www.ijesci.

orgInternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013

CooperationChallengesofDeveloping
CentralizedBiogasPlantinChina
AMaterialFlowManagementApproach
Dr.HongyanLu
DepartmentofEnvironmentalScienceandEngineering,SustainabilityResearchandEducationCenter
SichuanUniversityWangjiangRoadNo.29610065Chengdu,China
Email:redbird66@gmail.com

Dr.JiongYan*(correspondingauthor)
DepartmentofEnvironmentalScienceandEngineering,SustainabilityResearchandEducationCenter
SichuanUniversityWangjiangRoadNo.29610065Chengdu,China
Email:yanjiong99@gmail.com

Dr.BingXue
InstituteofAppliedEcology,ChinaAcademyofSciences
Xuebing.China@yahoo.com.cn

Prof.Dr.PeterHeck
InstituteforAppliedMaterialFlowManagement
UniversityofAppliedSciencesTrier,Germany
p.heck@umweltcampus.de
Abstract
Biogas industry has been undergoing a rapid growth in
China for the sake of generating renewable energy and
protecting environment and climate in China. But the
development of centralized biogas plants is still in the very
beginning phase and little experience is gained regarding
opportunities and challenges for realizing the centralised
biogas plants in China. The study applies stakeholder
oriented material flow management methods to analyze a
pioneering centralised biogas plant in Yangling. It can be
shown that the centralised biogas plant will have a good
contribution to production of renewable energy, protection
oflocalenvironmentandglobalclimateaswellasrecycling
of manures slurry. The obstacles for realization of the CBP
Yangling mainly concentrate on stakeholder cooperation
challenges.Onechallengeexistsbetweenthelivestockfarms
andtheinvestmentcompanyofthecentralisedbiogasplant
in Yangling and another one is between the investment
companyofthecentralisedbiogasplantinYanglingandthe
German biogas technology company. Further analysis
demonstrates that the direct stakeholder cooperation
challengesinmaterialflowsystemaremainlyaffectedbythe
lack of coordination among the indirect stakeholders
national and local governments, who regulate the relevant
policies and actions. Therefore, current policies, such as
biogas plant subsidy policies and environmental protection

60

enforcements, need to be improved to better cultivate

developmentofthebiogasindustry.
Keywords
Centralized Biogas Plant; Stakeholder; Intensive Livestock Farm;
MaterialFlowManagement;LargeandMiddleSizeBiogasPlant

Introduction
Biogas industry development in China has featured
with household biogas and middle and largescale
biogasprojectsoverthepastsixtyyears.Development
of household biogas digesters started in the 1950s in
rural China [Li and Xue 2010]. It aimed at protecting
ruralsanitation,cleanenergyforcookingandnutrient
cycling for vegetable and fruit farms. In addition to
household biogas digesters, large and mediumscale
biogas projects (LMBP) have also been increased
quickly over the past 10 years, as the results of rapid
growth of intensive livestock farming in China. The
rapid growth of LMBP is mainly driven by
government capital input and pollution control
requirements for livestock farms. According to the
biogas project standards issued by China Ministry of
Agriculture, largescale biogas projects refer to those
for which the net volume of digesters is upwards

InternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013www.ijesci.org

1000m3, while the net volume of mediumscale

projects is 1001000 m3 [CMA 2008]. During the 11th
Five Year Development Plan (20062010), China
Ministry of Agriculture (CMA) has supported about
23 million new household biogas digesters and 4,000
newLMBP[CMA2007].16billionYuan(~1.85billion)
has been invested by the ministry to support LMBP
andhouseholdbiogasduring2006to2009[Hao2010].
The capital input from the government covered more
than50%ofthetotalconstructioninvestmentofLMBP
[CMA2009].
Suchadevelopmentmodeldrivenbythegovernment,
though successfully promotes establishment and
expansion of LMBP, it also brings forth challenges in
operation and market phases, such as low gas
productivity, inefficient use of clean energy and poor
profitability. In China, 500KW installed electricity
capacity is the minimum requirement by the grid
companiestoletbiogasproduceelectricityconnected
to the grid [ADB 2009]. LMBP is the typical
decentralized biogas project model which is owned
and operated by the livestock farm itself and only
treats organic residues from own farm. Due to the
relatively small sizes of LMBP, the quantity of biogas
produced by LMBP does not meet the required scale
of 500KW installed electricity capacity. For most
LMBP, the incomes from selling the biogas or biogas
convertedenergyareverylimited.Sotheefficiencyof
biogas yields has no strong influence on the
profitability of an LMBP. As a result, reduction of
investmentandsavingofoperatingcostsbecomemore
importantforthedeveloperofanLMBP,whichinturn
worsens the efficiency and profitability of the LMBP.
By the end of 2007, a survey of 172 LMBP in Fujian
province,asoutheastChinaregiondemonstratedthat
about81%oftheprojectsonlyusedlowerthan30%of
the produced biogas and most of biogas was emitted
into air. LMBP often stop operation to save cost [Xu
et.al.2010].
To tackle the drawbacks of LMBP, centralized biogas
plant (CBP) is considered as an alternative. In
European countries such as Denmark and Germany,
the centralized biogas plants have been developed
since 1980s and proved to be economically viable
[Kurt2002,Weiland2003].Theyhavejuststartedtobe
constructed in China in the past few years. One
advantageofdevelopingCBPinChinaisthatthescale
ofaCBPatleastreachestheminimumrequirementfor
sellingelectricitytothegrid.Inaddition,CBPhastwo
important features different from an LMBP. The first
feature is on the input side. It codigests mainly

