What Assistance Can EAI’s BioBiz Provide for CBG?

We can help you with a comprehensive market intelligence on the following aspects of a CBG business:

Market Trends

Objective: To provide the big picture on India’s emerging sustainable energy trends and where CBG fits into this picture.

• Brief highlights of India’s current and future energy requirements and where CBG fits in
  • Inputs on the macro trends in primary & secondary energy uses and user segments in India
  • The fuels used, all three types of fuels - solid, liquid and gaseous fuels - and growth trends for these fuels across the end user segments 
  • How and where renewable fuel and energy sources are being introduced currently, and from among this
  • Where CBG is finding a role currently
• What could be India’s energy pain points over the next two decades and what role will CBG play in it?
  • Key energy pain point domains in power, transport fuels, and for heating and cooling (both industrial and residential)
  • For the above, specific domains in which CBG is expected to be a solution
  • Details of technical & economic feasibility for CBG in segments where it is expected to be a solution
  • All India data on CBG plants

Optimal Capacity

Objective: Determining the optimal capacity for the CBG plant

Most CBG plants under the SATAT scheme are implemented for a 5 TPD of CBG production. 

However, our team will review all the other dimensions such as investments needed,  economic returns, feedstock availability and offtaker potential in order to determine the optimal capacity for the CBG plants.

Intelligence on End User Segments

Objective: Intelligence on end user segments for CBG, their profiles and the commercial aspects of CBG use by these segments.

Following inputs will be provided for the top 3 customer segments which are likely to be:

• Oil Marketing Companies (OMCs)
• Commercial segments such as hotels & restaurants, and
• Select industrial segments

Note: Inputs will be for CBG, but key inputs will also be provided for the liquid & solid digestate that can be used as fertilizers, and CO2 that gets released from the upgradation process.

For CBG

• Typical customer profiles from each segment - type of industry, size of business etc.
• Their current energy utilization - fuels used for prominent applications, key challenges and pain points for the current fuel use
• Current trends and future expected trends in CBG use in these segments
• Customer need assessment - understand the clear needs that the customers have for CBG, and the pain points that it can address.
• Other customer requirements for CBG - quantity required by different customer segments, safety requirements, standards & certifications needed, typical contractual expectations
• Key challenges with the off taker segment - this is a critical component, especially where oil marketing companies are the only or the dominant offtaker, because we have seen significant delays and postponements from the oil marketing companies on CBG offtake.
• Current commercials and related inputs - prices that can be sustained in the market, transportation & storage, sizes of units (cylinders, tanks…), types of purchaser contracts (period for contract, key contractual conditions), safety and other key requirements for distribution and use at customer site
• Approaches & strategies used by current CBG players in acquiring customers
• Typical transportation & logistics approaches that will be suitable for specific customer segments

For the by-products

For the solid & liquid digestate that can be used as fertilizer, and for CO2, the following details will be collected:

• Profiles of the prospective end user segments (more relevant for CO2)
• Monetization potential for CO2 and solid/liquid digestates - current price ranges being offered in the market, potential price ranges in future
• Government mandates, norms and standards driving the adoption of these by products from CBG production
• Challenges being faced by the current CBG producers in valorizing these by products

Feedstock

Objective: To provide intelligence on the following aspects for feedstock - types, characteristics, supply chain and commercials.

Feedstock comprises one of the most critical variables for a CBG project. We will undertake the following research:

• Types of feedstock that can be used in the digesters
• Amounts of feedstock that will be needed for specific yields of CBG (CBG yields can vary widely depending on feedstock - from 3 -6 tons of CBG/100 tons of feedstock)
• Challenges in feedstock characteristics - quality, calorific value, amount of segregation needed…
• Preliminary research on the types of feedstock available, and quantities available in regions in the vicinity of your preferred location
• Approximate prices for different types of feedstock - these can vary significantly depending on the type of feedstock, factors such as region of source, local practices, local transport costs etc., but we can provide first-level approximations for specific categories of feedstock.
• Study CBG plants in the vicinity to understand the feedstock they are using and their logistics and supply chain details.

