Suhas Baxi, Co-Founder and Chief Executive Officer of BiofuelCircle shares his view on the biomass supply chain with AgroSpectrum in an exclusive interview.
A cloud-based platform, the BiofuelCircle Marketplace links supply chain participants in rural areas with industry. Businesses are able to tap into a previously unregulated market for verified local biomass and biofuel providers. Suppliers of biomass and biofuels, in turn, are able to network with potential customers ranging in size from individuals to corporations. In a recent test auction on the BioFuelCircle platform, NTPC Limited successfully sold biomass pellets to NTPC Mouda. Suhas Baxi, Co-Founder and Chief Executive Officer of BiofuelCircle shares his view on the biomass supply chain with AgroSpectrum in an exclusive interview.
In what ways do you think allied industries will use agri-waste in the future? How much agri-waste does India produce each year, and what percentage of that has been put to use by allied industries?
Every year, farms in an agricultural nation like India produce at least 235 million metric tonnes of extra agricultural residue. This amounts to around 25 per cent of India’s oil imports, which is the same as 125 million MT of coal or 600 million barrels of crude oil. When used in its entirety, this agricultural waste has the ability to provide 17 per cent of the nation’s energy demands, provide farmers with a new revenue stream, and boost employment opportunities in both rural and urban areas. The potential biomass market in our nation is large enough to fuel an economy worth forty billion dollars. But for a variety of reasons, over 70 per cent ends up in the trash or burned.
We must set up a whole farm-to-fuel ecosystem if we want to make the most of this opportunity. Coordinating and empowering all parties involved in the biomass supply chain would necessitate tremendous effort, considering the precarious nature of the rural-industrial connection.
Could you please list the most significant obstacles in turning agri-waste into a high-quality product or service?
Research of India’s agricultural biomass sector reveals that inefficient supply chains are to blame for the country’s pollution and wasting problems. Aggregation becomes more challenging when rural resources are fragmented, meaning that land holdings are tiny and dispersed. While biomass is needed continuously, it is only available for a short period of time each year during harvests. Logistics and storage costs are very high, which is another big problem. One more thing hurting the already-suffering rural suppliers: they can’t reach industrial buyers directly.
How is the government supporting companies which are working in recycling agricultural waste into a viable product?
This industry has been designated as a priority sector for loans by the government of India. Several programmes have been established by the Ministry of Oil and Natural Gas and the Ministry of New and Renewable Energy. There is a demand for start-up capital in the biomass supply chain, biomass aggregation and processing, and bioenergy refineries. Providing tools is simply one part of the approach. Here is an area where the public and private sectors, in addition to the government, are working together to accomplish both short-term goals and long-term objectives. As part of our Local Markets mechanism for the supply chain of biomass, we are collaborating with MNRE to establish biomass businesses in rural areas.
How technology can be the game changer in this drive of converting agri-waste to a formidable product?
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 use case for digitalisation. To top it, 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, standardisation, 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 per cent of the available Agri-residue biomass. At its maturity, the biomass product supply chain has a potential to be more than 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.
What inputs are required for the growth of the biomass sector in India?
Technology, legislation, finance, and infrastructure are all important parts of the puzzle when it comes to expanding India’s biomass industry. Spending on research and development to enhance processing, conversion, and yield of biomass feedstock is one major requirement. Another area of focus is in-depth research into improved harvesting methods and the creation of disease-resistant biomass crops with increased yields. Cooperation with development organisations and international financial institutions for the purpose of obtaining financial and technical support can further support this industry. Biomass production and usage training sessions for technicians, farmers, and other business people can help in maintaining a healthy supply chain. Coordinated efforts across these many inputs are crucial to the success of India’s biomass sector. India can fully utilise biomass energy to promote energy security, rural development, and environmental sustainability by attending to technical, financial, infrastructure, human resource, and environmental concerns.
What are the growth strategies and plans of BiofuelCircle for FY 24-25?
The BiofuelCircle is working on an entrepreneurial approach to help FPOs and farmers increase their bioenergy capacity. They are receiving advice from MNRE, GIZ, and BAIF. Through its internet platform, BiofuelCircle has offered a new idea for a rural business: a Biomass Bank. This bank would help with collecting, aggregating, transporting, and processing biomass for green energy. Buyers and sellers of biomass and biofuels can use BiofuelCircle’s digital platform to find commodity- and region-specific prices, as well as to trade online at market-driven prices. A more transparent and predictable pricing structure encourages investments in storage and opens up financing opportunities in the bio-energy sector. Such linked regional marketplaces are the basis of the BiofuelCircle concept.
By Nitin Konde
Suhas Baxi, Co-Founder and Chief Executive Officer
