25 June 2010

The report, Rural Biomass Energy 2020 in the People's Republic of China, was prepared by the Asian Development Bank (ADB).

If livestock manure and crop stalks were converted into clean fuel, it could provide electricity to 30 million rural people in the PRC who are still dependent on kerosene lamps for lighting, and to millions who rely on firewood and other agricultural wastes to heat their homes and cook their meals.

“Biomass energy is a sensible renewable energy option for rural areas and it can be cost-effective at community and industrial scales if governments support and effectively guide its development,” explains Klaus Gerhaeusser of ADB.

Biomass also has “great potential to make a significant impact on two of the country's most pressing development challenges: rural poverty and environmental damage.”

Most biomass support would go to rural households

Of the US$60bn needed, 76% will be used to help rural household beneficiaries, 4% for centralised gas plant projects and 20% for power generation and liquid fuel production. An additional CNY1.5bn is needed for research, development, demonstration and piloting.

Government and project financing are the two main sources of funding. While government investment is necessary for projects directly related to farmers, private financing is critical for securing self-sustaining financing cycles and developing the biomass industry, it notes.

A broad partnership is needed to develop the biomass sector to become more sustainable and competitive. International financial institutions, including ADB, can become a catalyst in helping raise the necessary project financing.

Only 0.4% of PRC biomass used in renewable energy

Currently, most rural biomass energy comes from small-scale conversion projects. In 2005, 12% of animal waste from household farms was used for energy and only 0.5% of animal waste from industrial livestock farms, with 0.4% of the total amount of straw biomass used in renewable energy systems.

The PRC has set a goal for 2020 to produce energy from various waste-based sources, including biogas from animal farms, crop residues, agro-processing, municipal waste and sewage sludge. It has set a target of 15% of the country's energy consumption to come from renewable energy by 2020.

“The potential of biomass energy in the PRC is huge, but the barriers to realising this potential are likewise significant and complex,” adds Gerhaeusser.

Biomass energy is the least developed form of renewable energy in the country due to cost and technological constraints.

“The PRC Government is giving more attention to renewable energy sources in general - mainly wind, solar and hydro - but the value of biomass resources as an additional renewable energy source has been largely underestimated,” the report states.

“Government initiatives to address the urban-rural energy gap with biomass energy projects have been modestly successful at the household level.”

“Biomass energy is a sensible renewable energy option and it can be cost-effective if guided effectively by the government,” it explains.

“The key barriers preventing the full utilisation of rural biomass resources are comprehensive, ranging from financing, to operational factors, to environmental regulation.”

“Technologies that provide commercial biomass energy will only be successful if they are developed according to the proper industry scales, supply chains, and research and development needs,” it adds.

“Through this process, new enabling policies, coordinated institutional capacity, and effective investments made today mean PRC’s rural communities would enjoy cleaner energy, better environment, and higher rural income by 2020.”