manure from different livestock farms, together with

otherorganicwastefromhouseholdsandfoodmarket,
kitchen waste of restaurants and organic residues of
foodprocessingenterprises.CBPneedstoorganizeor
buy substrates from other suppliers. The second
feature relates to its production. CBP has higher gas
productivitythanLMBPanditsproductsincludegrid
connected electricity or biomethane extracted from
biogas, heat from cogeneration, and organic fertilizer
from digester. The greater energy efficiency and
variety of products provides CBP a more stable
profitability.
CBP faces challenges as well because they requires
higher investment, more advanced technology and
more complicated stakeholder cooperation than
LMBPs. This article aims to analyze the stakeholder
cooperation challenges for establishing centralized
biogasplantsusingacasestudyinYangling,Shaanxi
Province,China.Analysisofthepotentialproblemsas
well as reasons, policy impacts, and suggestions
regarding the existing cooperation challenges along
thevalueaddedchainofbuildingaCBPinYanglingis
discussed.
Methodology
MaterialFlowManagement
The methodology applied in our study combines
material flow management (MFM) with a structural
selection of relevant stakeholders. MFM has become
anincreasinglyusefultoolforoptimizingmaterialand
energy flows at a company/region/nation level
[Ackerman 2005, Binder et.al. 2004, Lang et.al. 2006,
Kytzia et.al. 2004, Wagner and Enzler 2006]. It was
defined by the EnqueteCommission of the German
Bundestag as management of material flows by the
involved stakeholders refers to the objectiveoriented,
responsible, integrated and efficient controlling of
materialsystems,withtheobjectivesarisingfromboth
the economic and ecological sector and with the
inclusionofsocialaspects[EKSMUDB1992].MFM
aims to make responsible, integrated and efficient
influence on material flow systems towards the
optimization of the economic, ecological and social
aspects of the material flow system. But stakeholder
cooperationisoftenthechallengeforMFMduetothe
complexity of stakeholders constraint, motivation,
expertise and power. Stakeholder analysis and
involvement are therefore integrated into the key
proceduresofMFM(Fig.1).

61

www.ijesci.orgInternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013

FIG.1MAINWORKINGPROCEDURESOFMATERIALFLOWMANAGEMENTINYANGLING

In our study, the stakeholders involved into material

flowmanagementareexaminedanddividedintotwo
categories[WagnerandEnzler2006]:
Direct material flow stakeholders refer to those who
directly manage the material flows and/or have a
directinfluenceonthematerialflows.
Indirect material flow stakeholders have only
indirectly impacts on the material flows by, e.g.,
setting up the general framework conditions for the
respective valueadded chain [Wagner and Enzler
2006].
Fig. 1 demonstrates 8 major working procedures of
MFM in Yangling. In the first procedure (P1), the
valueadded chain of CBP in Yangling is defined as
thesystemboundaryofMFM.ThegoalofMFMisto
optimizematerialflowsandstakeholderscooperation
of Yangling CBP. Five different questionnaires are
designedbasedonMFMprinciplestocollectmaterial
flows information about livestock farms, vegetable
farms, fertilizer companies, local Environment and
Sanitation Bureau and landfill administration (P2).
Data collection process will be explained in details in
section2.3(P3).Basedonthefirstrounddataanalysis,
present material flow of Yangling organic residues
and relevant stakeholders are analyzed (P4). The
secondround data collection is conducted based on
theanalysisresults(P3,P4).Thestrategyofoptimizing
the present material flow and the pilot project to
establish CBP is designed (P5). Biogas project
technology and cooperative partners are identified
basedonCBPstrategy(P6).Economic,ecologicaland
social impacts and outputs of the CBP are analyzed
(P7). Stakeholder meetings are held to evaluate and
negotiatethedevelopmentandimplementationsofthe
pilotproject(P8).Furthermodificationsaremadewith
the inputs of stakeholders. At each procedures of
MFM, opportunities and challenges of stakeholder
cooperationareexamined.
StudyArea

