to biodiesel and biojet fuel. Increasing global investments in biofuel space along with high potential for developing countries with warmer climates and lower latitudes presents growing opportunity for the sector. High moisture content in biomass material, low density of biomass material and supply chain imbalances are few challenges. Agenda Overview of biomass Biomass in India: Overview Biomass is a renewable organic material that comes directly from plants & animals & can be converted into biofuel in liquid or gaseous form Biofuel Biomass • Biomass refers to organic material that at some point in its • Fuel that is produced over a short time span from biomass & typically found in a solid state liquid form • First-generation biofuel: Sourced from food crops. Three most • Agriculture crop residue: Corn, soybean, sugarcane, switch grass common types of food crop-based biofuels - sugarcane, soy, & corn. & woody plants, etc. • Second-generation biofuel: Produced from biomass not sources • Forestry residue from food crops & not grown on arable land • Algae • Wood processing residue: Firewood, wood chips, wood pellets • First generation: Processing of crops using fermentation at a • Biogenic material in municipal & wet waste: Paper, cotton & commercial stage & converting sugars, starches & oil found in wool products them into biofuel • Second generation: Nonfood biomass* converted into bioethanol • In the process of photosynthesis, plants convert radiant energy through pretreatment, enzymatic hydrolysis, or fermentation from sun into chemical energy in the form of glucose or sugar processes • Transportation • Industrial production • Heating • Transportation • Aviation • Heating • Lubrication • Electricity generation • Oil clean-up operations • Wood & agricultural products • Ethanol: Made from corn or sugarcane • Bio-diesel: sourced from vegetable oils & liquid animal fats • Solid waste • Green-diesel: Derived from algae & other plant sources • • Biogas: Methane derived from animal manure and other digested • Alcohol fuels organic material • Others such as agricultural waste products such as fruit pits & corn cobs Note(s): *nongrain crops, straw, bagasse, rice husk, sawdust, animal fat, & other wastes © 1Lattice Source(s): National Academic of Science, 1Lattice analysis | 05 Biomass in India: Applications of biomass Biomass has multiple use cases including fuel, cosmetics, perfumes, detergents & plastics • Gasoline mixed with • Bio based feedstocks • Oil collected from • Enzymes • Bio based products bioethanol, a bio based used in the production algae used by (manufactured using used to manufacture product to reduce of personal care nutritional supplement bio based products) green alternative to carbon dioxide products such as skin brands for extracting increase the rate of plastics (biobased emissions from vehicles cream, shampoo & omega-3 fatty acids chemical reaction & plastic) • LanzaTech recycling mascara by fermenting ensures high degree of • Such plastics gas from industrial plant sugars directly from algae stain removal, (manufactured from waste & converting it • Plant essential oils • Biomass used as a whiteness, fabric & color plant-based material) into a revolutionary transformed into care provide same variety & form of jet fuel high-value ingredients • Lignin gives plants their • Kernel oil used as reliability as traditional for sunscreens, strong structural surfactants in plastics perfumes and other support & can be detergents to ensure an • Coca-Cola using personal care converted into adequate cleaning technology to offer products renewable chemicals functionality 100% renewable & recyclable bottles © 1Lattice Source(s): Media reports, 1Lattice analysis | 06 Biomass in India: Value chain storage, conversion, transportation & utilization Direct Storage at Biogas Biomass processing into pellets Vegetable site Tanker ships & briquettes helps reduce oil Transport Industrial Agricultural Thermochemical storage & transportation cost residue Garbage Trucks Biological storage Animal facility manure Pre-processing Wood Chemical Biofuel Power Chemicals Pipelines Sewage Direct transportation to the plant from production site • Biomass is made of material like plants • 3 common ways of storing biomass: • Direct combustion to produce heat; biomass burnt directly • Transportation of • Industrial: Industries like wood products & & animals known as feedstock - Feedstock hauled directly to the for heating water, for industrial process heat & for generating bio energy in the paper industries use biomass to process heat • Feedstock include by-products from plant with no storage at production electricity in steam turbines. form