The biogas market is changing, and this is affecting farmers across the country. Many have already invested, or are considering investing in biogas, either in the form of a larger plant in partnership with others for the production of upgraded compressed biogas (CBG), or as an individual on-farm plant for the production of electricity and, in some cases, heat. Regardless of the approach, there are challenges related to profitability, the market and logistics.
As the segments that have historically consumed CBG become increasingly electrified, demand is falling. At the same time, demand for liquid biogas (LBG) is growing.
In Habo, Biofrigas, together with Långhult Biogas, has demonstrated that it is now possible to produce liquid biogas locally, all the way from farm to tank.
Over the next four Tuesdays, we will highlight some of the most common challenges facing the agricultural sector and share our perspective. Join us in this series – from challenge to opportunity.
CHALLENGE:
For many biogas producers, the challenge lies not in producing gas, but in delivering it efficiently and receiving fair payment.
Compressed biogas (CBG) has a relatively low energy density, which means that more transport is required to deliver the same volume of energy; in other words, the transport cost per unit of energy becomes relatively high compared to the transport of liquid biogas (LBG).
In practice, this means that a significant portion of the value is lost in the logistics chain before the gas even reaches the customer. The result is a business where margins are squeezed, even though production itself is running smoothly.
BIOFRIGAS' PERSPECTIVE:
Liquefying biogas fundamentally changes the situation. Liquefied biogas (LBG) has a significantly higher energy density, making it possible to transport up to four times more energy per delivery.
This means fewer journeys, simpler logistics and lower costs. At the same time, it opens the door to markets where customers are willing to pay more, such as heavy haulage and industry.
The result is a more efficient business, where less value is lost in the logistics chain and more remains with the producer.
In short: from a business where logistics eat into margins, to one where logistics instead boost profitability.