62

Yangling
Agricultural
Hitech
Industries
DemonstrationZoneislocatedinmidChina,Shangxi
province, China. It comprises an area of 94 km2,
160,000residentsandabout95%ofthepopulationare
farmers[YLRG2010].Livestockbreedingandfarming,
andhightechagriculturearetheleadingindustriesin
theregion.
Yanglingisselectedasthestudyareaforthreereasons.
Firstly,Yanglinghasgreatpotentialtodevelopbiogas
project.In2008,livestockfarminginYanglingreached
a scale of 9, 072 cattle, 17,643 pigs, 3,416 sheep and
350,000poultry.Nonebiogasprojectwasdevelopedto
treatlivestockfarmmanureyet.Secondly,Yanglingis
the
only
hightech
agricultural
industries
demonstration zone in China for research and
promoting hightechnologies in the agricultural field.
Yangling government has strong interests to promote
biogas project in Yangling for a circular agricultural
economy. Third, a Chinese company intended to
invest a CBP in Yangling. Therefore, MFM data and
stakeholders information are collected based on the
realbusinesspreparationandnegotiationinsteadofa
theoreticalcircumstance.
DataCollection
From April to June 2008, a full sample investigation
regarding material flows was carried out.
Questionnaires of material flow analysis were
collected from all farms within 12 km of the planned
biogasplant,including29livestockfarms,8vegetables
farms and 1 fertilizer company. In addition, Yangling
Environment and Sanitation Bureau and Yangling
LandfillManagementCenterwerealsointerviewed.In
May 2008, further onsite visits and interviews were
made to 5 livestock farms, 2 vegetable farms, 3
fertilizer companies, 2 schools, 1 residential
community management center, Yangling Landfill,
Yangling Environmental Bureau, Yangling Waste
Management Bureau, Yangling Agricultural Bureau,
Yangling Sanitation Bureau and Yangling

InternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013www.ijesci.org

Development and Reform Bureau. Data from

questionnaire survey were further confirmed during
thesitevisitsandinterviews.Accordingtotheresults
of material flow analysis in Yangling, a German
company provided a technical design of the CBP in
YanglingundertheinvestmentrequestoftheChinese
company. The technical design was finished in 2008
andthebusinesscontractforknowhowtransferfrom
the German company and the Chinese company was
negotiated.
In May 2008, October 2009 and May 2010 three
stakeholder meetings were organized for CBP
cooperation. Participants include potential investor,
localfertilizercompany,localgovernmentauthorities,
grid company, owners of livestock farms and
vegetablefarms.
Result and Discussion
MaterialFlowAnalysisoftheCBPinYangling
The CBP Yangling was designed to locate in Dazhai
County, nearby 21 livestock farms, the middle school
and elemental school of Dazhai County. The CBP
Yanglingwillhavetheinstalledelectricitycapacityof
1 MW. Material flow system of the CBP Yangling
includes three parts as shown in Fig. 2. Part I is the
process of collecting cosubstrate. Part II is anaerobic
digestion, combined heat and power generation and
the digestate processing. Part III is utilization of
products.
As presented in Part I, input materials are from 21
livestock farms, including 16 cow farms, 4 pig farms
and 1 sheep farm. The total manure is 45,444 ton per
yearwith25.5%ofdrymatter,ofwhich43,161tonsare
cattlemanures,1,188tonspigmanuresand1,095tons
sheep manures. Around 95% of the inputs are cattle

manures.Amongthe21livestockfarms,12arelocated
within 5km from the planned Yangling CBP, 7 are
within10kmand2are11.1kmaway.Roadconditions
among the farms are convenient for transportation
(asphaltorconcretepavement).
Part II is the technical core of the Yangling CBP. It
turns manures into biogas and organic fertilizer.
Furthermore, it converts biogas into electricity and
heat. A Germany company was invited to make the
technical design of Part II. The total investment is
estimated2.3millionEUR(basedonEuropeanprice).
At Yangling CBP, one anaerobic digester (AD) is
designed with the net volume of 3200 m3 (diameter
27meter, height 6 meter). Biogas output is calculated
about4millionNm3(55%CH4).Biogaswillbecleaned
andstoredinabiogasholderof500m3.Combinedheat
andpowerunitoftheCBPYanglingwillexpectupto
a 40% of electricity converting efficiency and 42% of
heat recovery efficiency. The theoretical output of
electricity is 8,932,305 kWh/a, and the heat output is
9,378,919kWh/a.Theinstalledcapacityis1.02MWof
electricity and 1.07 MW of heat. The electricity
demand of operating the CBP Yangling will be about
6%ofthetotalgeneratedelectricityandheatdemand
is about 10% of the total produced heat. At Part II,
besides biogas generation, the anaerobic digesting
process will also produce digested residues, called
digestate.Digestatecouldbeusedasorganicfertilizer.
Thenutrientcontentofdigestateisestimatedabout2.4
kg/m3NH4N.TheCBPYanglingwillproduce50,252
t/a(15.2%DM)digestate.Afterthedewateringprocess,
digestate is separated into solid and liquid parts,
which is 21,666 tons solid digestate (30% DM) and
28,586tonsliquiddigestate(4%DM).Amongthetotal
liquid digestate, 10,000 t/a will be circulated into the
anaerobicdigestionprocess.

