As the world grapples with the urgent need to reduce greenhouse gas emissions and transition to sustainable energy sources, biomass briquettes have emerged as a viable alternative to traditional fossil fuels like Furnace Oil (FO), High-Speed Diesel (HSD), and Firewood. Biomass briquettes are produced from organic materials including agricultural waste, forestry residues, and industrial waste. They offer a cleaner, more sustainable option for industrial heating and energy generation.
The aim of blending biofuels with fossil fuels by 2030
In India, the continued and alarming use of non-renewable fuels such as FO, HSD, coal, and wood in industries has led to significant environmental and health concerns.
According to the Ministry of Environment, Forest and Climate Change, the industrial sector contributes to around 21% of India’s total carbon emissions, primarily due to the reliance on these fossil fuels. The Indian government has set ambitious targets to reduce carbon emissions by promoting the use of renewable energy sources, including biomass briquettes. The National Policy on Biofuels, 2018, aims to achieve a 20% blending of biofuels with fossil fuels by 2030, emphasizing the importance of biomass as a sustainable energy source.
Contribution of the industrial sector in carbon emissions
(1) Understanding Biomass Briquettes:
Biomass briquettes are a type of renewable fuel that can be used as a substitute for coal, FO, and HSD in various industrial applications.
They are typically made by compressing organic materials like agricultural waste (e.g., mustard husk, groundnut shells), forestry residues (e.g., wood chips), and industrial wastes (e.g., sawdust, shredded paper, etc), and other biomass sources into compact, solid form.
Composition and Production:
The production of biomass briquettes involves several steps, including drying, grinding, and compressing the raw biomass material. The result is a dense, energy-rich briquette that can be burned to produce heat and power.
Unlike fossil fuels, biomass briquettes are carbon-neutral because the carbon dioxide (CO2) they release during combustion is offset by the CO2 absorbed by the plants during their growth.
Comparison with Fossil Fuels: Compared to fossil fuels like FO and HSD, biomass briquettes offer several advantages.
Cost of per kg steam according to the fuel type
Switching to biomass briquettes often involves investing in a new biomass boiler, which is designed to efficiently burn biomass fuels and generate heat or electricity. The cost analysis of adopting a new biomass boiler includes several factors:
3.1 Initial Investment:
The initial investment for a biomass boiler includes:
- Boiler Cost: The cost of the biomass boiler itself varies depending on its capacity, type (e.g., grate stoker, fluidized bed), and efficiency rating. Typically, biomass boilers can range from INR 1 crore to INR 8 crore or more for industries requiring boilers.
- Installation Costs: Installation costs cover the expenses associated with site preparation, piping, electrical connections, and integration with existing heating systems. These costs can add 10-15% to the boiler’s base price.
- Retrofitting Requirements: In some cases, retrofitting existing infrastructure to accommodate a biomass boiler may be necessary, which can increase initial costs but is often offset by long-term savings.
3.2 Operating Costs:
Once installed, the ongoing operating costs of a biomass boiler include:
- Fuel Costs: Steam generation from Biomass briquettes typically costs between INR 1.75-INR 1.90 per kg of steam as compared to INR 4.5-5.5 per kg of FO/HSD and INR 2.50-3.00 if compared to firewood. The lower cost of biomass briquettes can result in substantial savings over the boiler’s operational lifetime.
- Maintenance Costs: Biomass boilers require regular maintenance to ensure efficient operation and longevity. This includes cleaning boiler tubes, APCDs, and combustion residues, inspection of mechanical components, and occasional repairs. Annual maintenance costs can vary but are generally lower than those for fossil fuel boilers due to fewer combustion-related issues.
- Labour Costs: Labor costs associated with handling biomass fuel, ash removal, and boiler maintenance are easily manageable and the total cost of operating a biomass boiler is still much lower than that of FO, HSD, or Firewood.
3.3 Financial Incentives:
Several financial incentives can offset the initial investment and operating costs of adopting biomass boilers:
- Government Subsidies: Many governments offer subsidies or grants to encourage the adoption of renewable energy technologies, including biomass boilers. These subsidies can significantly reduce the upfront cost burden for businesses.
- Tax Incentives: Tax incentives, such as accelerated depreciation or tax credits for renewable energy investments, can provide additional financial benefits over the operational life of the biomass boiler.
- Low-interest Loans: Financial institutions may offer low-interest loans or financing options tailored to renewable energy projects, making it easier for businesses to finance the purchase and installation of biomass boilers.
- High return on Investment- Industries having a steam consumption of 30 TPD or more can cover the cost of Biomass Boilers in less than 2 years and generate savings further every year.
4. Return on Investment (ROI): Switching to biomass briquettes involves a significant investment in infrastructure but offers compelling returns over time. Understanding the return on investment (ROI) is crucial for businesses evaluating this transition.
4.1 Calculating ROI:
ROI is calculated using the formula:
Where:
– Net Profit from Investment includes savings from reduced fuel costs, maintenance expenses, and potential operational efficiencies gained.
