Six months after installing a biogas generator, Nguyen Trong Do, a farmer in Vietnam’s northern province of Bac Ninh is now happy with his reduced monthly electricity bills and no longer worried about the environmental hazards emitted from his farm.
“I was relieved when I got an electricity bill in the first month after running the generator,” Do confessed as he unveiled the generator at his 10,000-pig farm in Dai Trach Commune, Dinh To Village, Thuan Thanh District, Bac Ninh Province.
Do is one of many owners of medium- and large-sized livestock farms across Vietnam who are reaping the benefits of bioenergy by capturing biogas from manure in a closed-loop anaerobic digester and using it for electricity generation.
According to Ho Thi Lan Huong, Vice President of Policy and Innovation at the Asia-Pacific Biogas Alliance, and General Secretary of the Vietnam Biogas Association, biogas capture from animal waste can reduce greenhouse gas emissions and methane recovery from biogas can provide a cost-effective source of renewable energy in countries with large livestock populations such as Vietnam.
Statistics from the Ministry of Agriculture and Rural Development (MARD) showed that the country’s livestock sector accounted for 28% of agriculture GDP and is one of the fastest-growing agricultural subsectors. However, it’s highly polluting, emitting roughly 15 million tons of carbon dioxide (CO₂) into the atmosphere per year. By the end of 2022, the pig herd reached approximately 28.2 million, accounting for 63% of the country’s livestock and there were around 13,000 medium- and large-sized commercial pig farms (more than 1,000 heads each) in the country. Meanwhile, the country’s total animal waste hit 81 million tons/year.
Do’s farm was previously blacklisted by the local government for repeatedly breaching environmental regulations by burning and discharging manure-generated biogas into the environment while untreated animal waste caused pollution.
Discharging raw biogas, which contains various impurities such as carbon dioxide (CO₂), hydrogen sulfide (H₂S), and ammonia, causes secondary pollution, Huong said, noting that one ton of methane (accounting for 60%-70% of biogas) is equivalent to between 21 and 27 tons of carbon dioxide in terms of global warming potential.
For that reason, processing animal waste has allowed Do’s farm to stop polluting the environment and generate power. As a result, manure is converted into organic fertilizer and sold to local gardeners, and biogas is used to generate electricity. Most importantly, the liquid from the biogas digesters is reused for fish farming and rice cultivation.
“I’ve been confident each time the local cross-sectoral inspection teams came as my farm met all environmental standards regardless of treated wastewater, processed animal waste, and air pollution,” Do said.
He showed some electricity bills to illustrate the effective model that was recommended by a domestic company specializing in biogas-to-power technologies.
As a result, the farm saves up to 50% of the total electricity costs worth an average of VND200 million (US$8,236) per month and earns an additional VND80 million ($3,294)/month by selling electricity back to the national electricity grid.
Also benefiting from bioenergy, a 6,000-pig farm of Viet Hung Farm Produce JSC in Van Bao Commune, Thanh Tam Village, Thach Thanh District, the central province of Thanh Hoa saved 30%-50% of monthly electricity costs, averaging VND187 million ($7,714)/month after the installation of biogas generators in September 2022.
The well-equipped biogas digester enables the farm to generate electricity almost every day and biogas-fueled electricity helps secure the electricity supply even in the summertime when the country suffers from power outages.
Another example of biogas-to-power on a larger scale is a 50,000-head C.P. Pig Farm in Hung Thi Village, Lac Thuy District, the northern province of Hoa Binh. However, the farm uses biogas generators under the energy service company (ESCO) model, which buys electricity from biogas generators supplied at lower prices. The rental service can save around VND63 million ($2,600) in electricity costs/month not to mention a hybrid solution of biogas and rooftop solar which is underway.
Sharing about biogas generation, Tong Anh Chinh, CEO of Chinh Phat Machine Joint Stock Company which provides ESCO model to C.P. Pig Farm, said biogas is converted into mechanical energy by an internal combustion engine, which drives an electric generator to generate electricity.
Biogas generation has become an effective choice for sizable farms that face limited or unstable grid connection as they are located far away from residential areas or in remote regions as required by Vietnamese law. The system with integrated automatic control and remote monitoring via smart devices makes it easy for farmers to use without worrying about maintenance, the Hanoi-based business executive shared.
Commenting on the system, Ho Thi Lan Huong said it helps tackle problems facing livestock farms when it comes to utilizing biogas for on-site reuse, where waste and residues from one process are used as reusable resources in another cycle. It minimizes pollution and protects water resources, thus advancing circular agriculture.
In terms of social gender impact, those decent-sized farms employ a large number of locals, especially female farmers. An unofficial survey conducted by the Vietnam Biogas Association showed that women make up 70% of the workforce in livestock farms because the work is suitable for them. “It obviously improves local farmers’ livelihoods and somewhat empowers rural female laborers. Remarkably, this kind of ecological farming improves neighborhoods within the local communities by addressing environmental pollution and bringing civilization to the area,” Huong stressed.
While C.P. Pig Farm in Hoa Binh is not worried about investing in biogas generators, Nguyen Trong Do has spent a large amount of money on equipment. It’s estimated that it will take him about a year to see a return on investment (ROI) from the machines. On the other hand, he had no financial support from the government or financial institutions but bank loans which charged him an interest rate of up to 13% per annum at times.