FIG.2MATERIALFLOWSYSTEMOFTHECENTRALIZEDBIOGASPLANT(CBP)INYANGLING

63

www.ijesci.orgInternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013

Part III is the economic and ecological core of the

material flow system for Yangling CBP. Five types of
productswillbegeneratedaccordingtothedesignof
the Yangling CBP. Electricity is planned to be sold to
theelectricitygridaccordingtorenewableenergylaw
ofChina.HeatwillbesoldtoDazhaielementaryand
middleschools,aswellasthesurroundinghouseholds.
The solid organic fertilizer would be sold to a local
organic fertilizer company. The liquid organic
fertilizer would be delivered to local fruits and
vegetables farms by the same organic fertilizer
company. For the CBP Yangling project, the total
amount of greenhouse gas emission reduction will be
10,772tCO2eq,calculatedbytheCleanDevelopment
Mechanism(CDM)methodologyACM0010.
OverviewofStakeholderCooperationRelationships
oftheYanglingCBP
Designingandcalculatingthematerialflowsystemfor
the CBP Yangling only demonstrate economic and
ecologicalfeasibilityoftheYanglingCBP.Whetherthe
CBP can be realized and operated with sustainability
or not, to a great degree, depends on the stakeholder
cooperationalongthematerialflowsthroughPartI,II
and III. By examining the material flows of the
YanglingCBP,7stakeholdercooperationrelationships
are identified and demonstrated in Fig. 3. The direct
cooperationisexpectedamong:

Relationship 1: 21 livestock farms and the

manurecollector

Relationship 2: manure collector and CBP

investors

Relationship 3: CBP investors and CBP

engineeringcompany

Relationship 4: investors and electricity grid

operator

Relationship5:investorsandheatcustomers

Relationship6:investorsandorganicfertilizer
company

Relationship7:organicfertilizercompanyand
fertilizercustomers

Among the 7 stakeholder cooperation relationships,

relationships 4, 5, 6 and 7 are in good conditions to
reach the final cooperation. For relationship 4,
Northwest Grid Power Company declared to accept
electricity produced by renewable energy projects
with the installed electricity capacity above the
minimumlevelof500KW,whichwillapplytotheCBP
Yangling too. According to the Chinas Renewable
Energy Law, the electricity tariff is 0.6 RMB/kWh (~
0.07/kWh).Forrelationship5,heatwillbesuppliedto
the schools and households through the local heat
supply company. The heat company is one of the
branch companies of the investor company. The
foreseeable cooperation and business complement
between the CBP Yangling and the heat company is
one reason why the investor company started
Yangling CBP. For relationship 6, a local fertilizer
company in Yangling has basically agreed to buy the
solid digestate and distribute the liquid digestate
producedbytheYanglingCBP,becausethecompany
has being expanded production capacity and willuse
the solid digestate as raw material. The solid organic
fertilizerwillbepaidinthepriceof600RMB/ton.Eight
vegetable and fruit farms in Yangling would like to
use liquid digestate as fertilizer. But they would not
like to pay for liquid digestate but only covering
transportationcost.