of biogas & & to generate electricity for own use industries like agriculture, naturally site biofuel via tanker • Thermochemical conversion to produce solid, gaseous, & • Transportation: Used as fuel in light-duty occurring forest residues, household - Feedstock stored at the production ships, trucks & liquid fuels; includes pyrolysis & gasification where feedstock vehicles, buses, trucks, trains, and potentially site & transported to the plant when pipelines is heated in closed, pressurized vessels at high temperatures shipping and aircraft • Pre-processing: In some cases, needed • Chemical conversion to produce liquid fuels; chemical • Power: Can be used in gas turbines to assortment of feedstock is done based - Feedstock stored at collective process known as transesterification for converting increase power system on size & shape storage facility & transported to the vegetable oils & animal fats to produce biodiesel • Chemicals: Used as feedstock to produce • Feedstock converted to pellets & plant from intermediate storage • Biological conversion; fermentation used to convert ammonia (used in fertilizer industry), briquettes for optimum energy location biomass into ethanol and anaerobic digestion to produce methane, and methanol extraction • Wet storage systems used for storing biogas high moisture biomass for fermentation Biomass Biomass pre Biomass to feedstock Biomass to power producers processing transportation fuel producers Biomass to heat producers K.P. Biocoal © 1Lattice Source(s): Media reports, Company websites, 1Lattice analysis | 07 Agenda Biomass in India Biomass in India: Landscape Multiple organized players exist in conversion of biomass to power, heat & fuel; Biomass pre-processing is mostly dominated by unorganized players in India Players providing Producers & Players processing Players converting Players using heat Players converting equipment / suppliers of natural feedstock by biomass into heat generated from biomass to biofuel machinery to feedstock such as grinding them into energy using direct biomass to generate such as biodiesel & support biomass to corn, soybean, pellets, briquettes combustion electric power bioethanol energy conversion sugarcane, etc processes IKF Green Fuel OVN BioEnergy Pvt.Limited Energreen Power Limited NETPRO Renewable Energy Pvt. Ltd Auro Mira energy K.P. Biocoal © 1Lattice Source(s): Company websites, 1Lattice analysis | 09 Biomass in India: Current scenario Current availability of biomass stands at ~750 MMT per annum in India; Installed production capacity has grown at ~4% CAGR from FY16 to reach ~10 GW in FY22 Current availability Surplus availability Market to reach Highest plant capacity ~750MMT* per annum ~230MMT* per annum ~INR 32,000 Cr by FY31 ~18MW (Tamil Nadu Current scenario of biomass sector in India India installed capacity for biomass production • India’s total available biomass potential stands at ~19.5GW (GW, FY16-22) • ~3.5GW potential from biogas-based cogeneration and ~16GW from surplus biomass • Biomass availability in India can reach ~28GW with an additional ~14GW power CAGR through optimal bagasse-based** cogeneration in sugar mills (FY16-FY22) • Biomass power & cogeneration programme to promote technologies for optimum use 10.2 ~4% 10 of country’s biomass resources 9.8 9.7 9.1 • Revised policy for biomass utilization 8.4 NTPC Dadri plant • Mandated thermal power plants to make biomass pellets with at least 5-7% of their fuel 7.9 CAGR mix by FY24 with up to 10% fuel mix (FY21-FY22) • Biomass market attracting investments from foreign green companies • In 2021, Japanese company, Mitsui & Co. announced an investment of ~INR 30 Cr in ~2% Punjab Renewable Energy Systems • biochemistry • conversion of biomass to gaseous fuel • Technology devised to obtain 100g of green hydrogen from 1kg of biomass by IISc Bangalore students • 5% GST levied on biomass briquettes or solid biofuel pellets, which makes procurement FY16 FY17 FY18 FY19 FY20 FY21 FY22 costly • Export of biomass pellets banned - Note(s): *Million Metric Tonnes, **Byproduct of sugarcane © 1Lattice Source(s): Ministry of New & Renewable energy, 1Lattice analysis | 10 Industrial Goods and Services Demand outlook Growing adoption of biomass as a renewable energy drives the Indian biomass market; while feedstock unavailability & transportation cost inhibit its growth Key growth drivers of biomass Key considerations of biomass Increasing demand for renewable energy Seasonal availability of feedstock • Depleting crude oil reserves and increasing levels of GHG* • Poor resource management & lack of government intervention emission raised demand for clean energy resources in India render