Reduction of environmental impacts through optimisation of biogas value chains : drivers, barriers and policy development

Biogas production from anaerobic digestion of organic resources can potentially contribute to a reduction in greenhouse gas emissions in several sectors and can play a central role in both the bioeconomy and the circular economy. Several European countries have political goals to increase biogas production and to increase the amount of manure to anaerobic digestion. The treatment method is, however, known to be costly and the markets for biogas and for digestate are immature. There is a need for a better understanding of how the biogas value chains should be designed to minimise environmental impacts while at the same time achieving profitability for the actors. In Norway the most common substrates for biogas production are sewage sludge and organic waste from households and industry. Manure is identified as the substrate with the greatest theoretical biogas potential, but there are currently few plants utilising manure. Until recently, biogas in Norway has mainly been applied to generate heat, where a large share has been utilised internally at the plant or in surrounding buildings. In the last few years, however, several new and existing plants have invested in upgrading equipment to produce biomethane for use as a fuel in the transport sector. The most common treatment of the digestate, which is a co-product from anaerobic digestion, is to dewater it and use the dry fraction as a soil improvement product, while the wet fraction is sent to waste water treatment. A few new plants do, however, deliver liquid digestate to agriculture as a biofertiliser. The objective of this thesis has been to make a contribution towards knowledge regarding ways of optimising Norwegian biogas value chains to reduce environmental impacts, by developing models that can provide decision support. The aim is to suggest improvements to the regulatory systems and the preconditions for further development of the biogas industry in Norway. Systems theory and system analysis methodology was applied, and three different domains were assessed: environmental impacts, economy of the actors in the value chain and policies. The case studies were limited to the substrates organic waste from households (food waste) and manure from cattle and pigs. In the economic assessment, only the annual results for the biogas plants and cattle and pig farms were calculated. Four scientific papers were developed as part of this PhD thesis. In the first paper, life cycle assessment methodology and generic results were presented for the BioValueChain model. The model was developed to be able to evaluate the environmental impacts of different options for biogas value chains. In the second paper, environmental assessment was combined with economic assessment of large scale biogas plants for four different value chain configurations. In addition, the most profitable option was used as a reference to calculate the incentives necessary to make the most preferable option in terms of reduction of environmental impacts as profitable as the reference. A comparative assessment of biogas value chains in Norway and Denmark was carried out in Paper 3. Denmark has implemented an end-use support of biogas through a feed-in tariff, while Norway provides investment support and support for farmers per tonne manure delivered to a biogas plant. The objective was to evaluate the effect of different regulatory systems. This was achieved by defining a Norwegian and a Danish biogas value chain, and calculating the costs and income. In addition, the economic results were calculated for the Norwegian value chain when assuming Danish conditions, and vice versa. In paper 4 the methodology of an optimisation model for the use of manure resources for anaerobic digestion in one region was described, and the model was employed to perform a case study on 50 farms in one region in Norway. The model calculated the economic profit for farmers and the greenhouse gas emissions for three options: no biogas production, farm scale biogas production and centralised biogas production. The results in this PhD work showed that the amount of organic waste and manure used for anaerobic digestion should be increased to reduce environmental impacts. The most preferable option for the use of biogas is as a fuel for transport to substitute diesel, and the best use of the digestate is as a fertiliser in agriculture as a substitute for mineral fertiliser, which requires a high level of sector integration in the value chain. To obtain a maximal reduction of greenhouse gas emissions, efforts should be made to avoiding diffuse emissions and reducing emissions from the storage of digestate. The economic calculations showed that large-scale biogas plants in general lack economic incentives to include the agricultural sector in the value chain. Inclusion of the transport sector is the most profitable option for use of biogas only for the largest scale biogas plants and for those who are able to sell biomethane for a high price. The most profitable option regarding the management of manure for cattle and pig farms was the supply of manure to a centralised biogas plant and the return of the digestate as biofertiliser. This was, however, dependent on the agreement between the farm and the biogas plant. As a result of the newly introduced support per tonne manure sent to biogas production, investment in a small scale biogas plant can also be profitable for most cattle and pig farms, all though the majority of farms in Norway would struggle to find a good use for the biogas on the farm. This indicates that the current barriers to increased use of manure resources for biogas production are not principally economic. The current support system has contributed to an increase in biogas production. Based on the assessments performed as part of this thesis, however, some recommendations were made to improve the framework conditions of an optimised biogas production in Norway, to reduce environmental impacts and achieve the political objectives. While the exemption from CO2 tax and road fee has contributed to an increased use of biogas in the transport sector, an increase in the taxes for fossil fuels could contribute to making upgrading of the gas the most profitable option for most large-scale biogas plants. Raising the importance of the environmental aspects in public procurements would enhance the role of biogas in achieving the political objectives of obtaining fossil free public transport and in the reduction of environmental impacts from waste treatment. In addition, it is important to consider measures that motivate large scale plants to use manure as a substrate and deliver digestate to agriculture. An increase in the knowledge regarding the economy of farm scale biogas production in a Norwegian context would make the results from the economic assessment more robust and reduce the risk for farmers in making the investment. These include knowledge with regard to the start-up and operation of small scale plants to avoid unforeseen costs. Political instruments that encourage the development of technology for cheaper small scale upgrading solutions could further reduce the greenhouse gas emissions, as would the use of raw biogas in tractors and other agricultural equipment currently using fossil fuels. In some regions, this could also be achieved by implementing regional development plans for farm scale production with piping infrastructure and centralised upgrading. These measures could promote an increase in the amount of manure for biogas production The work carried out as part of this thesis has shown that models combining environmental life cycle assessment and economic cost assessments can serve as decision support and can make a valuable contribution to policy development. The results are, however, highly dependent on the quality of the data used and the level of detail in the models. In order to increase the robustness of the results, there is a need for more research into the quantification of emissions from the storage and spreading of digestate, and ways in which they can be reduced. In addition, there is a need for a greater understanding of the properties of digestate as a fertiliser, such as the fertilising effect, carbon storage and other contributions to soil quality. More research should also be carried out on the emissions from dewatering and composting of digestate, and its use as a substitute for peat. Furthermore, the cost assessments could be expanded to also to include the economy of the actors in the transport sector and the farmers receiving digestate