FIG.3STAKEHOLDERCOOPERATIONRELATIONSHIPOFYANGLINGCBP

64

InternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013www.ijesci.org

Asforrelationships1,2and3,cooperationagreements
are not reached yet among the stakeholders. These
relationships contain the biggest challenges for
realizing Yangling CBP. Section 3.3 gives an indepth
analysisofthecooperationchallenges.
Except for these stakeholders who are directly
involved into material flows from part I to part III,
therearealsoindirectstakeholdersoutsideoftheCBP
Yangling material flow system, which includes
Ministry of Agriculture, Ministry of Environmental
Protection and National Development & Reform
Commission,provincialandlocalagriculturalbureaus,
environmental protection bureaus, and development
and reform commissions. Cooperation relationships 1
to 7 are significantly shaped and influenced by the
policies,regulationsandactionsimplementedbythese
nationalandlocalgovernments.Section3.4willfocus
ontheimpactsofthepoliciesandregulations.
CooperationChallengesoftheCBPYanglingamong
DirectStakeholders
1) Cooperation Challenges of Manure Collection and
Supply
As shown in Fig. 3, relationship 1 is to develop
cooperation for collecting manures, while
relationship2linkspartIandIItosupplymanure
slurry to Yangling CBP. During interviews and
stakeholder meetings, two major challenges
emerge, which hinders establishment of manure
slurrycollectionandsupplysystemfortheproject.
The first challenge is the potential price increase
risk of buying manure slurry. At present, part of
the cattle manure could be sold directly to farms
nearby as the fertilizer in the price of 35RMB/ton
(~4/ton); the pig manure 20RMB/ton (~2.3/ton)
and the sheep manure 100RMB/ton (~11.6/ton).
The investor company offers same prices for
buying all generated manure slurry from the 21
livestockfarms.Butthecompanyconcernsthatthe
price of manure slurry from the farms will be
continually increased once the CBP is established,
because the project will rely on manure slurry
supply from the farms as the main input raw
material. Many biogas project for crop straws in
China experienced similar challenges that local
farmers raised straw price constantly, which even
resultedinstoppingoperationoftheprojectdueto
theshortageoftheinputstraws[Chenet.al.2010].
The second cooperation challenge is related to the
firstchallenge.Itisaboutmanagementstructureof

organizing manure slurry to Yangling CBP. In

order to get the manure supply in a stable price
and suitable collecting process for prevention of
animaldiseasespreading,theinvestorcompanyof
the CBP Yangling asked the local government to
take part in the raw material collection and
transportation. One proposal is that the local
government shall set up a public company to be
responsible for delivering manure slurry to the
CBP Yangling with an agreed price for certain
amount of quantity and quality of manure slurry.
The biogas company would directly buy the
manure from the government organized company
instead of dealing with 21 livestock farms
respectively.Analternativesolutionwasthatlocal
governmentandthebiogascompanycoorganized
a company which would be in charge of manure
collectionandtransportation.
2) Cooperation Challenge of International Technology
Transfer
For realizing the Yangling CBP, another crucial
cooperation challenge is the cooperation model
between a German company and the investors of
CBPYangling,identifiedasrelationship3atFig.3.
TheCBPYanglinginvestorcompanypreferstouse
German technology for the engineering design of
the Yangling CBP, because the German company
has demonstrated the efficiency of its anaerobic
digesterandtherichexperiencesofdesigningand
operating CBP. According to the engineering
design of the German company for the Yangling
CBP, the organic load of the anaerobic digester
could be as high as 8.1kg organic dry matter per
cubic meter per day. It is about twice higher than
the average value achieved by Chinese biogas
companies.
The key challenge of the business negotiation
focusesontheprotectionoftheintelligentproperty.
Two different cooperation models were presented
byChinaandGermancompanies.Establishmentof
a new SinoGerman jointventure was discussed
and was given up due to the organization
complications. Chinese investor of the CBP
Yangling proposed to pay for the engineering
service to the Germany Company based on each
project conditions. Such projectbased cooperation
model is commonly used by many biogas
companies in Europe. But the German company
didnt want to deliver its engineering service on
projectbasedmodelinChina.Instead,theGerman
companyofferedtosellitstechnologylicensetothe

65

www.ijesci.orgInternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013

Chinese company. Technology license cooperation

modelmeansChineseinvestoroftheCBPYangling
will pay the German company certain percentage
of total investment for a fixed amount of CBP
projectsincertainperiodoftime.
The reason that Chinese investor of the CBP
Yangling choose projectbased cooperation model
is because CBP projects in China are still in the
beginning phase. Complexities and challenges to
optimizethematerialflowsforCBPprojectsmake
it difficult to anticipate how many new CBP
projectscouldbeestablishedwithinafixedperiod
of time. Therefore, technology license cooperation
modelcontainshigheconomicrisksfortheinvestor
ofCBPYangling.
The German company prefers to cooperate in the
technologylicensemodelforthesakeofintelligent
property protection. With transferring technology
knowhow in a projectbased model, the company
is concerned of losing their intelligent property in
Chinamarket.
CooperationChallengesamongDirectStakeholders
ImpactedbyPoliciesandRegulationsofIndirect
Stakeholders
1) Challenges Caused by the Enforcement of
EnvironmentalProtectionPoliciesandRegulations
The regulations issued by national and local
environmental protection bureaus, play a key role
inshapingthecooperationwillingnessbetweenthe
livestockfarmsandtheinvestorsofYanglingCBP.
Currently,thelivestockfarmsinYanglingpaylittle
for storing/dumping manure slurry in the open
space, despite serious environmental pollutions
caused by the manure slurry. That is why the
investorcompanyconcernsthatthelivestockfarms
mayincreasemanurepricecontinually,becausethe
farms have no economic cost if not treating the
manure slurry. Two reasons contribute to the
situation. Firstly, although there are 7 laws to
regulate pollution emissions from the livestock
farms [CMEP 2010], however, the laws on
water/air/environmental pollution control have no
clear standards regulating livestock farm waste
dump and runoff. Secondly, challenges in
enforcing existing regulations in rural areas are
beyondthecapacityoftheenvironmentalbureau.
Starting on July 1st, 2010, the implemental
standards, Farmland environmental quality
evaluation standards for livestock and poultry

66

production just enters into force [CMEP 2010].