feedstock for biomass unavailable • Increase in utilization of biomass and other renewable sources of • Lack of availability over the years due to seasonality; biomass energy is estimated to help reduce carbon dioxide emissions in from agriculture only available during harvesting season India Transportation cost Government initiatives • High transportation costs associated with the establishment & • Ministry of New and Renewable Energy implemented a running of biomass plants programme for optimum use of country’s biomass resources for • Transporting wet biomass from the plantation to production site grid power generation becomes energetically unfavorable & costly Increasing focus on maintaining energy security • Excessive dependence on oil imports leads to strategic risks • No minimum support price offered to farmers • Government introduced national policy on biofuels with an aim • In absence of long-term purchase contracts, no buy-back to increase the utilization of biofuels in energy & transportation arrangements or purchase centers for Jatropha plantations sectors & also to reduce dependency on imports • Biomass surplus supply • Current availability of biomass in India stands at ~750MMT*** • Technical barriers resulting from lack of standards on bioenergy per year with an annual untapped surplus of ~230MMT*** which systems & equipment can be utilized to produce green energy • Appropriate treatment required to prevent biodegradation & loss of heating value Note(s): ): *Green House Gases, **Used as low cost biodiesel food stock, ***Million Metric Tonne © 1Lattice Source(s): Ministry of New & Renewable Energy, Media publications, 1Lattice analysis | 11 Industrial Goods and Services Biomass in India: Opportunities Multiple opportunities exist in biomass energy sector throughout the value chain from production to generation of power, transportation fuel & heat using biomass Business opportunities Stakeholders bene tted • Sale of crop residues • Plantation owners & farmers • Production & supply of carrier materials (gunny bags, poly sacks, etc.) • Biomass contractors / collection agent aggregators • Sale of wood debris from timber processing industries and their allied • State Forest Department sectors • Timber merchants • Scope for production of devices such as axe, crowbar, spade etc. • Cottage units (gunny bags supply, poly sacks supply, • Construction of storage facilities near production facilities to reduce • EPCs transportation cost • Real estate business developers • Storage of biomass In the form of wood pellets & chips • Warehousing manager • Logistics services for mobilization • Authorized vehicle dealers/company outlets processing facilities • Private transport agencies • Production and distribution of dedicated locomotives for biomass • Automobile companies transports • Vehicle service centers • Recruitment of licensed drivers for goods transport • Production of pre-processed feedstock (e.g.: briquettes, pellets) • Processing facility and management • Civil and mechanical construction of biomass processing plants • Wholesale buyers • Manufacturing of machinery and spares for raw material conversion • Service technicians • Bulk procurement of processed goods • Manufacturers of machinery • Production and sale of power to government bodies • EPCs • Commercial production and supply of machinery for power generation • Real estate business developers • Real estate business for establishment of processing plant • Environmental engineering companies • Construction of processing plants • Mechanical service works • Manufacturing of machinery for downstream processing of alcohol • Fermentation units and alcohol distilleries • Synthesis of alcohol in bioprocessing units • Chemical industries and fertilizer units • Procurement of biofuel for energy generation • EPCs • Commercial production and sale of yeast • Fabricators • Production and supply of additive chemical components • Enzyme manufacturers • Production of heat to drive major production operations and cut • Captive heat generators electricity • Manufacturers of vapour absorption systems • Sale of ash from biomass • Buyers of ash from brick kilns • Manufacturing of secondary heat transfer systems • Fabricators • Installation of primary heat generation plant • EPCs © 1Lattice Source(s): Energy Alternatives India, 1Lattice analysis | 12 Industrial Goods and Services Biomass in India: Government policies & schemes Various government policies & schemes focus on promoting biomass generation in India BIOMASS BIOMASS BASED POLICY ON BIOFUELS COGENERATION IN SUGAR POLICY • Ministry of Petroleum & Natural Gas introduced the policy on MILLS biofuels to promote blending of • Schemes provides ethanol in vehicular fuel assistance (CFA) to projects utilizing • MoPNG1 & companies signed biomass like bagasse, agro-based MoU to set up ~5,000CBG2 industrial residue, crop residues, etc. plants by 2023-24 with a cumu- 3 • Financial assistance of INR 25L / MW lative capacity of 15MTPA (bagasse cogeneration projects) & INR 50L / MW (non-bagasse cogeneration projects) REVISED POLICY FOR BIOMASS GENERATION • aims to provide for • In 2021, Power Ministry of India mandat- heat production & production of biomass BIOMASS PROMOTION POLICY pellets to set up facilities to promote at thermal power plants in India in areas processing of agricultural crop residues in an where crop burning is prevalent • This policy promotes manufacturing of economical way briquettes & pellets & biomass (non • Policy aims to reduce 38MT of carbon • Minimum loan ticket size from IREDA will be bagasse) based cogeneration dioxide annually & ~80-90MT by 2030 ~ INR 50L • Objective is to s upport setting up of • Policy executed in ~13 powerplants of biomass briquette / pellets manufacturing NTPC plants & to support biomass-based cogeneration projects • Reduction in stubble burning to be attained by using excess agricultural residue & reduce pollution 1 2 3 Note(s): Ministry of Petroleum & Natural Gas, Compressed Biogas, , Metric tonne per annum © 1Lattice Source(s): Ministry of New & Renewable energy, 1Lattice analysis | 13 Industrial Goods and Services Biomass in India: Technological advancements Producing hydrogen from biomass & generating biofuel from algae & sludge waste are some of the recent breakthroughs in the global biomass energy landscape • IISc. team has developed innovative • Researchers are investigating how to • technology to produce hydrogen from develop “ algal turf scrubbers” - and industry partners are working to biomass long-thread like algae that could be develop a technology to produce biofuel strategically installed near storm water or from wet wastes at water treatment • - a wastewater runoff sites to absorb excess plants hydrogen-rich fuel gas mixture in a novel phosphorus and nitrogen from agricultural reactor using oxygen and steam • Managing and disposing of this sludge is sites costly, accounting for nearly ~45-65% of a • Pure hydrogen is then generated from • Algal turf scrubbers mitigate the harm treatment plant’s total operating expenses syngas using an indigenously developed caused to aquatic ecosystems due to low-pressure gas separation unit • Converting sludge into renewable fuels excess phosphorus & nitrogen could provide an economically viable • The technology produces 100g of • Researchers at Sandia National alternative and transform today’s water hydrogen from 1kg of biomass even Laboratories are determining how to use treatment plants into a new generation of though only 6g of hydrogen are present in algal turf scrubbers to both clean the water resource recovery facilities 1kg of biomass water and to be harvested to produce biofuel © 1Lattice | 14 [1/2] Industrial Goods and Services Biomass in India: Players Players from various industries such as power, cement, & FMCG have been taking initiatives to use biomass-based energy in various operations to reduce emissions Players Key initiatives towards biomass energy • First Indian power plant to in the overall fuel mix • • Announced plans in 2019 to open a paddy straw-into-biogas conversion plant at Karnal in Haryana • Plant expected to convert stubble generated from 20,000 acres of farmland in a year into gas • Offers a wide range of biomass-based solutions that can be used for heating applications • Provides renovation and modernization along with upgrades for old boilers and process furnaces • Manages biomass fuel by establishing long-term contracts with farmers and vendors to ensure an uninterrupted supply of fuel to the plant • Set a target to be carbon-negative by 2050 • Targets complete replacement of fossil fuels with biomass & other energy sources by 2035 • Aims to cut emissions by ~25% by 2030 & produce carbon-neutral products by 2050 • Signed an agreement with a domestic biomass aggregator to partly replace coal and petroleum coke in its cement kilns • Signed an agreement with Punjab Renewable Energy Systems (PRESPL) to expand use of biomass and alternative fuels towards replacing fossil fuels • Signed an agreement with Punjab Renewable Energy Systems (PRESPL) to use agricultural waste as biomass energy for its manufacturing operations © 1Lattice Source(s): Press releases, Company websites, 1Lattice analysis | 15 [2/2] Industrial Goods and Services Biomass in India: Players Players from various industries such as power, cement, & FMCG