Location

Objective: Arriving at the optimal location for implementing your CBG plant.

Location plays an important role in the success of CBG plants as location is a critical variable for feedstock availability.

If you do not have a preferred location for your plant, we can help you arrive at an optimal location.

Significant amount of brainstorming and analyses will be undertaken to identify the ideal location for the proposed plant. This will depend on:

• Feedstock availability in that city - this might have to consider availability of both organic waste (food, vegetable & cattle/poultry waste) & cellulosic feedstock (for eg., crop waste such as paddy straw).
• Policies & incentives of the corresponding state government
• Feasibility of offtake by OMCs
• Feasibility of offtake by industrial & commercial end users
• Proximity to our current operational facilities, if you are currently running a business

Key Drivers 

Objective: To provide insights on the key drivers with an emphasis on government policies, mandates & incentives.

• Central and state government mandates & incentives for CBG plants
• State government and city administration mandates for waste management - this can be done specific to the city / state chosen or shortlisted for the project
• Analyses of the effectiveness of the above schemes
• Decarbonization imperatives for relevant end-user segments
• Falling costs of CBG production
• Increasing efficiencies of CBG production (especially CO2 separation/upgradation from biogas to CBG)

Key Challenges & Constraints

Objective: Provide inputs on the key challenges with higher emphasis on challenges for feedstock, from offtakers and with policies

Key challenges for the following contexts will be analyzed:

• Feedstock availability, quality & prices - a significant emphasis will be applied on this, taking into account all the regional and local factors
• Logistics challenges - transport & storage. High focus will be on the cost challenges associated with logistics.
• O&M challenges - specifically with regard to pollution control and possible concerns to the local population from operating waste to energy plants
• Technology challenges - special emphasis will be on the technology used for cellulosic feedstock and the success / failure rates for these, the reasons behind the failures, and what measures are being undertaken to overcome the failures.
• Offtaker risks & challenges (already mentioned under End User Segment section)
• Policy & other government mandate risks - an example could be significant changes to the policy, be they in the form of timelines, commercials etc. Inputs will be provided on how the state and central government policies have been implemented and the challenges that have been observed so far.

Competition

Objective: Provide insights on current and future expected competition with an emphasis on shortlisted regions

Competition for CBG plants has grown significantly since the GoI came up with the SATAT scheme a few years back ( https://satat.co.in/satat/ ). While the scheme has proceeded much more slowly than anticipated, there has been high interest from investors to build CBG plants, all across India.

For a new entrant, such high competition could be welcome as it results in reduction of equipment costs, enhanced availability of solution providers & skilled manpower, and also better access to intelligence about CBG plants.

As the offtake potential for CBG is expected to be much higher than what the country produces today, diminished demand might not be a key challenge to a new entrant from competition.

The key challenge for a new entrant from increased competition will be diminished access to feedstock supply, given the nature of feedstock and related supply chains for CBG.

The above will be kept in mind while analysing the competition for CBG plants.

• Current competition - region-wise, genre-wise (independent CBG plants, company-based CBG plants, government-operated CBG plants etc), capacity-wise
• Future expected competition from other CBG producers - on the same parameters as for Current.
• Future competition from other low carbon fuels - here, specific inputs will be provided for competition from green hydrogen (more in the future, starting 2027) and liquid biofuels (competition both currently and in future)
• Feedstock expected to be used by competitors, and likely sources of feedstock
• Current end user segments for competitors

Real Life Case Studies

Objective: Enabling you to understand the real life challenges of operating CBG plants and key learnings from these

CBG is a fairly new sector in India.

The first step depends on anaerobic digestion based biogas generation, a business sector that has existed for many years. What is new is the additional stage where biogas is upgraded to CBG through the removal of CO2. 

The process of separating CO2 from biogas is predominantly an engineering (mechanical engineering) process, and thus we expect this to pose limited technology challenges (though there could be economic challenges).

