123Fab #23

1 topic, 2 key figures, 3 startups to draw inspiration from

Over the years, the French government has boosted the financial incentives offered to the biomethane industry to reduce the costs associated with the production and operation of units. Whereas the exemption from the domestic consumption tax on natural gas (TICGN) previously applied to biomethane, the French government has just announced that it will no longer apply from January 2021. France Biométhane, a green gas think-tank, deplores this decision which, according to them, discredits biomethane and favors fossil fuels.

Biomethane, defined as a renewable natural gas with properties close to those of natural gas, may well play a major role in building a sustainable energy future according to the International Energy Agency (IEA). Indeed, there is no need to change the transmission and distribution infrastructures or end-user equipment. Consequently, it can be injected into the natural gas distribution network very easily or used as fuel for vehicles (bio-CNG, bio-LNG). It is also comparable to renewable energy since it emits 10 times less carbon than natural gas, can be stored and offers a solution to the intermittent use of solar and wind energy. Finally, it reduces the pressure on landfills and fits into the circular economy. Therefore, there are reasons to believe that biomethane could become more firmly established in the future. How about its economic viability and technical feasibility?

To date biomethane can be produced in 3 ways:

• The biogas road – which uses wet biowaste. It uses the means of anaerobic digestion to convert the biowaste into biogas. The biogas is then purified to remove the CO2 and other contaminants to produce biomethane.
• The syngas road – which uses dry or semi-dry biowaste. It uses the means of pyro-gasification to convert the biowaste into syngas. The syngas is then cleaned and methanised to convert the hydrogen, carbon monoxide and dioxide into methane.
• The hydrogen road – which uses electricity. It uses the means of electrolysis (or power-to-gas) to convert electricity into hydrogen. The hydrogen is then cleaned and methanised to convert it into methane.

In short, there are three main methods for producing biomethane: anaerobic digestion, pyro-gasification and electrolysis. To date, approximately 90% of the biomethane produced comes from anaerobic digestion and the upgrading of biogas. Among the purifying and upgrading technologies, we can find water scrubbing, adsorption, cryogenic separation, membrane technology, etc.

Waga Energy, a landfill gas-to-energy technology firm, is one of the large players in this segment. In 2018 they notably joined forces with environmental services giant Veolia. Since then, Veolia has been using Waga Energy’s Wagabox® technology to produce biomethane using biogas, which is injected directly into the natural gas grid operated by GRDF. In early October, the two players signed a contract to install a purification unit at the waste storage center in Claye-Souilly. This facility, which should be commissioned by February 2022, will produce biomethane from waste and supply 20,000 households in the Paris region with renewable gas.

Last year, France set an objective of injecting 10% of biomethane (21 TWH) into the country’s gas network by 2030, like Denmark is already doing. Numerous biomethane injection sites have seen the light of the day. To date, 133 biomethane injection sites are producing 2.3 TWH per year. With an average annual growth rate of more than 60% over the last 3-4 years, the French goal seems feasible.

However, production costs remain high when taking into account the cost of input supply, the cost of transformation (into biogas/syngas and then into biomethane), and the cost of injection (connection to the energy grid). The price to produce biomethane reaches €95 compared to €20 for natural gas. This is why the development of biomethane will ultimately depend on the policy framework and if the market conditions remain attractive for the project leaders (green gas feed-in tariffs, stability, or reduction of construction and gas connection costs).

Overall, the optimal uses of biomethane are in the end-sectors where there are fewer low-carbon alternatives (high-temperature heating, petrochemical feedstocks, heavy-duty transport, shipping, etc.). There are also other motivations such as rural development (household digesters), energy security (complementing wind and solar PV or substituting imported natural gas) and urban air quality

Circular economy for industrial waste: Are we getting closer?

For a long time, take-make-waste has been the standard approach to consumption and production. According to a PwC study, 50-75% of the resources used are returned to the natural environment as waste. Thus, manufacturing must give way to more sustainable and circular approaches.

The circular economy is a system of exchange and production which, at all stages of the product life cycle, aims to increase the efficiency of resource use and reduce environmental impact. The circular economy is not limited to industrial waste management, it also includes product design and recycling processes to close the loop. In this newsletter, we will focus on the technologies and methods to limit industrial waste.

In general, industrial waste is collected and then either landfilled (30% of the waste), incinerated, composted (for organic materials), or recycled. Today, a circular economy approach seems more relevant to valorize industrial waste. While the recent takeover of Suez (water and waste management solutions) by Veolia highlights the complexity of the industrial waste market, many other innovative solutions are being developed.

There are several reasons behind the growing interest in the circular economy. The first reason is the global awareness of the climate emergency: 68% of the world’s population considers global warming to be a major threat. The environmental benefits of a circular economy are manyfold: it contributes to the reduction of waste and greenhouse gas emissions, but also to the systematization of recycling. It also reduces dependence on imported resources (raw materials, water, energy), which is critical in the context of resource scarcity. Indeed, COVID-19 has shown the importance of diversifying our value chains and improving Europe’s strategic autonomy by increasing the value of the materials, adopting thoughtful design, reducing recycling costs and ensuring the functioning of the market for secondary raw materials. Another reason lies in technological breakthroughs (digitalization, industry 4.0) which allow new innovative solutions to emerge. In addition to the savings made through the purchase of second-use products, business growth is stimulated and competitiveness is strengthened.

Both private and public players now see industrial waste as an untapped resource to close the loop.