have been taking initiatives to use biomass-based energy in various operations to reduce emissions Players Key initiatives towards biomass energy • Eliminated coal usage across its operations, replacing it with green alternatives such as biomass and biodiesel as a part of its broader plans to achieve zero emissions in operations by 2030 • • Pressed 7 additional renewable energy projects into service to source ~24M units of electricity from clean energy • Project powered by wind, solar, and biomass likely to achieve a reduction of ~2L tonne of carbon emission every year • Meeting ~41% of their total energy requirements through renewable energy such as biomass, wind, & solar • highest level by Indian Green Building Council • Utilize biomass and farm waste for running refrigeration units at farm gate and aggregation points • Allows farmers to store & preserve their produce until market demand and prices increase enabling them to earn more in an environmentally sustainable manner Green fortress • Offers biomass conversion Engineering • Announced plans in 2020 to set up two biodiesel manufacturing facilities in Haryana and Dubai • Plans to open ~30 biodiesel pumps in North India © 1Lattice Source(s): Press releases, Company websites, 1Lattice analysis | 16 Industrial Goods and Services Biomass in India: Investments Various national & international players are actively investing & collaborating to boost global biomass energy ecosystem Players Description • Japanese company Mitsui & Co plans to invest ~INR 30 cr. in Punjab Renewable Energy Systems Pvt Ltd SPL), (PRE one of the leading biomass supply chain management companies • PRESPL focuses on collection, storage & processing of agricultural residues & production of biomass briquettes & pellets • The investment will help Mitsui & Co achieve their important goal of creating a sustainable society while furthering the expansion of our bio-energy business in India and around the world • Known as largest biogas network in the whole of India linked up in coaching manpower either online or on-site • National collaborations: - MoU with Skill council for green jobs signed in October 2018 - MoU with Gujarat Energy Research & Management Institute to carry out activities, consult for the development, and promote the biogas sectors • International collaborations: - Partnership with the German Biogas Association in 2018 to offer demand-oriented services - Partnership with ENAMA in 2015 to enhance technical cooperation • developing advanced biofuels, using crop waste or inedible plants and new conversion processes • Their biofuels research teams work with leading biotechnology companies and academic institutions • Committed to producing & supplying low-carbon fuels such as sustainable aviation fuel (SAF), biodiesel, bioethanol, and renewable compressed natural gas (R-CNG), to help lower carbon emissions from transportation © 1Lattice Source(s): Media reports, 1Lattice analysis | 17 Agenda Biomass global scenario Industrial Goods and Services Biomass global scenario: Biomass facilities High concentration of operational biomass facilities in Europe followed by South America; Asia catching up with ~40 upcoming biomass facilities ~150 ~11 ~35 ~9 ~50 ~40 ~160 ~1 ~1 ~5 ~3 ~2 ~85 ~1 ~1 : # Operational biomass facilities ~1 : # Planned & under construction biomass facilities ~3 ~1 ~2 th ~80% 7% ~1,436PJ* USA leading biofuel Expected global Annual increase in Bioenergy account of Global biofuel demand Global biomass production in FY22 expansion in biofuel modern bioenergy use world total primary FY22 electricity market consumption by US, between FY11-22 energy supply FY22 Canada, Brazil, Indonesia & India Note(s): *Petajoules (1EJ = 10^3 PJ) © 1Lattice Source(s): Research paper, 1Lattice analysis | 19 Industrial Goods and Services Biomass global scenario: Current scenario Current global installed capacity of biomass production stands at ~143GW & is expected to grow at a CAGR of ~7% to reach ~176GW by FY25 Current global biomass scenario Global installed capacity for biomass production is • Global biomass installed capacity stands at ~143GW & is expected to increase expected to increase at a CAGR of ~7% from FY22 to FY25E to ~176GW by FY25 • Total biogas & biomethane resources could cover ~20% of global gas demand Global installed capacity for biomass production while reducing greenhouse gas emissions (GW, FY16-25E) • Availability of sustainable feedstocks set to grow by ~40% by FY41 • Abundance of untapped bioenergy in Southeast Asia which can meet energy CAGR demand of ~2.8EJ* FY22-FY25E • Germany will release its biomass strategy plan in 2023 which would consider 176 ~7% the potential of