Anaerobic digestion, on the other hand, is a microbial/biological process, and we have seen many challenges faced by biogas plants in our last 15 years of work in the climate tech sector, especially when businesses tried to scale such digesters from a few hundred kilograms feedstock to a few thousand.

Fortunately, we have some CBG plants already operational in India at a reasonable scale (100 TPD of feedstock), and we would like to do a real life evaluation of how these plants are doing currently. The following will be done: 

• A value chain flow analysis for a typical CBG plant (100 TPD feedstock, about 5 TPD of CBG), with inputs from operating plants
• Identifying key technical, operational or process challenges the currently operating plants are facing, and how they are planning/trying to overcome these.
• Key learnings from earlier failed CBG plants 

Differentiation

Objective: Enable you to get a deeper perspective on differentiation strategies that have the potential to enhance business success

What are the different aspects through which a Bio-CNG producer can differentiate the product? Through a mix of primary interactions with key stakeholders, research on how the competition is planning to differentiate, and also with internal brainstorming, we will arrive at effective avenues for differentiation, on the following dimensions - differentiation through

• Price

• Branding & positioning around key themes such as green

• Performance - on quality, safety etc

• Value addition - explore bundling approaches, annual maintenance contracts, superior service etc.
• Cross-selling & upselling - explore if there are other related sustainability products . solutions that can be provided to the same end user group

Partnership Possibilities

Objective: Provide an overview of the potential, relevant and feasible partnerships for critical dimensions of the CBG business, especially for feedstock.

While business partnerships can add value once a business is established, we are not sure if technology partnerships should be evaluated for a CBG business as it is driven mostly through the choice of the right technology vendor, rather than a partner.

As a result, technology partnerships will not be a priority section for the assignment.

However, we will provide perspectives, along with real life examples from other businesses in this domain, on what types of business partnerships could strengthen the business case for your business profile and aspirations. Examples could be:

• Partnerships with local municipal solid waste generators
• Partnerships with vegetable & fruit markets for sourcing waste
• Partnerships with feedstock aggregators such as biomass briquette makers and traders of loose biomass from crop residues. This will be relevant in the case where we are able to prove the viability of the use of cellulosic feedstock for CBG production.
• Explore partnerships with city administration to solve a pain point for the administration while benefiting from the assets & network that the administration can bring to the table

Technology

Objective: Provide intelligence on the technologies available for two key components of the CBG business - anaerobic digester and CO2 separation - and enable you to choose the optimal technology solution.

• Evaluation of different technologies and deciding on the optimal technology - CBG technologies can be broadly split into two: Anaerobic digester & Upgradation from biogas to CBG. We will provide detailed inputs on current and emerging solutions for both these components, and also, based on primary research, arrive at the optimal technology combination for you.
• CBG project implementation stages and timelines - a brief project timeline, from concept to commercialization, for CBG plants can be provided, with timelines for each of the stages, and also production steps
• Profile of CBG solution providers - most solution providers belong to the category of EPCs, but within this broad segment, different vendors provide different degrees of value. Some are vanilla EPC vendors, while others have developed some proprietary solutions (examples could be in terms of biomass processing, or digital solutions for monitoring & control, or energy efficient solutions for CO2 separation from biogas, etc), that they can integrate along with solutions from other vendors
• Factors to be considered while determining the right technology and plant size

Costs & Economics

Objective: Provide revenue, returns and cash flow estimates under different scenarios, taking into account all feasible revenue streams. 

A comprehensive financial model with the following incorporated: 

• Capex & Opex inputs - overall, and with break-ups
• Revenue stream estimates - overall and with break-ups. These will be provided for:
  • CBG
  • Digestates (fermented manure), and 
  • CO2 (if it is captured)
• P&L, balance sheet and cash flow estimates for 20 years (for multiple scenarios)
• Scenario analysis & sensitivity analyses based on changes to key variables - the risk analyses would thus be a part of this.