Piggy Bank? Turning Waste into Energy

By Angela Ni 9 June, 2011

Ni looks at the promise of large-scale biogas digesters for livestock wastewater treatment.

Only 3-6% of livestock operations in China have animal waste treatment facilities.
Good scalable solution: addresses excessive nitrogen whilst producing energy at the same time.
Downside: upfront large capital investment with poor financial IRR but an overall economic IRR of 7%.

Outside Yunnan’s provincial capital of Kunming, Huijia Peike Pig Breeding Company (云南惠嘉托佩克育种有限公司) is setting the standard for eco-friendly livestock breeding practices.

Despite the fact that Huijia Peike is a large pig breeding operation with 10,000 hogs, it is different from other operations of similar scale. In 2009, the company installed a 1000 cubic meter UASB anaerobic digester. Through a process of anaerobic fermentation, the enormous digester breaks down and treats up to 150 tons of pig waste per day, generating an average 250 cubic square meters of biogas. The digester also removes up to 90 percent of livestock waste pollutants that would otherwise contaminate nearby farmland and water.

A small portion of the biogas generated is used to power onsite facilities. The remaining gas is piped at no cost to the 42 households of nearby Caotianba Village1. To support this arrangement, the local county government subsidized households’ installation of biogas-operated cooking appliances, such as stoves and rice cookers. Each year, the biogas saves villagers 600 CNY (92 USD) annually in fuel costs, while limiting deforestation and indoor air pollution from cooking fires.

Huijia Peike Pig Breeding Company is Yunnan’s first large-scale biogas digester at a factory farm. Other notable adopters across the country are receiving increased public attention and praise2. Huijia Peike Co. is part of a growing trend of large livestock farms. While more than half of China’s livestock are raised on household farms, China’s doubling appetite for meat and poultry3 is fuelling the demand for intensive animal husbandry. Already, China has an estimated 64,0004 large farms.

The manure in water problem

However, unlike Huijia Peike Company, only three to six percent of medium and large-scale livestock operations in China have animal waste treatment facilities. As a result, an estimated 80 percent5 of livestock waste goes untreated.

Untreated animal manure is polluting China’s water. A typical industrial livestock farm collects urine and manure in large cesspools. These cesspools of untreated animal waste commonly leak. Full of ammonia, phosphorus, nitrogen, and potentially drug resistant bacteria, leakage seeps into waterways and groundwater, causing high chemical oxygen demand (COD – the main measure of organic compounds in water) and eutrophication.

Official acknowledgment of livestock wastewater pollution is encouraging. Last year, Yunnan’s first environmental public litigation case6 was brought by the Kunming City Environmental Bureau against a pig husbandry factory for polluting local drinking water sources. The farm was fined over 4 million CNY (650,000 USD) and ordered to clean up its operations—a hefty fine by Chinese standards and a warning to other polluters.

For the first time, China’s 2010 Pollution Source Census7 confirmed that agriculture was a bigger source of water pollution than industry. According to the study, agriculture is responsible for 44 percent of COD, 67 percent of released phosphorus and 57 percent of nitrogen discharges. The census reported that in 2007 alone, the livestock industry dumped 243 million tons of untreated faeces and 163 million tons of urine into water sources.

The biogas solution

As it stands, half of China’s water is unfit for human use, which prompted the central government to set ambitious water targets in the country’s recently unveiled Five-Year Plan. The plan calls for reductions in COD and sulphur dioxide by 8 percent, and in ammonia nitrogen and nitrogen oxides by 10 percent each. The Ministry of Environmental Protection is also tightening wastewater treatment requirements for livestock farms, setting strict discharge standards, and promulgating environmental management regulations.8

A March China Water Risk article9 warns, however, that these new pollution reduction targets “could conflict with farming productivity and food security”. Scaling up biogas digesters on large livestock operations could avoid such a conflict. Biogas digesters would allow a simultaneous transformation of China’s growing livestock breeding industry and addressed the country’s ongoing water security problems. Before this can happen in a sustained manner, several technical and financial constraints need to be address.

Barriers and incentives

China’s medium- and large-scale biogas digester industry suffers from technical immaturity. Compared to the impressive advancement of rural household biogas digesters10 in China, medium to large-scale biogas digesters have only recently been rolled-out. As a result, the technical capacity to build and operate large biogas plants remains nascent with inconsistent design and operations standardization across regions.