sustainably available biomass & ensure sustainable biomass production and consumption in Germany - Priority would be given to material use of biomass (building material) over 143 energy use 133 • Dutch energy sector & several NGOs have signed an agreement which mandates 124 118 111 105 • Romande Energie Group in Switzerland announced expansion in biomass by 96 investing in Proxipel, a startup for biomass pellets • ~US$ 6M project funded by the Department for Business Energy & Industrial Strategy (BEIS) to increase biomass crops in UK • Sustainable Energy Fund for Africa (SEFA) approved ~US$ 1M to New Africa Impact Ltd to prepare two bioenergy plants in Ghana • BECCS (Bioenergy with carbon capture & storage) technology generates energy from biomass while storing the carbon released in this process through carbon capture, usage & storage (CCUS) technology • UK Government announced ~US$ 31M funding for innovative new technologies that will generate clean hydrogen from biomass & waste FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY25E • Canadian & Ontario governments to invest more than ~US$ 11M to expand Char Technologies to produce biocarbon & become the largest renewable natural gas facility using woody biomass Note(s): *Exajoule (1EJ = 10^3 PJ), **Forest Stewardship Council © 1Lattice Source(s): Media reports, IEA report, 1Lattice analysis | 20 Biomass global scenario: Landscape Presence of organised players in producing feedstock, pre-processing & conversion of biomass to heat, power & fuel & providing technology in the global biomass market Producers & suppliers Players processing Players converting Players using heat Players converting Players providing of feedstock such as natural feedstock by biomass into heat generated from biomass to biofuel equipment / corn, soybean, grinding them into energy using direct biomass to generate such as biodiesel & machinery to support sugarcane, etc. pellets, briquettes combustion electric power bioethanol biomass to energy conversion processes © 1Lattice Source(s): Media reports, 1Lattice analysis | 21 [1/2] Biomass global scenario: Landscape Various global players such as Mitsubishi, Sumitomo, PLN & SUEZ are taking active initiatives towards generating & harnessing biomass energy Players Location Initiatives towards generating & harnessing biomass energy • Mitsubishi Heavy industries signed an MoU with PLN Indonesian Power to conduct a study to examine • Japan • This will consider various aspects of biomass supply chain , including handling, storage, transport & boiler • Indonesia • Sumitomo heavy industries acquired a • • SUEZ teamed up with Reseau GDS (local natural gas distributor) to inject biomethane produced from wastewater into the natural gas network under ‘Biovalsan project’ • Spain • 7,000 tons of CO2 emissions avoided through the sludge treatment into biomethane • Babcock & Wilcox signed an agreement with NRG Korea to study the applicability of B&W’s Brightloop technology for a hydrogen generation facility using biomass fuel in South Korea • USA • MoU signed would focus on studying the technology & potentially develop the project which would use • South Korea waste biomass as feedstock to produce hydrogen • Babcock & Wilcox subsdiary, B&W Renewable Service A/S awarded a contract for more than ~US$ 15M to design & install a and other combustion equipment for a green energy project in Europe • Biomass Secure Power Inc. signed an MoU with Lower Nicola Indian Band proposing a joint venture to • Vancouver, build a 15MW co-generation power plant & pellet mill • Technical know-how would be supplied by Biomass Secure Power for plant development; Land to be Canada © 1Lattice Source(s): Company websites, 1Lattice analysis | 22 [2/2] Biomass global scenario: Players Research investments by POET & Ramboll further drives growth in the global biomass market Players Location Initiatives towards generating & harnessing biomass energy • Project consists of in Finland of capacity 70MWe* (electric) & 175MWth** (heat & steam) to replace an existing solid fuel (peat & biomass) plant • Finland • Siemens Osakeyhtiö contracted by Oulun Energia to supply a 75MWe* steam turbine & generator & • Acciona Energia announced construction of a ~50MW biomass plant in the municipality of Logrosan in Spain • Plant’s construction to begin in the second quarter of 2023 with the aim of producing energy in the second half • Spain of 2025 • Research project carried out by Ramboll, GEUS, DTU, & SINTEF studying the feasibility of using CO2 capture • Netherlands at Danish heat & power plants • In 2015, Ramboll entered a contract for the bioconversion of one of DuPont’s production plants in Denmark • Ameresco completed the construction of the DOE Savannah River Site (SRS) Biomass Cogeneration Facility • USA (BCF) installed under the ~US$ 795M energy savings performance contract (ESPC) awarded to Ameresco in May 2009. • POET funded Iowa State University (ISU) for carrying out a research on converting starch into ethanol (biofuel) through a research collaboration • South Dakota, • POET acquired Flint Hills Resources’ entire ethanol business; the deal will boost POET’s ethanol production USA capacity by ~40% to 3B gallons per year • • UK its bioenergy with carbon capture & storage (BECCS) project • Mercedes-Benz plant in Jawor (Poland) to cover its heat requirements by means of a biomass-pellet heating • Germany plant and a boiler that burns biomethane from renewable raw materials © 1Lattice Source(s): Company websites, 1Lattice analysis | 23 Biomass global scenario: Biofuel market & opportunities & challenges High growth in demand of biofuel in Indonesia from FY21 to FY22; High moisture content & low density of biomass are a few challenges amidst growing opportunities Tailwinds and Opportunities Global biofuel demand is growing at ~6% CAGR between • Growing global investments FY21 & FY22 - In 2022, European investment bank sanctioned loan of ~US$ 42M to Renewi for setting up biogas & waste sorting facilities Global biofuel demand growth by region - (Million liters / year , FY21-22) • Global export prospects Biofuel demand - Countries with surplus low-cost sustainable biomass can export to ~5,285 growth countries with less to no availability such as European Union 684 (FY21-FY22) • Global potential for developing countries - Developing countries with warmer climates & lower latitudes experience ~6% 1,166 relative advantage as biomass produced in tropical & sub-tropical climates ~3,144 have 5x higher productivity of biomass than temperate regions such as 36 Europe & North America ~1,796 1,645 1,150 Headwinds and Challenges 648 16 335 • High moisture content in biomass material 698 - Reduces the effectiveness of conversion processes & renders the biofuel 1,645 1,216 ~345 ineffective 794 151 • Low density of biomass material 407 298 212 194 - Density & size of biomass material increases transportation & storage -303 Biofuel demand Ethanol Biojet fuel -422 costs; this challenge can be overcome through preprocessing of biomass material into pellets & briquettes Biodiesel • Supply chain imbalance: - Seasonal availability of biomass USA Brazil Europe Indonesia India Rest of the world Price per unit - Developing countries like India, Thailand & Malaysia engage in low-value utilization* of biomass further leading to less availability of biomass for scarcity high-value utilization © 1Lattice Source(s): IEA report, 1Lattice analysis | 24 Biomass global scenario: Future outlook Liquid biofuel & biogas consumption in global transport is expected to increase from ~3% in FY16 to ~22% in FY51 Global renewable energy consumption in transport sector is expected to increase from ~4% in FY16 to ~58% in FY51 - Share of electricity in transport sector rises from ~1% in FY16 to 33% in FY51, 85% of which is renewable Global energy consumption in transport sector - Biofuels increase their share from 3% in FY16 to 22% in FY51 1 (K PJ , FY16-51) ~110 Growth in total liquid biofuel production - Total liquid biofuel production grows from ~129B liters in 1% 3% 1% ~99 FY16 to ~900B liters in FY51 2% - Nearly half would be advanced biofuels, which can be produced from a wider variety of feedstocks than conventional 28% biofuels, but which supply just ~1% of biofuels today 8% 2 Emergence of new energy sources in combination with ICT 22% 94% - As performance improves and battery costs fall, sales of 5% electric buses and electric two- and three-wheelers is 4% expected to grow 33% Use of hydrogen as transportation fuel in fuel-cell EVs - Production of hydrogen from renewable power may provide an FY16 FY51 important option in efforts to expand renewable power generation Liquid biofuels & biogas Hydrogen Electricity** 1 2 Note(s): Petajoule, Information & communication technology, *Non-renewable sources, **Renewable sources © 1Lattice Source(s): IRENA report, 1Lattice analysis | 25 Biomass global scenario: Future outlook Modern biomass consumption in global building sector is expected to increase from ~4% in FY16 to ~14% in FY51 Global renewable energy consumption in building sector is expected to increase from ~36% in FY16 to ~77% in FY51 - Requirement of cumulative investment of ~US$ 38T by FY51 Global energy consumption in building sector home systems with advanced controls for lighting and heating, 1 (K PJ , FY16-51) improved heating and cooling