Author: Mr Ashwin Save
Co-Founder and Chief Operating Officer
BiofuelCircle Private Limited
Sustainability has long moved from being a buzzword to an integral way of doing business. Business organisations and countries have committed to reducing their carbon footprint at an aggressive pace. And using coal to fire a boiler will increasingly become unviable from an environmental, compliance and financial perspective. Biomass briquettes and pellets are replacing coal as the fuel of choice.
Process & space heating boilers operators were amongst the first to make this transition. With the Government of India mandating thermal power plants to replace 5% coal with biomass pellets from October 2022, even smaller, captive power boilers will have to follow suit. The target for co-firing will be increasingly scaled up in the years to come.
But what has prevented this move to greener fuels from happening sooner? India generates around 700 million MT of agricultural residue (biomass) every year. And yet 235 million MT from this is wasted every year, mostly through burning or decomposition. Converting just this wasted quantity to biofuel will meet 17% of India’s annual energy needs. There isn’t adequate incentive for farmers to avoid burning crop residue, and small, spread-out farm holdings make aggregation difficult. The seasonal nature of biomass availability requires processors to hold inventories and makes supplies unpredictable. And without direct access to industrial buyers, rural suppliers continue to depend on intermediaries. This sector has hence remained unorganised, with small players who find it difficult to scale up.
BiofuelCircle is working to solve these challenges, through a digital platform for green fuels. It has three offerings, accessible through the web or a mobile app:
- myBiofuelCircle: a free community portal for the bioenergy community that allows participants to network, share & learn from others
- BiofuelCircle Market: for buying & selling biomass, biofuels, and bio-fertilizers
- BiofuelCircle Network: of service providers for quality assurance, logistics and financial services for biomass & biofuels
The BiofuelCircle digital marketplace allows buyers and sellers to connect without the burden of physical distance. A profile page on myBiofuelCircle enables a web presence for small and unorganised businesses, allowing them to promote themselves in the community. For organised buyers, the platform offers a means to digitalise their vendor evaluation and development processes. The actual deal-making process uses the principle of anonymous trading, where decisions allow for democratic participation. Larger enterprise buyers can also use e-procurement tools such as auctions, reverse auctions, and conventional RFP-driven B2B purchase processes. Buyers and sellers have access to the quality, delivery, and commercial rating of counterparties before they complete a transaction, thus providing for transparent and informed decision-making.
The BiofuelCircle ecosystem also includes quality laboratories, storage partners, transport service providers, and finance partners, going beyond just a digital platform.
Detailed supplier profiling and verification through independent, qualified, industrial assessors provide enterprises, and buyers, with the comfort of dealing with certified suppliers who have adequate infrastructure, raw material linkages, HSE & quality practices. Sellers can get their briquettes/pellets tested by independent laboratories, and sample data from buyers is also captured on the platform – thus building a quality profile for sellers. Buyers and sellers have access to the quality, delivery, and commercial rating of counterparties before they complete a transaction. The BiofuelCircle participant rating is unique in that it combines platform behaviour such as honouring deals, on-time in-full deliveries, payment track record, and buyer/seller feedback to assess each other without knowing who the other party is. A multi-variate match-making logic identifies & recommends the closest candidate bids/offers to help buyers & sellers conclude deals.
Participants have the choice of using logistics provided by the platform. Delivery services are managed through transport partners, who also use the same BiofuelCircle web & mobile apps. Through a network of storage partners, the platform can offer alternative delivery arrangements, should a supplier yet fail to perform under the contract. Thus, providing industrial buyers with an option to secure their fuel supplies.
All transaction-related documentation is completely digitalized, making it easy for participants to manage operations. Tracking and tracing deliveries followed by digital payment services allow for a unique transaction experience. As sellers route their transactions – both purchases & sales, through the platform, a digital track record gets built, which in turn helps them get easier access to finance directly from the platform. Better credit for suppliers can translate into competitive prices for buyers of biofuels.
BiofuelCircle operates through multiple local biomass markets, called circles. Each circle is about 100km in radius, with very high biomass density and industrial clusters that need biofuels like briquettes, pellets, biodiesel, and biogas. Each such operating circle gets its BiofuelCircle ecosystem to create a self-sustaining market, though buyers and sellers can also deal across circles. The idea is to promote local utilisation of biomass, thereby retaining the sustainable nature of biofuels, and yet providing buyers and sellers with an expanded choice of doing business. Through partnerships with Farmer Producer Organisations (FPOs), BiofuelCircle is increasing awareness amongst farmers towards the ills of burning biomass and presenting opportunities to augment their income by instead aggregating agricultural residues. Biomass processing can create rural enterprises, thus providing employment opportunities in villages.
BiofuelCircle is creating a modern trading market, along with a socially and environmentally impactful business model.