Domestic biogas engineering companies have begun to introduce international anaerobic digestion technologies, and European biogas equipment suppliers have entered the market by establishing local subsidiaries and joint ventures (e.g., ENVITEC Beijing; WELTEC BIOPOWER). There still is room for improvement in training of local technicians, quality evaluation, biogas production performance, and the appropriate use of auxiliary equipment. Promoters of biogas should equally consider the hardware and software aspects of this technology, taking into account lessons learned locally, as well as international best practices.

Initial high investment costs have been further cited as a barrier to the scale-up biogas technologies.  According to an Asian Development Bank report11, a sample livestock farm biogas plant supplying gas to 200 households requires an investment of 1,560,000 CNY (240,000 USD); 138,473 CNY (21,303 USD) in annual operation and maintenance, and provides annual economic benefits of 193,770 CNY (29,810 USD). In accounting terms, the plant’s financial internal rate of return (FIRR) is negative and the economic internal rate of return (EIRR) is only 7%.  Therefore, financial benefits alone are not high enough to encourage farms to invest in biogas purely from a profit perspective.

To help spur growth in biogas digester construction, the PRC government offers subsidies12, in addition to preferential tax rate and discounted interest rate policies for large-scale biogas plant construction on livestock farms. At present, the central government subsidises up to 45 percent of initial digester construction costs. Improving investment channels for livestock plants owners, and encouraging private sector participation, will be key to the growth of this important technology.

Ultimately, coalescing pressures from rising domestic meat consumption and more stringent environmental standards will likely force China’s large-scale livestock firms to recognize biogas as a necessary and acceptable cost of doing business. The private sector has the opportunity to enter the Chinese biogas market and will benefit from the commercial viability of certified emissions reductions under the Kyoto Protocol’s Clean Development Mechanism. Already, the global biogas plant market is estimated to reach 8.9 billion USD13 by 2017, and lessons learned in China will be valuable to other countries/companies searching for effective and creative ideas of eco-friendly husbandry technologies.

Despite the aforementioned financial and technical constraints, back in Yunnan, the Huijia Peike Pig Breeding Company is paving the way for other adopters of biogas. Building on its success in Caotianba Village, the company is planning to install an even larger livestock waste biogas digester in a nearby township—helping in its own small way to secure China’s future water and food concerns.

1 A Story of Renewable Energy Use in Rural China, PLOS Medicine Community Blog, Angela Ni, February 10th 2011
2 China Turns to Biogas to Ease Impact of Factory Farms, environment 360, November 2010; and China Farm Gets Shocking Amount of Power from Cow Poop, New York Times, May 6, 2010
3 China’s rapidly growing meat demand: a domestic or an international challenge?, Centre for World Food Studies, December 2005
4 Chinese Farms a Growing Challenge, Mia MacDonald, World Watch Institute  (https://www.worldwatch.org/node/5916
5 China Turns to Biogas to Ease Impact of Factory Farms, environment 360, November 2010
6 Kunming E-Court Moves Environmental Public Interest Litigation Forward with RMB 4.3 Million Fine, China Environmental Governance- The US- China Partnership for Environmental Law, February 1, 2011
7 Chinese farms cause more pollution than factories, says official survey, Guardian Environment, February 2010
8 Qingfeng Zhang et al. Rural biomass Energy 2020. Mandaluyung City, Philippines: Asian Development Bank, 2010.
9 Lisa Genasci, China’s 12th Five-Year Plan Emphasizes Balanced Growth and Environment. Hong Kong: China Water Risk, 2011.
10 Biogas toilets in a Chinese Village, PLoS Medicine Community Blog, Angela Ni, November 9, 2010.
11 Qingfeng Zhang et al., 2009.
12 Chunsheng Yao. The Prospects for Biogas Systems in Rural China: Incentives, Barriers and Potentials. The International Institute for Industrial Environmental Economics (IIIEE) , 2010
13 Global Biogas Plants Market to Reach $8.98 Billion by 2017. Anaerobic Digestion News, April 10, 2011
Angela Ni
Author: Angela Ni
Angela Ni is a 2010-2011 U.S. Fulbright Fellow based in Yunnan, China. Ms. Ni’s research project is on the environmental health implications of China’s water conditions, focusing on scaling up alternative sanitation technologies and livestock wastewater treatment. Ms. Ni has five years experience in public health. Her fields of expertise are water and sanitation, behavior change communication and health promotion, and environmental health policy analysis. In China’s environmental health sector, Ms. Ni offers a range of experience collaborating with rural communities, government, and nonprofit organizations. Ms. Ni is also a guest blogger for the PLoS Medicine’s Speaking of Medicine blog. Ms. Ni holds a Bachelors Degree in Political Economy from the University of California, Berkeley.
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