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The costs of AD systems are also falling because Page 32 © Copyright Pira International Ltd 2007 Advances in Biogas The economics of biogas 6 of the increasingly sophisticated technologies they use, which reduce overall treatment costs as well as the amount of manpower needed to operate them. Thus, AD is now much more competitive with traditional composting. On an installed cost per tonne measure, in fact, full turn-key AD systems in Europe and the US have seen a reduction in initial capital expenditure of the order of 50%.

In addition, a floor price for biogas producers will be set to protect them from the ups and downs in the energy market. The passage of the bill has been helped by the growing understanding that biogas can potentially be pumped directly into the natural gas pipeline infrastructure, as well as its ability to capture methane emissions that are 21 times more potent than those from carbon dioxide. In fact, anaerobic digestion can prevent methane from entering the atmosphere and generate carbon offset credits that can then be traded under a greenhouse gas cap-andtrade system.

It would meet the Africa’s requirement of using scarce resources to the maximum, particularly in the case of small farms. Following the extraction of energy from dung and other organic waste, the resulting sludge alone – even untreated – makes a high-quality fertiliser for improving soil quality and generating higher crop yields. Page 29 © Copyright Pira International Ltd 2007 The economics of biogas Introduction 6 If in the medium to long term the biogas industry survives and prospers without government assistance, it should attracting private sector backers, much as the ethanol and biodiesel industries have done.

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