systems, better insulation etc. ~118 Shift in cooking technologies from fuel to electricity 0.5% 0.5% ~106 - Electric stoves, such as induction cookstoves, can cut the 7% 4% 3% 2% 10% 24% Use of heat pumps to heat buildings 4% - 5% 48% boilers and can be powered by renewable electricity 11% - Number of o perational heat-pump units is expected to increase from ~20M in FY16 to ~250M units in FY51 21% 14% - Heat pumps are expected to supply ~27% of the heat demand 6% 2% in the building sector 23% 7% 8% Bioenergy to remain largest renewable fuel source in building FY16 FY51 - Expected to meet ~30% of cooking & heating demand by FY51 implying 3x increase compared to FY16 levels Gas Oil District heat* Electricity* Traditional biomasss Modern biomass Electricity** - Use of biogas expected to increase Coal District heat** Geothermal heat Solar thermal 1 Note(s): Petajoule, *Non-renewable sources, **Renewable sources © 1Lattice Source(s): IRENA report, 1Lattice analysis | 26 Biomass global scenario: Future outlook Modern biomass consumption in global industrial sector is expected to increase from ~7% in FY16 to ~19% in FY51 Global renewable energy consumption in industrial sector is Increase in investment in low carbon energy expected to increase from ~14% in FY16 to ~63% in FY51 - To achieve the level of decarbonization expected in FY51, investment in low carbon energy technologies in industry Global energy consumption in industrial sector would have to more than double 1 (K PJ , FY16-51) - Additional ~US$ 3T required for total investments to amount to ~122 US$ 5T in FY51 ~110 2% <1% Important role played by hydrogen in FY51 7% - Use of hydrogen derived from renewables to 7% 36% 4% FY51 20% - Replacing natural gas & produce chemicals in the industrial 2% sector 4% 20% 19% Large growth in use of solar thermal heat - Solar thermal heat expected to rise to ~3B Sq. m. of solar 11% 5% 6% providing 7% of industry’s heat demand 15% 31% - ~80M units of heat pumps to be installed to meet low 5% 6% temperature heat needs by FY51 - Bioenergy to remain critical for medium & high temperature FY16 FY51 processes; industry will scale up the use & collection of Oil Gas Electricity* District heat* Biomass Solar thermal distribution Geothermal heat Electricity** District heat** 1 Note(s): Petajoule, *Non-renewable sources, **Renewable sources © 1Lattice Source(s): IRENA report, 1Lattice analysis | 27 Bioenergy Devco secured ~US$ 100M investment for developing their business from Irradiant Partners in North America • Bioenergy Devco (BDC), leading global developer of anaerobic digestion (AD) secured ~US$ 100M Irradiant Partners, an alternative investment manager with expertise in climate infrastructure, ~US$ 100M North America private equity and credit • This investment will support the development of multiple anaerobic digestion facilities to drive sustainable organic waste recycling & reduce greenhouse gas emissions • Neev fund (infrastructure private equity fund managed by SBICAP) invested an undisclosed amount in Punjab Renewable Energy Systems Pvt. Ltd _ India (PRESPL) • This would help PRESPL scale their business & expand into other geographies, especially India’s less developed states • ventures & CO capital invested a collective total of ~US$ 15.6M in ~US$ 25M Mexico Sistema.Bio in February 2022 • Native invested ~US$ 9.7M in Sistema.Bio in October 2022 • Amcor invested ~US$ 250K in Bloom Biorenewables in September 2022 • European Innovation Council invested ~US$ 2.66M in Bloom ~US$ 3M Switzerland Biorenewables in March 2022 © 1Lattice Source(s): Crunchbase, Company websites, Media reports, 1Lattice analysis | 28 Global Clean Energy secures a total of ~US$ 195M funding from USDA & ExxonMobil in 4 rounds of funding • Breakthrough Energy Ventures invests ~US$ 1.3M in Bloom Biorenewables in February 2021 • Yokogava Electric Corp invests ~US$ 917K in Bloom Biorenewables in ~US$ 2.43M Switzerland August 2020 • Venture Kick invests ~US$ 108K in Bloom Biorenewables in June 2020 • Foundation for Technological Innovation invested ~US$ 108K in Bloom Biorenewables in February 2020 • ExxonMobil invested ~US$ 165M in Global Clean Energy Holdings in February2022 ~US$ 195M California • US Department of Agriculture invested ~US$ 30M in Global Clean Energy Holdings in September 2022 • Fortum invested ~US$ 4.5B & ~US$ 8.5B in Uniper in January 2018 & January 2022 respectively ~US$ 15B Germany • KFW invested ~US$ 2B in Uniper in January 2022 © 1Lattice Source(s): Crunchbase, Company websites, Media reports, 1Lattice analysis | 29 We’re here for you Let us know how can we meet your business requirement? 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