– The cost of Investment comprises the initial expenditure on biomass boiler installation, retrofitting, and other associated costs.
Example Case Study: Detailed Calculation of ROI
Here is a case study of a Pharmaceutical business in Baddi, Himachal Pradesh, previously using FO and HSD for its steam generation, with a steam consumption of around 30,000 KGs per day. They decide to invest INR 500 lakhs in a new biomass boiler.
| Particulars | Cost |
| The existing Daily cost of Furnace Oil (with steam to fuel ratio of 10:1) at INR 45/KG | INR 1,35,000/day |
| Cost with Biomass Briquettes (with a steam-to-fuel ratio of 4.5:1) at INR 7.50/KG | INR 50,000/day |
| Cost of Manpower and Ash Handling per day (Negating cost of Boiler Operators since that is common for all boilers) | INR 8500/day |
| Total Cost of Biomass Boiler | INR INR 58,500/day |
| Daily Savings | INR 76,500/day |
| Annual Savings (@330 days per annum), considering maintenance, cleaning, and annual passing | INR 2,52,45,000 |
| Investment in a New boiler | INR 5,00,00.000 |
| Payback Period | ~2 years |
4.2 Payback Period:
The payback period represents the time required for the cumulative savings to equal the initial investment. Several factors influence this period, including scale of operations, fuel price fluctuations, and operational efficiency gains.
Estimation of Payback Period: ~ 02 years for the hypothetical business above, with annual savings of INR 2.52 crores and an initial investment of INR 5 crores:
Factors Influencing Payback Period:
- Scale of Operations: Larger energy consumers may achieve faster payback due to higher fuel savings.
- Fuel Price Fluctuations: Stability in biomass briquette prices versus volatility in fossil fuel costs can impact the payback period.
- Operational Efficiency Gains: Improved efficiency in biomass boiler operations can accelerate payback through reduced operational costs.
(5) Emissions Reduction:
Switching to biomass briquettes significantly reduces emissions compared to fossil fuels, contributing to environmental sustainability goals.
On-ground report:
Large industries have traditionally relied on expensive and highly polluting fuels such as Furnace Oil (FO), High-Speed Diesel (HSD), and coal, while smaller industries depended on firewood. The latter contributes significantly to deforestation and soil degradation due to repeated harvesting cycles. Simultaneously, farmers resort to burning agricultural waste like rice straw, mustard husk, and cotton stalks to clear their fields for the next planting season, further exacerbating emissions.
Introducing biomass briquettes presents a multifaceted solution: it reduces industrial emissions by replacing more polluting fuels and decreases agricultural emissions by repurposing farm waste into a valuable, sustainable fuel.
5.1 Quantifying Emissions Reduction:
Biomass briquettes emit substantially lower levels of pollutants compared to FO and HSD. Comparative analysis of emissions includes:
- CO2: Biomass briquettes are carbon-neutral over their lifecycle, with CO2 emissions balanced by carbon sequestration during biomass growth.
- SOx and NOx: Biomass combustion emits lower levels of sulfur oxides (SOx) and nitrogen oxides (NOx) compared to fossil fuels, reducing air pollution and acid rain risks.
- Particulate Matter: Biomass briquettes produce fewer particulate emissions, improving local air quality and reducing health risks.
5.2 Impact on Carbon Footprint:
Calculating the reduction in carbon footprint involves:
- Quantitative Analysis: Assessing the total emissions avoided by substituting FO and HSD with biomass briquettes over the operational life of the boiler.
- Long-term Impact: Long-term environmental benefits contribute to corporate sustainability strategies and support global climate action goals, such as reducing greenhouse gas emissions under the Paris Agreement.
Conclusion
The adoption of biomass briquettes offers not only economic advantages through ROI and payback period efficiencies but also significant environmental benefits by reducing emissions and carbon footprint. By leveraging financial incentives and showcasing real-world case studies, businesses can strategically transition to sustainable energy solutions while enhancing operational resilience and corporate responsibility.
For over a decade, Universal Fuel Industries has been a leading manufacturer of biomass briquettes, supplying environmentally friendly and cost-effective fuel to renowned industries worldwide. Additionally, we are an emerging provider of Boiler O&M services. Our mission is not only to cater to the fuel needs of industries but also to ensure that our farmers earn consistently throughout the year, not just during harvest season.
For the current financial year, our key goals include:
- Expanding to the South and Western markets to increase our regional presence and impact.
- Increasing our processing capacity by 25% to handle more agricultural waste and produce more fuel.
- Adding other farm wastes like Parali, Cotton Stalk, and Bagasse to our processing portfolio, further diversifies our sustainable fuel production capabilities.
- Next year is going to be bigger and better, as we aim to achieve these ambitious targets and continue our growth in the sustainable energy sector.
Author:
Mr Kaoustubh Kathuria
Co-Founder
Universal Fuel Industries