In response to Do’s concern, Tong Anh Chinh blamed the high cost of biogas generators on imports. He said almost all parts of a machine are imported, with prices fluctuating wildly depending on exchange rates and supply markets.
From an energy expert's perspective, Ho Thi Lan Huong pointed out a lack of regulatory framework and planning for the development of bioenergy. There is no feed-in tariff (FIT) – a premium price paid for energy fed into the grid – specifically designed for biogas has been issued so far.
According to Vietnam Electricity (EVN), bioenergy accounted for 0.5% of the country’s total installed power capacity of 77.8 gigawatts (GW) as of end-2022. Meanwhile, the Ministry of Industry and Trade estimated that animal waste likely generates 1,400 megawatts (MW) of electricity. Ho Thi Lan Huong said that in an agrarian country with a strong potential for bioenergy like Vietnam, it becomes crucial to make policies on this type of energy as domestic experts have been drafting documents on tapping biogas in the animal husbandry sector since 1999.
Huong listed four factors that are important to the development of bioenergy, namely planning, taxation, finance, and technology. Specifically, a master plan will provide an overview of the sector and have a long-term vision while it also regulates infrastructure for grid connection and tax on land, resources, and the environment needed to reassure investors. At the same time, the involvement of financial institutions, banks, investment funds, and foreign partners is critically important to support farm owners in the face of disease risks and price fluctuations.
Biogas is not only used for cooking, lighting, and generating power, but also has huge benefits when it is put to produce hydrogen, compressed natural gas (CNG), and as fuels used for automobiles (in Sweden and Denmark), in the opinion of the Sweden-trained expert.
In addition, meat produced under such a circular model would comply with international energy efficiency standards and be a part of worldwide supply chains. The move would open up a huge market for Vietnam’s livestock industry amid the application of the EU’s Carbon Border Adjustment Mechanism (CBAM), a tool to manage the production of carbon-intensive goods being imported into the bloc.
Stakeholders won't begin to tap into that kind of energy until the government has plans and regulations in place, stated Huong.
Regarding financial support, some banks and investment funds have extended green loans. Vu Chi Cong, Head of ESG, VinaCapital, a Vietnam-based investment management firm, said loans to large livestock farms using bioenergy and related businesses would enable them to cut costs and join carbon credit trading.
When it comes to bioenergy solutions, Huong noticed fair competition among stakeholders regardless of investors, biogas generator suppliers, lenders, and supporters, including foreign ones. On this occasion, the expert cited an example from neighboring China that would be relevant to Vietnam.
It is a 10-year project launched in 2010 in the poor rural areas of four Chinese provinces of Heilongjiang, Henan, Jiangxi, and Shandong. The $89-million project funded by the Asian Development Bank and Global Environment Facility aimed to improve the performance of the biogas subsector in the localities where the livestock density was nearly triple the national average and pollution was severe.
The project proved that people in those areas enjoyed improved air quality after it helped treat 4.87 million tons of livestock and agricultural waste to produce more than 126 million cubic meters of biogas for electricity generation.
Back to Vietnam’s situation, Antoine Bonnet, Economist at the Organization for Economic Cooperation and Development (OECD)’s Development Center, said the country’s livestock sector in particular and agriculture in general have huge potential for decarbonization. The emergence of the voluntary carbon market will place both large and small actors on the winning side if they can demonstrate a reduction of their emissions and sell them internationally.
Vietnam would truly be at the forefront of the world’s carbon market if it paid enough attention to bioenergy-focused circular agriculture. It’s an international obligation, the French specialist emphasized.
Echoing Antoine Bonnet, Ho Thi Lan Huong said that once harnessed, bioenergy will help increase agricultural productivity, address environmental issues, and become a huge energy source for Vietnam amidst scarce natural and financial resources on its low-carbon journey.
To make use of this kind of energy, there is a project called Bio-energy for Circular Agriculture (BeCA) launched for 2021-2024 to scale up biogas-to-electricity generation at medium and large livestock farms in Vietnam with affordable, safe, and sustainable energy. Through the Business Partnerships Platform (BPP), the Australian Government supports inclusive business partnerships to promote green and resilient livestock subsector that accounts for one-third of Vietnam’s agricultural output.
This initiative helps leverage resources from different stakeholders namely the Australian Government (DFAT) which contributes catalytic funding, capability building, and standardized practices for national and global recognition.
EGgreen, a Vietnamese eco-engineering firm, installs biogas generation systems and provides an ESCO model that allows farmers to generate electricity. SNV, the Netherlands-based mission-driven global development partner, assists EGgreen with marketing material and product quality control while responsible for emission reduction activities as part of a carbon project.
Nexus for Development, the leading carbon project developer in Southeast Asia, will expand the carbon project component of the partnership, connecting the on-the-ground activities to international carbon markets to drive revenues. Meanwhile, Vietnam-based HD Bank with a high profile in green investment will support EGreen and pig farmers through loans.
According to the project’s involvers, the model would utilize biogas resources and develop carbon credits in a sustainable manner.