GBEP s Economic Indicators in VIETNAM For cassava-based ethanol and biogas

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1 Trung tâm Nghiên cứu và Phát triển Hệ thống Nông nghiệp Centre for Agrarian Systems Research & Development GBEP s Economic Indicators in VIETNAM For cassava-based ethanol and biogas CASRAD s team: Dao The Anh, Nguyen Ngoc Mai, Bui Quang Duan, Nguyen Thi Dieu Linh FAO Project Building Capacity for enhancing bioenergy sustainability through the use of GBEP indicators (GCP/GLO/554/GER) Ha noi, 15 November 2017

2 INDICATORS 17 PRODUCTIVITY (Ethanol and Biogas) (17.1) Productivity of bioenergy feedstocks by feedstock or by farm/plantation (17.2) Processing efficiencies by technology and feedstock (17.3) Amount of bioenergy end product by mass, volume or energy content per hectare per year (17.4) Production cost per unit of bioenergy 08/01/2018 2

3 Indicator 17.1: Productivity of fresh cassava The cassava productivity is 19.8 ton/ha Production over 10.9 million tons of fresh cassava, equivalent 4.5 million tons of dry cassava chips, 1 million tons of dried cassava chips imported from Cambodia, the total output of dry chips in Vietnam is about 5.5 million tons. In 2016, the export volume of cassava is 3.7 million tons (dry cassava chips and cassava starch). China remained the main export market, 87% market share About 1.8 million tons (about 33%) of dry cassava chips are consumed domestically mainly for processing animal feeds.

4 17.2. Processing efficiencies by technology and feedstock (cassava - ethanol) The starch content of fresh cassava is 25-35%, so 1 kg of dry cassava chips could be produced from kg of fresh cassava. Ethanol production technology: 2.5 tons of dry chips for produce 1000 l of ethanol. 1 liter of ethanol = 21.1 MJ and 2.5 tons of dried cassava chips can produce 1000 l of ethanol = MJ. The processing efficiency of ethanol is 8440 MJ/ton of dried cassava chips (equal to 3.52 MJ/ton of fresh cassava). 4

5 17.3 Energy amount of bioenergy ethanol Average yield of fresh cassava tons / ha, equal to 7.99 tons/ha of dried cassava chips (2,4 kg of fresh cassava = 1 kg of dried cassava chips) 2.5 tons of dried cassava chips can produce 1000 l of ethanol = MJ tons/ha of dried cassava chips can produce an amount of bioenergy end product of MJ. And 1 hectare of cassava can produce an energy amount MJ/ha per year. 5

6 17.4. Production cost per unit of bioenergy The cost of dried cassava chips accounts for 78% of ethanol production cost. The price of dried cassava chips is 180 USD/ton (FOB price in Quy Nhon on 5/5/2017), and ethanol production cost is about USD/1000 l of ethanol (equal to 0,576 USD/l). The production cost per unit of bioenergy is 0,027 USD/MJ. 6

7 INDICATORS 17 - BIOGAS Productivity of biogas feedstocks (tons/year) Biogas at household & farm levels All country, having 27,750 millions of pig. One pig 50 kg produce 2.6 kg fresh manure/day (5.2% of pig weight) or ton fresh manure/year (SNV, 2011) Total fresh manure is 84 millions of ton/year. At industrial level (Biogas from cassava starch production) All country, having 102 cassava starch factories, average capacity is 36,750 tons of cassava starch/plant/ year Productivity m3 wastewater/1 ton of starch

8 17.2.Processing efficiencies by technology and feedstock for Biogas a. At household & farm levels Processing efficiency of biogas is MJ / kg of pig manure on a wet base b. At industrial scale (Biogas from cassava starch production) Processing efficiency of biogas is MJ / m3 of wastewater

9 17.3. Amount of bioenergy end product by biogas Table 2: Biogas at household /farm levels Type Quantity Number of Plants (90% in use) Biogas Produced in GJ/plant/y Total biogas production (GJ/y) SBP (10 m 3 ) 450, , ,720,000.0 MBP 500 m 3 14,370 12,933 1, ,642,880.2 LBP 2000 m 3 1, , ,632,673.5 Table 3: At industrial level (Biogas from cassava starch production) Content Value Unit Total wastewater volume Processing efficiency of biogas Biogas output recovered for use Number of cassava starch factories in the country Total biogas production taking back for using in the country 720,750 m 3 /plant/year MJ/ m 3 of wastewater 31,439,115 MJ/plant/year 102 plant 3,206,789,730 MJ/year

10 17.4. Production cost per unit of bioenergy Biogas at household & farm levels Production cost per unit of bioenergy household level is USD/MJ Production cost per unit of bioenergy at farm level is USD/MJ The labor costs is 60 % of the total biogas production costs (at both levels), and the depreciation costs of the plant is 22-26%. Biogas at industrial scale from cassava starch production Production costs per unit of bioenergy of cassava starch processing factories is USD/MJ At the industrial level, the depreciation cost and the cost of electricity used to operate the biogas plant are %

11 17.4. Production cost per unit of bioenergy No. Fuel Unit Conversion coefficient of energy unit (MJ) Fuel price in 2016 (VND / kg) Fuel price in 2016 (USD / kg) Production cost per energy unit (USD/MJ) 1 LPG Kg , DO oil Kg , Wood Kg Rice husk Kg , Sawdust firewood Kg , Table 4: Production cost per energy unit of energy sources Biogas at household level Biogas at farm level Biogas at cassava starch factory Production cost per energy unit of fuel is arranged as follows: Biogas from cassava starch factory < Sawdust firewood < Rice husk < DO oil < Biogas at household level < Biogas at farm level < LPG < Wood.