Through the enforcement of regulations on
pollution control by the environmental protection
bureaus,thelivestockfarmswillhavetopaymore
for pollutions caused by untreated manure slurry.
Itwillinfluencethelivestockfarmsnottoincrease
the price of manure slurry as high as they like
because the farms will have to consider the
treatment costs of manure slurry by themselves if
their manure slurry could not be treated by the
Yangling CBP. In sum, it shows the better
enforcement
of
environmental
protection
regulations, the more possibility for the livestock
farmstojoinintheYanglingCBP.
2) Challenges Caused by the Subsidy Policies for
SupportingLMBPofLivestockFarms
In order to reduce environmental pollution,
generate renewable energy and produce organic
fertilizer, Chinese governments provide financial
subsidy to share construction costs of Livestock
farmsLMBP.Thesefinancialsubsidiesaremainly
provided from the central governmental budget
and small amount of matching fund shall be
provided from the local governmental budget.
Local governmental matching fund is between 5
15% of construction costs. Total governmental
financialsubsidiesnormallycoverover50%oftotal
investmentandtherestamountshouldbefinanced
bylivestockfarms.Butgovernmentalbudgetisnot
availableforeverylivestockfarm.
Among the 21 livestock farms in Yangling CBP,
thereare5cattlefarmshavingover400milkcattle,
11farmshavingmilkcattlefrom50to399,3farms
withover500pigsand2havinglessthan500pigs.
According to subsidy policies and feedbacks from
local agricultural bureaus and development and
reform commission, the 5 cattle farms have better
chances to receive the governmental subside for
building LMBP. But the other 16 livestock farms
are too small and have less chance to receive
governmentalcapitalforbuildingtheirownLMBP.
There are two reasons for the livestock farms
intended to establish own LMBP: it is easier to
evadeenvironmentalmonitoringconductedbythe
environmentalprotectionbureaus.Itispossiblefor
the livestock farms spend very little or much less
amount of own capital than that declared in the
report. The other 16 livestock farms, with joining
Yangling CBP, will not receive any subsidy for
treatingmanure.Therefore,thebenefitsamongthe
21livestockfarmsforjoiningtheCBPYanglingare

InternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013www.ijesci.org

different.
InYangling,tillAugust2008therewasnoLMBPof
livestock farms receiving governmental subsidy.
ButtillAugust2010,thereare11livestockfarmsin
Yanglingreceivinggovernmentalsubsidiestobuild
LMBP at their own livestock farms. This quick
growthofLMBPwithin2yearswasresultedfrom
the rise of Chinese governmental spending for
stimulating the economic development of China
during the period of international financial crisis.
The more subsidies available from the central
governmental budget provides, the more livestock
farms could receive from governmental subsidies
although they are relatively small ones. But in
Yangling, none of the 11 LMBP which have got
governmental subsidies over last two years could
connecttheelectricitytothegrid.Becauseallthe11
LMBP could not reach the installed capacity of
electricity more than 500KW. According to the
feasibilitystudyreportsofthe11LMBP,utilization
ofbiogasisbasedontwooptions.Oneoptionisto
directly sell biogas nearby households or other
potentialcommercialcustomers.Anotheroptionis
to produce electricity for own use when it is
necessary. These two options of using biogas are
not included in the renewable energy law and
therefore the incomes of producing biogas are
limited when LMBP could not sell electricity to
grid.Inaddition,thesetwooptionsofusingbiogas
havenoexcessheattomaintaintheallyearround
stable temperature required by the anaerobic
digestion process. Therefore the quantity and
quality of biogas produced by LMBP vary among
differentseasons.Itwillneedadditionaloperation
costs to provide the heat demand for LMBP if the
operator has to or want to maintain a stable
temperature of anaerobic digestion process, which
isactuallythepreconditionforagoodperformance
of LMBP. This case is different for CBP which has
the combined heat and power generation unit.
Electricity connected to grid and heat could be
used for anaerobic digestion process and excess
heat could be sold to nearby customers if the
locationofCBPisselectedproperly.
Conclusions and Suggestions
MaterialflowanalysisoftheCBPYanglingshowsthe
projectwillhaveagoodcontributiontoproductionof
renewableenergy,protectionoflocalenvironmentand
global climate and recycling of manures slurry.
AccordingtotheeconomicsensitivityanalysisofCBP

