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Biomass Industry in China: The Future of Energy in China creates new Opportunities

By 2 August, 2018June 30th, 2023No Comments

Bamboo waste materials for biomass energy

Biomass is a form of renewable source of energy that comes directly from crop production and livestock and includes categories like manure, food crops, forest debris and certain types of water residues.

The rapid pace of urbanization and development of the past decades has made China one of the largest producers and consumers of energy in the world.  Currently, fossil fuels comprise approximately 90% of the country’s total energy consumption and this leads to large amounts of greenhouse gas emissions, air pollutants and haze – real and serious hazards to health and environment.

As China continues on its path towards development and prosperity for its population, the government is placing more importance and attention to the development of renewable energy sources as its strategy to fight environmental threats such as global warming, rebalance rural vs. urban economic development and improve household’s access to energy.

China’s vast territory, population and diverse topography are ideal conditions for biomass supply to be a significant source of energy.  The primary bioenergy sources stem from agriculture and forestry waste, the main economic activities in a significant portion of the country.  Annually, approximately 830 million tons of crop straw waste and forest debris are produced, placing China in a leading position globally.  However, only less than half of this total biomass resource potential is used for some purpose (heating, cooking, etc…) with only a small portion collected on a systematic basis leaving as a result that the majority of the biomass resources are not converted into modern energy carriers.  The unused organic waste is not only a lost source of economic opportunity but also toxic to the environment.

Recent announcements by the Chinese government agencies reveal new insights on how the country intends to achieve its 2020 energy goals to increase by 15% the energy consumption from non-fossil fuels sources while reducing the share of coal energy from 64% (2015) to 58% by 2020.  The rollout such a large-scale energy shift program will require a great deal of investment from both government, global private industry players and the availability of technical expertise. The Chinese government has already committed to invest $72 billion per year to fund renewable energy projects to support the transition by 2020:  this priority program is expected to not only reduce carbon footprint on environment but also to generate jobs in local communities, providing opportunities for wealth creation and closing the socio-economical gap between rural and urban societies.  The 5-year plan will drive a 40% annual increase in demand for biomass over the next three to five years and it will continue to grow significantly into the next decade.

Currently, the two modern biomass energy technologies being utilized most widely in China are anaerobic digesters and small-scale thermochemical gasifies.  Overall, the industry is still in its infant stage despite the strong growth trend of the biomass sector in recent years.  One main reason for the slow evolution is because it was developed domestically by small local companies with limited financial and technological assistance from abroad.  Other challenges for the industry are:  inadequate fuel supply, inefficient connection to the power networks for transmission and distribution, lack of management expertise and technological immaturity.

China’s 2020 plan for renewable energy targets includes the utilization of all types of biomass energy but solid biomass fuel, also known was biomass pellets or pucks, are most relevant because most other natural biomass materials cannot be utilized in large scale production due to their low density and high moisture characteristics. Recognizing this, the government has committed to increase its support in developing pellet fuel technology and communicated it publicly as an approach to modernize and improve rural energy. In this model, a centralized plant produces pellet fuel using biomass feedstock collected from surrounding farmers and distributes the energy in the region using a centralized network.  Key success factors for this model are the creation of supporting government policies, effective supply chain management and efficient processing technologies.

China’s industrialization and economic development has led to an overall improvement of the standard of living for the population.  Evidence of this trend is the decline in usage of biomass as a source of energy in rural areas in favor of more modern energy carriers that are more efficient and less hazardous to health and environment.  The Chinese government recognizes that this trend, together with the abundance of supply of biomass energy source, creates the ideal conditions to develop further biomass as a source of clean energy for the less developed inland regions: the implicit challenges of this project will require the collaboration of public and private sectors creating many new investment opportunities.  The support of the private industry with leadership, technology and financing are key elements to help the government concretize specific projects to be part of its 2020 renewable energy program.  The implementation of the programs is expected to bring many benefits to the country such as reduction of environmental pollution and socio-economic benefits like job and wealth creation and therefore have the attention and support of the government and regulatory agencies, a pre-condition for a positive and favorable outlook for the industry in China.

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