Case 12.2: Pageldynių plantacija - a full scale self-sustainable closed loop circular economy model for large cities’ nutrient rich waste - Lithuania
Name of the company: UAB Pageldynių plantacija (NutriBiomass4LIFE project)
Country: Lithuania
Size of the business: municipal water supply and waste water treatment plant – 650 employees, biomass boiler – less than 10 employees, nutrient rich waste management company and biomass supply – less than 10 employees
Website: www.nutribiomass.eu
Background
The establishment of the company was driven by the need to find solution to utilize problematic nutrient rich waste (waste-water treatment sludge and biomass ashes) and to find solution to increase woody biomass yields while growing biomass on non-fertile marginal lands. Thus, circular economy model to benefit both parties was established to introduce economically and environmentally feasible solution.
The search for solution while combining these two problems started 5 years ago via some research and experimental development – search for fast growing tree clones adapted to local climatic conditions and fertilization trials using nutrient rich waste. The initial research was conducted during the EU Eurostars funded project “Snowtiger”, during which first poplar plantations were established in Lithuania and fertilized with municipal water treatment sludge. During the project frost resistant poplar varieties were tested in Lithuania, Latvia, Estonia and Sweden and fertilization trials with municipal water treatment sludge digestate were performed in Lithuania.
Business partnership (without establishing a legal entity, but via implementation of a project) is formed by private limited liability company (land owner and biomass grower), municipal company (water supply and waste-water treatment plant), private limited company (biomass boiler), NGO (forest and land owners association) and state research institutions.
Main activities
The main activities are biomass plantation establishment and management, biomass production, waste management (reuse of nutrient rich waste for fertilization purposes), while side activities include substantial CO2 sequestration throughout the whole circular production cycle, biogas production from sludge and power production from biogas.
Some changes have been made since the start of the project. During the project additional biomass plantations were established in a larger area. It was needed to ensure reuse on municipal waste water sludge from a large city according to legal regulations. The project demonstrates shift towards circular mode as nutrient rich waste is being reused for biomass yield improvement and CO2 sequestration in tree biomass instead of being disposed to the landfills. The partnership differentiates itself as it provides sustainable solution to nutrient rich waste management through multiple stakeholders’ cooperation activities, and this is unique as there are no similar models operating in Lithuania.
Market
There are different customers for different products and services. Biomass can be sold to local biomass boilers and wood processing industry (particle board mills). Municipal water treatment plants and biomass boilers are clients for nutrient rich waste management. Waste-water treatment sludge digestate and biomass ashes can be used for fertilization by land owners, farmers, forest owners to grow biomass. Heat produced from biomass is sold to district heating network. Customers are usually reached by direct sales. Biomass is sold via biomass energy exchange, specialized intermediary.
Challenges and solutions
Internally in Lithuania, the partnership considers replication of circular bioeconomy model in other municipalities of Lithuania to reuse their waste-water treatment sludge digestate for woody biomass growing. Within implementation of the project, there will be small replications in Sweden and Latvia. The model to use waste-water treatment sludge for biomass growing is a local circular bioeconomy concept and can be replicated based on legal framework and existing biomass growers’ interest in different municipalities, as waste water treatment sludge is available everywhere. At the same time, publicity is needed to promote proposed circular economy model within society.
The major limitations are legal framework and social perception – each country defines its own legal framework for usage of sewage sludge or biomass ashes in agriculture and biomass growing (besides the EU Sludge Regulation) due to certain contamination risks. Despite unlimited market potential, biomass growing is a very challenging business – market prices may fluctuate over 100%, high initial investment costs usually need subsidies to make this activity feasible. This is particularly challenging as investment into biomass plantations is quite long term – ranging from 4 years to 15 years, when the revenue from harvesting of biomass may be expected, while initial investment is significant.
Up till now, the biggest challenge has been unclear legal framework. Over time legal framework was changing constantly – stricter regulations are being imposed of nutrient rich waste usage in biomass growing. Climate change introduces new opportunities but also challenges to biomass growers – more summer droughts make biomass growing business riskier, requires more research for drought and frost tolerant biomass crops.
Funding
Circular economy model as demonstration model was financed by the EU funding (LIFE programme), the Ministry of Environment of the Republic of Lithuania, the Swedish Energy Agency and project partners. The total cost of the project “Nutribiomass4LIFE” is 4 million EUR. In addition, the project has received additional grant from public authorities for demonstration model.
A municipal waste-water treatment company and biomass boiler receives benefits via waste management cost reduction immediately, waste management company receives profit after two years of operations, while biomass growers 8‒12 years after biomass sales.
What makes this case innovative?
The project represents a full scale self-sustainable closed loop circular economy model for large cities’ nutrient rich waste – municipal wastewater treatment sludge and biomass ashes – recycling into renewable energy for city’s needs via environment friendly biomass plantation filter.
Other related Business Cases
Case 12.1: Greve Biogass – biogas from agricultural and municipal waste and sewage – Norway
Case 9.1: Kaffeeform – coffee cups made from coffee grounds – Germany