Yangling,theperiodofstaticinvestmentreturnwillbe
between27yearsaccordingtothedifferentscenarios
for the prices of the electricity, digestate and certified
emissionreductions[Ifas2008].
The obstacles for realization of the CBP Yangling
mainly concentrate on stakeholder cooperation
challenges.Onechallengeexistsbetweenthelivestock
farms and the investment company of CBP Yangling
and another one is between the investment company
of CBP Yangling and the German biogas technology
company. The two cooperation challenges among the
directstakeholdersoftheCBPYanglingwillalsolikely
takeplaceforotherCBPprojectsinChina.Becausethe
challenge of organizing manure slurry from different
livestock farms is mainly affected by the lack of
coordination among the indirect stakeholders, who
regulate the subsidy policies of LMBP, the
requirement of connecting electricity from LMBP to
grid,andtheenforcementofenvironmentalprotection
regulations.Therefore,thedevelopmentofCBPisalso
highlycorrelatedwithperformancesofLMBP.
The lack of policies coordination between subsidy
policiesofAgriculturalMinistryandtheregulationsof
connectingelectricitytogridshouldbeimproved.The
governmentalsubsidiesaimtosupportlivestockfarms
to establish LMBP. But most of the LMBP have less
500KW as the installed electricity capacity. But the
regulations of grid companies require minimum
500KW installed electricity capacity to allow the
connection of biogas produced electricity to the grid.
Suchuncoordinatedsituationcausestwoproblems:on
the one hand, LMBP can hardly sell electricity to the
grid, which often results in direct emission of biogas
directly into the air, receiving little incomes from
producing energy and even ending the operation of
LMBP due to poor profitability. On the other hand,
CBP faces challenge to organize input materials and
cooperation with the large and middle size livestock
farms,becausethelivestockfarmsprefertobuildtheir
own LMBP with governmental subsides. So the
regulation on the minimum requirement of 500KW
shouldberedefined.Itwillrequirefurtherresearches
to define therequirements of connection electricityof
LMBPtogrid.
The governmental subsidies for supporting LMBP of
livestock farms should be improved. The present
subsidies focus on the construction costs sharing
insteadoftheefficiencyofLMBP.Oncethefeasibility
reportofabiogasprojectisapprovedbyDevelopment
andReformBureau,thegovernmentalsubsidyisfixed

67

www.ijesci.orgInternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013

accordingtothecalculatedtotalinvestment.Subsidies
will be reimbursed to the livestock farms with the
invoices of their expenses. One issue coming along
with the construction oriented subsidy system is the
livestockfarmswhichhavetheintereststoreducethe
engineering and construction costs of LMBP as much
as possible, and even spends very little or much less
amount of own capital than that written in the
feasibility report. The present way of delivering
subsidiesissuccessfulinpromotingtheestablishment
LMBP. But it does not make contributions to the
efficiency of the LMBP unless there is a good market
demand for the products of LMBP or a good
monitoring system to request the performance of
LMBP.
Therefore, it is highly suggested to improve the
enforcement of environmental protection regulations
in order to reinforce the monitoring and feedback
system about the performance of LMBP. Although
Ministry of Environmental Protection and local
bureaushaveissuedmanyregulationsandstandards,
thereisbiggaptoestablishmatchingfunctionsystem
to enforce the laws, regulations and standards.
Withoutthestrictenforcementofthoseregulationson
pollution control of livestock farms, the proper
performance of LMBP will not be concerned by
livestock farms because the establishment of LMBP
itself has provided a green light as a measure for
livestock farms to comply with the environmental
protection regulations. If the effective enforcement of
environmental protection regulations exists, livestock
farms will then compare the costs of proper design,
construction and operation of own LMBP and the
costsofcooperatingwithCBP.Uptonow,duetothe
lack of effective enforcement of environmental
protectionregulations,livestockfarmsofteninclineto
have own LMBP with governmental subsidies for
constructioncosts.
Improvement of the coordination among the indirect
stakeholdersisofhighimportanceforthecooperation
among the direct stakeholders of CBP projects in
China. This improvement is also a crucial need for
fulfilling the renewable energy plan of China, which
expectsthattheinstalledelectricitycapacityofbiogas
generatedelectricityshallreach3GWin2020fromits
startingpointof0.3GWin2005[NDRC2007].
ACKNOWLEDGEMENT

The study was cofunded by Federal Ministry of

EducationandResearch,Germany(FKZ:0330847AH)

68

and Ministry of Science and Technology, China

(2009DFA32710).
REFERENCE

Ackerman F. Material flows for a sustainable city.

International Review for Environmental Strategies 2005;
5(2):499509.
ADBAsian Development Bank. P.R.China: preparing the
integrated renewable biomass energy development
project.

