The Biomass Supply Chain Is in Its Infancy: Suhas Baxi
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The figures provided by the Ministry of New and Renewable Energy (MNRE) reveal that every year, India generates approximately 500 million metric tonnes of agricultural and agro-industrial byproducts. As a waste management method, burning agricultural waste is widely used, although it has far-reaching and negative impacts on the environment. Because it's the most efficient and cost-effective method, most farmers nowadays just burn the gathered straw to prepare their fields for the following planting season. This practice of stubble burning is prevalent in many parts of northern India, including Punjab, Haryana, and Uttar Pradesh, and even in certain portions of Pakistan. It adds to the heavy fog that blankets Delhi every winter. Around one-fifth of New Delhi's yearly pollution is attributed to crop burning, according to the Indian government. Inefficiency in the food chain results in the annual loss of 16–17 million metric tonnes of grains, according to a recent media article. Grain storage and harvesting practices that lack scientific rigor are mostly at fault for this issue. The same is true for the enormous quantities of perishable food items that annually go to waste as a result of improper handling during storage, transportation, and distribution, including fresh produce, milk, and dairy products. More and more, though, people are making an effort to reduce and reuse this agricultural waste in a variety of ways. While interacting with StartupTalky Suhas Baxi, Co-founder & CEO, of BiofuelCircle, revealed the potential of agri-waste in the allied industry sector.
What is the annual amount of agri-waste generated in India, and how much of that amount has been utilized by allied industries?
Mr. Baxi: In an agrarian country like India, every year, there is a minimum of 235 million MT of surplus agri residue available in the farms. This is equivalent to 125 million MT of coal or 600 million barrels of crude oil, which is nearly 25% of India’s oil imports. 100% utilization of this surplus crop residue can potentially lead to providing 17% of the country's energy needs, creating additional sources of income for farmers and creating jobs in rural and industrial sectors. The biomass opportunity in our country is big enough to potentially power a 40-billion-dollar economy. However, more than 70% get burnt or wasted due to a combination of reasons.
To realize the full potential of this opportunity, we are required to establish an end-to-end farm-to-fuel ecosystem. Given the tenuous nature of the rural-industrial connection, this would require enormous efforts to organize and enable all stakeholders in the biomass supply chain.
What are the major challenges involved in utilizing agri-waste for a quality product or service?
Mr. Baxi: A deep dive into the agricultural biomass segment in India indicates that supply chain inefficiency has created a twin problem of wastage and pollution. The problems are:
- Fragmented Rural Sources: Small and spread-out land holding makes aggregation difficult
- Seasonality: Biomass is available for only a limited time in a year at the time of harvests, while supply is required all year round.
- High Cost of Logistics and Storage
- Low Farmer Incentives
- Market Access: Inability of rural suppliers to have direct access to industrial buyers
Are businesses that specialize in turning agri-waste into a marketable commodity getting any kind of government backing?
Mr. Baxi: The Government of India has classified this sector as a priority sector for lending. Several initiatives under the Ministry of New and Renewable Energy and the Ministry of Oil and Natural Gas have been put in place. Biomass supply chain, biomass aggregation, processing, and bioenergy refineries are seen as businesses that need startup support. The approach is not limited to just providing tools. This is one sector where the public sector and private sector along with the government are taking active steps to achieve near-term targets and a long-term vision.
We are working with MNRE to set up rural biomass enterprises as a part of our Local Markets mechanism for the biomass supply chain.
How technology can be the game changer in this drive to convert agri-waste into a formidable product?
Mr. Baxi: A few million farmers, seasonal supplies, small rural businesses, round-the-year industrial demand, and service providers for transport, quality, finance, etc make for an interesting used case for digitalization. To top it, the traceability of biomass from its origin to its end use will create a reliable framework for carbon neutrality. Along the way, one also needs to address issues associated with incentivization, price discovery, standardization, and supply reliability.
While applications such as food delivery, transport services, etc which have a consumer end-use have become popular, for biomass one needs a platform that makes it easy for millions of farmers to participate while providing a robust framework for industries too. All this requires a strong technological connection which has to be coupled with a skilled and hardworking team.
The biomass supply chain is still at a very early stage. We currently use about 20% of the available Agri-residue biomass. At its maturity, the biomass product supply chain has the potential to be > 40 billion US$ in annual turnover. The opportunity is for us to put a strong digital technology framework that creates, ease, efficiency, reliability, and choice.
Tell us about the cutting-edge technology you are employing to turn agri-waste into a competitive offering.
Mr. Baxi: BiofuelCircle has set up an e-marketplace for Biomass and Biofuels. The company has three main offerings that are available through Web/Mobile-App:
My BiofuelCircle: A community portal for the bioenergy community. BiofuelCircle Marketplace: Digital platform for buying and selling biomass, biofuels, and biofertilizers.
BiofuelCircle Network: A network of service providers for quality assurance and logistics services for biomass and biofuels.
Buyers and sellers of biomass and biofuels can subscribe to the BiofuelCircle marketplace through either pre-paid or post-paid subscription plans. They also have access to a bouquet of value-added services such as Verified Supplier Services, Smart Buyer Services, Delivery Services, Warehousing Services, and Trade Finance.
How having an advanced storage system can aid this sector?
Mr. Baxi: By BiofuelCircle’s digital platform, buyers & sellers of biomass and biofuels can discover prices commodity-wise, and region-wise, and trade online at market-driven prices. With price transparency & predictability, investments in the form of storage get a boost and financing opens up in the bio-energy sector. The BiofuelCircle model is based on such inter-connected local markets. One such market is depicted in the graph below.
Under the guidance of MNRE, along with GIZ and BAIF, BiofuelCircle is developing an entrepreneurial model for FPOs and farmers to build capacity in the Bioenergy sector.
It has introduced a digitally enabled rural business concept – a Biomass Bank that facilitates biomass collection, aggregation, transport, and processing for green energy using BiofuelCircle’s digital platform.
Souvik Dey
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