Kalundborg Industrial Symbiosis is a partnership between eleven public and private companies in Denmark. Since 1972, they have developed the world’s first industrial symbiosis, very close to the principles of the circular economy. Its model is based on the fact that a residue from one company becomes a resource for another, which is beneficial for both the environment and the economy. Approximately 135,000 tons per year of fly ash are avoided, and annual gypsum waste is reduced by 80,000 tons. For instance, water from the Statoil refinery is reused to cool the power station; waste heat from the power station is used to heat the district; fly ash from the power station is sent to cement manufacturers and gypsum is sold to a plasterboard manufacturer.

This sustainable initiative, which started nearly 50 years ago, is no longer the only one; many projects are underway, on different scales and led by a wide range of players.

EU-backed projects

The EU supports and funds circular economy innovations for industrial and urban waste management. For instance, the BAMB (Buildings as Material Banks) project aims to reduce construction and demolition waste through a new standardized circular method of building design, allowing the construction sector to recover, repair and reuse building materials. This approach goes beyond the limited and linear life-cycle analysis approaches currently used in the construction industry tools and methodologies.

Large corporation projects

Large corporations are also tackling this issue. ArcelorMittal, one of the biggest recyclers of steel in the world, recycles around 30 million tons every year and ambitions to become a leader in the circular economy. They reuse more than 80% of their steel production residues and by-products, and about 30% or their steel is made from scrap metal instead of iron ore. In Spain for example, ArcelorMittal has found markets for slag (a glass-like by-product that remains after the separation of a given metal), to sell not only what has been produced but also what was been stockpiled in previous years. Other innovative uses of slag include ballasting offshore wind turbines to replace natural materials, thus avoiding the ecosystem disruption that can result from the extraction of these materials from their original habitat.

Startup solutions

It is very interesting to see that smaller players – startups – are also entering this “circular economy waste market”. There are multiple ways to close the loop, startups are positioned in different segments of the value chain:

• In the logistics segment, Cycle Up is the leading professional marketplace for deconstruction materials and building site surplus. Thanks to the marketplace, construction players can sell and exchange their building materials. It also gives advice on the reuse of these materials. This global solution is both a platform and a service provider. All materials can be sold, but especially materials for finishing work (joinery, doors, locks, etc.).
• In the transformation / revalorization segment, Sopraloop recycles and converts post-consumer PET waste (PET bottles, PET trays, etc.) into recycled polyols. They are still working on the prototype, but their solution should enable its users to recycle 7,000 tons of non-recycled complex PET and produce 10,000 tons of recycled polyols per year. In this segment, there is also ZaaK, a startup that focuses on recycling industrial waste into high-value products. Using patented clean technologies, ZaaK intends to revolutionize the building and construction industry with state-of-the-art technologies and high-quality products made from fly ash, a waste by-product from coal-fired power plants.
• In the digital segment, Trinov improves waste management efficiency through data and algorithms. It makes it possible to plot the waste stream generated to simulate the potential use of waste products such as energy recovery, recycling, composting, etc. This modeling allows the financial and environmental impact of each scenario to be measured before making a decision.
• In the waste-to-energy segment, there are mainly solutions for converting organic waste (a subject we’ll dive into in another newsletter). The startup Sistema provides biodigester equipment to produce biogas from organic waste. The biogas can then be used for residential and farming activities.

However, this market faces major financial and legal challenges, slowing down the development of waste services for a circular economy. First, institutional rules and regulations need to be adapted to encourage and promote the development of the circular economy, both nationally and internationally. In the EU, for instance, the common legal basis is still under discussion due to the difference between countries. Secondly, business transformation is costly. Financial incentives are essential to speed up the establishment of the circular economy. Business models also need to be adapted. Even if an asset has been appropriately designed  (durable, repairable, etc.) the impact is limited if the business model is not in place to reap the benefits. Finally, multi-stakeholder collaboration is necessary to have a positive impact. To combine environmental and social aspects, collaboration is fundamental to achieve an impact. A good example is Responsible Steel, the industry’s first global multi-stakeholder standard and certification initiative, which aims to develop higher standards, taking into account circularity as well as social and environmental aspects.

Overall, the circular waste economy is still in progress but its future outlook seems promising. Opportunities for industrial waste valorization are arising, thus the sooner it is addressed, the better (both for the planet and for company financials). A major challenge remains to find technical solutions to recycle (particularly difficult for composite materials) and integrate critical materials into a circular economy process.

2 Key Figures

207 Waste Management startups

in the world registered by Crunchbase

Market size expected to reach $435bn by 2023

The global waste management market size was valued at $285bn in 2016 and is expected to reach $435bn by 2023.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Waga Energy, Enosis and Electrochaea.

Cycle Up

Cycle up is a marketplace based on the reuse of building materials. The marketplace allows construction actors to buy materials that have already been used or not. It is intended for players in the sector: owners, project owners, architects, demolition workers, builders, it provides access to materials and their reuse solutions.

Melodea

Melodea has developed technology for the extraction and industrial production of cellulose nanocrystals (CNCs) from wood pulp and paper production side streams. It extracts CNCs and using them to produce products like water-based adhesives, paints and coatings, or eco-friendly foams.

Recycling Technologies

Their modular technology can be mass-produced to recycle plastic waste into feedstock for new plastic production. This solution can be installed at existing waste sites anywhere on the globe to help divert plastic waste away from landfill, incineration and leaking into our environment.