Available

at:

http://www.adb.org/Documents/Reports/Consultant/406
82PRC/40682PRCTACR.pdf.Consultedon05/07/2010.
Binder C, Hofer C, Wiek A, Scholz R.. Transition towards
improved regional wood flows by integrating material
flux analysis and agent analysis: the case of Appenzell
Auserrhoden, Switzerland. Ecological Economics 2004;
49(1):117.
ChenL,ZhaoLX,DongBC,WangXC,GaoXX..Thestatus
andtrendsofthedevelopmentofbiogasplantsforcrop
strawsinChina.RenewableEnergyResources2010;28(3):
145148.
CMAChina Ministry of Agriculture. Classification of scale
for

biogas

engineering.

Available

at

CMA:

http://www.lrn.cn/criterion/EnergyCriterion/200810/t200
81023_288164.htm.Consultedon06/02/2010.
CMAChina Ministry of Agriculture, NDRCNational
Development and Reform Commission. 2009 Guideline
on application of subsidy for biogas project in rural
region.

Avaialbe

at:

http://ac.agri.gov.cn/ac/ViewContent.do?id=4affaa201d4b
49c3011dbe6a560a036a&year=2008&month=11&right=!E
NCODEsJxwL8Was88twWF&sysid=4028817608b273d401
08b273e12b1000.Consultedon06/07/2010.
CMAChina Ministry of Agriculture. Planning on biogas
projects (20062010) in rural China. 2007. Available at:
http://www.biogas.com.cn/Z_Show.asp?ArticleID=2142.
Consultedon06/02/2010.
CMEPChina

Ministry

of

Environmental

Protection.

Guideline on the livestock farm environmental monitor.

Available

at:

http://www.zhb.gov.cn/gkml/hbb/bgt/201006/W02010061
0591529235159.pdf.Consultedon07/15/2010.
CMEPChina

Ministry

of

Environmental

Protection.

Farmland environmental quality evaluation standards

InternationalJournalofEnergyScience(IJES)Volume3Issue2,April2013www.ijesci.org

for livestock and poultry production. Available at:

perspectivesthe case of biowaste delivery. Resource,

http://www.mep.gov.cn/pv_obj_cache/pv_obj_id_74C37

ConservationandRecycling2006;(47):101132.

E9B7BD5DF12D6DB58CC15EFA58CEB830400/filename/
W020100421387191951708.pdf.Consultedon07/15/2010.

Li JM, Xue M. The review and prospect on biogas

developmentinChina.Renewableenergyresource2010;

EnqueteKommissionSchutzdesMenschenundderUmwelt

28(3):15.

des 12. Deutschen Bundestags. Die Industriegesellschaft

NDRCChina

National

Development

and

Reform

gestaltenPerspektivenfuereinennachhaltigenumgang

Commission. Medium and longterm development plan

mitstoffundmaterialstroemen.Bonn.1992.P.549.

for renewable energy in China. Available at: http://

HaoXR.ThePresentStatusandProspectofRuralEnergyin
China. In: Singleyear expert meeting on green and
renewable technologies as energy solutions for rural
development.

Geneva,

UNCTADUnited

Nations

ConferenceonTradeandDevelopment;2010.
IfasInstitut

fr

angewandtes

Stoffstrommanagement.

www.sdpc.gov.cn/zcfb/zcfbtz/2007tongzhi/W0200709046
07346044110.pdf.Consultedon07/15/2010.
Wagner B, Enzler S.. Material flow managementimproving
cost

efficiency

and

environmental

performance.

Heidelberg:PhysicaVerlag;2006.
Wagner B, Enzler S.. Material flow managementimproving

Feasibility study report of Yangling biogas project.

cost

Internationalconsultantreport2008.

Heidelberg:PhysicaVerlag;2006.P.10.

efficiency

and

environmental

performance.

Kurt HG. Development and implementation of the Danish

Weiland P., Production and energetic use of biogas from

centralized biogas concept financial aspects. In.

energy crops and wastes in Germany. Applied

Ierland EC, Lansink AO editors, Economics of

BiochemistryandBiotechnology2003;109:263274.

sustainable energy in agriculture. Dordrecht: Kluwer;

2002.P.177188.
KytziaS,FaistM,BacciniP.EconomicallyextendedMFA:a
material flow approach for a better understanding of
food production chain. Journal of Cleaner Production
2004;12:877889.
Lang DJ, Binder C R, Scholz RW, Schleiss K, Staeubli B.
Impact factors and regulatory mechanism for material

Xu QX, Lin B, Guo XB, Guan XF, Qian L. Analysis and

proposals on large and mediumsized farm biogas
project in Fujian Province. Energy of China 2010; 32(1):
4043.
Yangling Regional Government. General introduction of
Yangling.

Available

at:

http://www.ylqzfw.gov.cn/News_View.asp?NewsID=255.
Consultedon06/02/2010.

flowmanagement:integratingstakeholderandscientific

69