12 INDICATORS 19 GROSS VALUE ADDED (Ethanol and Biogas) 19.1 Gross value added per unit of bioenergy produced 19.2 Percentage of gross domestic product 08/01/

13 INDICATOR 19 - GROSS VALUE ADDED ETHANOL Gross value added per unit of bioenergy produced The cost of ethanol production is $ per liter (excluding ethanol distribution costs) and the cost of ethanol production is $ 0.68 per liter (including ethanol distribution costs). The average selling price of E5 RON 92 gasoline is 17,025 VND/liter for 2017 (equal to 0,75 USD/liter). The cost of ethanol production is $ 0.68 per liter. Thus, the added value is 0.07 USD / liter. Gross value added per unit of bioenergy produced is USD/ MJ 13

14 19.2. Percentage of gross domestic product Total GDP (PPP) of Vietnam in 2016 is $ 595 billion. Total national consumption of ethanol was 29,500 m3, thus 29.5 Ml. The total added value is 0.07 USD/l. The ethanol production industry's GDP is estimated at $ million per year. The contribution to GDP of ethanol production industry in 2016 was %. In 2018, E5 Mogas 92 will be used for replacing conventional Mogas 92. The ethanol demand would increase up to M liters. The ethanol production industry's GDP would increase up to $ million per year. The contribution to GDP of ethanol production industry in 2018 will be %. 14

15 19.1. Gross value added per unit of bioenergy BIOGAS + Biogas at household level A biogas plant m 3 will generate value added from saving fossil fuel, fertilizers, fish feed of USD The value added per unit of bioenergy is USD /MJ The value added in the whole country is estimated equal to USD 11,296, At industrial scale (Biogas from cassava starch production) The investment in wastewater treatment system to recover biogas of the cassava starch factory produce a value added of USD per MJ With 102 cassava starch factories, the value added of the country reached USD 32,545,709.0

16 19.2. Total added value and Percentage of gross domestic product - BIOGAS Total added value from biogas: million USD Viet Nam GDP in 2016 is 595 billions USD Percentage of Gross domestic product is %.

17 INDICATOR 21 - TRAINING AND REQUALIFICATION OF THE WORKFORCE (only for Biogas) (21.1) Share of trained workers in the bioenergy sector out of total bioenergy workforce (21.2) share of re-qualified workers out of the total number of jobs lost in the bioenergy sector (no data)

18 Sub Indicator 21.1: Share of trained workers in the bioenergy sector out of total bioenergy workforce In the total of biogas digesters, 55 % supported by projects In the project, 94% of households using biogas are trained & 83% household were guided at the biogas plant (BUS, 2014) The SNV project training (2010): 1020 technicians and 1607 masons, 220 team leaders. 2,000,000 workdays and 1,800 mason works. 100% of households are satisfied with the technology of the building workers (SNV, 2010).

19 INDICATOR 20: CHANGE IN CONSUMPTION OF FOSSIL FUELS AND TRADITIONAL USE OF BIOMASS for Biogas 20.1: 20.1a: Substitution of fossil fuels with domestic bioenergy measured by energy content, 20.1b: Annual savings of convertible currency from reduced purchases of fossil fuels. 20.2: Substitution of traditional use of biomass with modern domestic bioenergy measured by energy content.

20 Indicator 20.1a: Energy savings through the use of biogas instead of fossil fuels Type GJ/y Efossilsub_i livestock production 7,076,416.9 Efossilsub_i cassava processing 5,354,793.0 Total 12,431,209.9 Indicator 20.1b Changing the use of fossil fuels by biofuels saving in 2015 = million USD Indicator 20.2 Substitution of traditional use of biomass with modern domestic bioenergy measured by energy content Type Total bioenergy (GJ) Wood and residues (ton) Livestock 7,317, ,371 Cassava starch processing plants 5,354, ,674 08/01/2018 Total 12,672, ,182,045

21 Indicator 17 Conclusion and Recommendation (Indicators 17 and 19 ethanol) To reduce the cost of ethanol production, the factories need to apply bioenergy processing technology of developed countries (such as USA, India ). It is necessary to study to improve the cassava variety and invest to increase the productivity of cassava to reduce the cost of dried cassava chips. Indicator 19 To increase the added value per unit of bioenergy, it is necessary to find ways to reduce the cost of ethanol production (as reduce the cost of inputs and improve the technology to increase the efficiency of bioenergy production). In order to increase the GDP contribution of the bioenergy industry, there should be a policy to increase bioenergy consumption. 21

22 Indicators 17 Conclusion and Recommendation (Indicators 17 and 19 biogas) Using biogas to replace fossil fuels is necessary and effective. However, the cost of building biogas digester is still high, the payback period is long and biogas surplus at farm level is constraint. Therefore, the government should have policies to help farmers, livestock farms and cassava starch factories to access capital to build biogas digester. Indicators 19 Vietnam has potential for biogas, but main constraint is distribution of gas. Waste water and digestive derived from biogas production are not used thoroughly. In order to increase the GDP contribution of the bio-energy industry, Vietnam should have a policy to exploit the potential of biogas at farms level to produce electricity. The government should have propaganda policies about effective use of wastewater, biogas waste. 22

23 Conclusion and Recommendation (Indicators 20 and 21 biogas) Need to build the official statistic on biogas digesters in livestock and on labor force working in biogas Need assessment of labor forces training for biogas and develop public extension for biogas training 08/01/

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