Harnessing Cloud-Based Technology for Enabling Biomass Supply Chain

Bio-energy can help meet global emission reduction targets by mitigating growing emission concerns. While the opportunities in the sector are immense, a digital platform holds all answers to making the supply chain more structured, organised and dependable.

May 31, 2023. By News Bureau

Bio-energy has been accepted as a promising and sustainable solution to climate change. It is expected to significantly mitigate growing emission concerns and help meet global emission reduction targets. With this agenda, the biomass supply chain assumes critical importance in the success of bioenergy adoption.

In an agrarian country like India, every year, there is a minimum of 235 million MT of surplus agri-residue available in the farms. This is equivalent to 125 million MT of coal or 600 million barrels of crude oil, which is nearly 25 percent of India’s oil imports. As much as 17 percent of the country’s energy needs could be met from this surplus agri-residue. The biomass opportunity in our country is big enough to potentially power a 40-billion-dollar economy. To realise the full potential of this opportunity, we require to establish an end-to-end farm to fuel the ecosystem. Given the tenuous nature of the rural-industrial connect, this would require enormous efforts to organise and enable all stakeholders in the biomass supply chain.
 
Addressing Biomass Supply Chain Opportunities
 
 
Fragmented Supply
 
An average Indian farmer holds about 2 acres of farm size producing about 4 MT of biomass every season. For an aggregation of 235 MT of biomass annually, we are looking at collecting it from 25 million farmers from about 50 million acres of farmland. Evacuation, transportation, storage, supply and payments at such a massive scale need technology intervention.
 
Farmer participation
 
The heart of this supply chain is the farmer, who is the (accidental) producer of agri-waste.
 
The farmer has only a small window to clear his farm before the next sowing phase. He also requires to put in his own money for hiring equipment and transport for removal & transport of the agri-waste, to be able to sell it further. In most cases, the actual economic realisation may be lower than the cost he incurs. The easier approach adopted therefore is to burn the waste. It saves him both, time & money but takes a toll on soil nutrients and pollutes the air.
 
The success of the supply chain, therefore, depends on how easy and inclusive it is for him to participate. Incentivising every single farmer – big or small and giving him equal market access to become an integral stakeholder of the supply chain is the key to his participation.
 
Countering Seasonality
 
Biomass is available for only a limited time in a year at the time of harvests, while supply is required all year round. This requires creating biomass storage and comes with it – the storage cost. All of this requires working capital. The existing lending framework makes it difficult for a small farmer or a rural business to avail of working capital at competitive rates. Small rural businesses, therefore, do not become viable with the high cost of working capital. Easy access to micro-finance would therefore be the game changer here to facilitate biomass storage.
 
Digitally Enabled Rural Enterprises
 
In the absence of supply chain optimisation, the cost of aggregation goes up. Since biomass is voluminous, it is difficult to transport. Therefore, densification, as close to the point of source, will be the efficiency driver. Rural enterprises can be engaged in the densification of biomass. What we need is to create such businesses, close to rural pockets which are of industrial nature. Creating an industrial culture would ensure a dependable supply of raw material and economic efficiency.
 
A cloud-based framework that puts together farmers, transporters, small rural businesses and large industrial consumers could mean a solution to integrate the fragmented rural participants with the industry and create one seamless supply chain.
 
A participative model that engages producers (farmers), service providers (tractor owners) and rural enterprises (storages and briquette makers) can potentially create a rewarding ecosystem in rural areas. Digitalisation in this case is not only bringing these participants together but also creating a dynamic marketplace that could help invigorate the local rural economy. 
 
The model makes it possible to create transparency in transactions and visibility to stakeholders such as financial service providers. In one stroke, this can eliminate the “under-the-radar” syndrome that ails rural transactions. Organised finance companies can potentially take lending decisions based on data about buyers, sellers, transactions, and the associated analytics.
 
For small rural businesses, the digital framework also provides an opportunity to have an efficient and easy-to-understand business management system. This can potentially be a game changer in helping them scale up. Organised rural businesses that implement standard operating process will be able to create employment similar to organised companies in industrial areas. 
 
Trust Framework
 
When you have a supply chain that is as diverse as this, trust and reliability can also be driven by digitalisation. For example, if one uses artificial intelligence (AI) to determine the quality which is being supplied, a lot of small problems can be addressed to safeguard liability interest.
 
Similarly, IoT-enabled field testing devices can be used to get online quality approvals on the go even before shipments, thereby building more trust & transparency in the supply chain.
 
Nudge to Carbon Markets
 
Another aspect to touch upon is carbon credits. The digital platform framework can play a vital role in the distribution & monetisation of carbon credits. Using technology such as blockchain, a digital platform allows you to create a system where everything can be tracked, right from which farm supplied the biomass, or if the biomass was from a deforested or agricultural source. Such an audit-based verification mechanism is key when one is investing in using green energy. The benefits could be passed down to the last mile – back to the farmer and this can only be achieved through digitalisation.
 
While the opportunities in the sector are immense, a digital platform holds all answers to making the supply chain more structured, organised and dependable.

With increased data intelligence and informed decision-making, stakeholders of the biomass supply chain can assure predictability, certainty, and standardisation – much needed for accelerating biofuel adoption across industries.

 
- Suhas Baxi, Co-Founder and CEO, BiofuelCircle
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