More than 40 million people remain without access to electricity in Pakistan, while businesses experience productivity losses due to power shortages. Consequently, the energy shortages have contributed to sluggish GDP growth and distress for the everyday household consumer in Pakistan. The country is rapidly urbanizing and energy demands are increasing. However, demand has far outpaced supply, especially in rural areas where power outages are significantly more prevalent. Moreover, the country’s primary energy supply is derived from oil and natural gas. With fuel prices inflating worldwide, the current energy mix is no longer feasible or sustainable. It has become imperative to explore alternate energy options that can be instrumental in addressing the current energy crisis and supporting long-term sustainable growth.

Biomass is a viable option, being an easily accessible source of energy with its unique environmentally friendly nature, constant supply, wider availability, and ease of integration into existing infrastructure[1]. This energy is derived from plant and algae-based materials, with bioenergy technologies converting carbon from biomass and waste into low-emission transportation fuels and renewable power. From a broader perspective, it not only offers versatile solutions to various energy needs but also exploits resources and by-products of indigenous economic activities of rural economies; promoting sustainability and improved livelihoods.

As of 2022, India has installed a bioenergy capacity of 20 MW, and as a result, an estimated 0.43 million direct jobs and 0.66 million indirect jobs have been created in the economy. In the developed world, Europe stands as a global leader in contributing to bio-based energy production, generating approximately 30.9 billion m3 of biogas in 2018, representing over half of the world’s total biogas production[2]. The global biogas market is expected to grow to USD 37 billion by 2028, with vast opportunities for developing economies such as Pakistan to take advantage.

Biomass energy holds significant promise in Pakistan’s renewable energy landscape. While it is already being used for small-scale electricity production, there is huge untapped potential. Rural areas in Pakistan are rich in various biomass resources. Around 121 million metric tons of agricultural residues, 427 million metric tons of animal manure, and 7.5 million metric tons of municipal solid waste are produced annually. These resources have the potential to generate approximately 20,709 MW of bio-electricity and 12,615 million cubic meters of biogas annually, enough to meet the energy needs of 28 million rural residents[3].

While Pakistan aims to establish renewable energy plants capable of generating 10,000 MW by 2030, the utilization of biomass energy sources for electricity production remains underdeveloped. Only 92 biogas plants are operational, generating approximately 790 KW of electricity.

In Pakistan, the utilization of biomass resources faces several challenges. Firstly, these resources are often scattered, making feedstock acquisition a logistical challenge. Transporting wet biomass over long distances is inefficient and costly due to its moisture content. Equipment shortages, including a lack of biogas testing and analysis infrastructure and limited availability of localized commercial-scale biogas solutions and technologies, hinder progress.

Additionally, biofuels generated from agricultural residues are only available during the crop-harvesting season, necessitating storage to meet demand during off-seasons. The seasonal production of biomass results in inconsistent supply, leading to seasonal volatility in fuel prices.

Furthermore, limited access to finance is a significant barrier, with financial institutions lacking the expertise to assess waste-to-energy projects, resulting in a reluctance to develop specific financial products for biogas projects. SMEs are often discouraged due to the risk premium loaded onto finance products for such projects.
Moreover, the absence of regulatory and institutional support compounds the issue. Standardized procedures for commercial-scale biogas facilities are lacking, as are mechanisms for pricing and managing biogas feedstock, resulting in an underdeveloped market and value chains.

However, there are promising avenues for tapping Pakistan’s bioenergy potential. Small and Medium Enterprises (SMEs) in the dairy, poultry, and farming sectors have access to abundant feedstock, which can be utilized for in-house biogas production to meet their electricity and gas needs. Furthermore, decentralized biogas plants prove especially beneficial for meeting off-grid power needs, and serving individual dairy and poultry plants, as well as dairy cooperatives. These installations can replace costly diesel gensets commonly used for various farm activities.

Several medium to large-scale industries have already initiated the installation of commercial-scale biogas plants. For instance, prominent dairy farms like Sarsabz Dairy Farm, JK Dairies, and Engro Dairy Farm Nara are among the largest biogas producers, collectively exporting approximately 4.97 GWH of electricity to the grid annually[4].

Existing biogas technology initiatives in Pakistan have demonstrated potential and can be scaled up and replicated. For instance, the Nestle Biogas project focused on using cow manure for biogas production to meet on-farm electricity needs. This private sector-led model aimed to reduce diesel usage by 25-35% by establishing 5 biogas plants. The financing model was based on diesel cost savings, with annual emission reductions achieved through improved animal manure management. Nestle and Engro aimed to scale the project through co-financing and collaboration with milk processing companies. Another notable project is the Chawala Aluminium Industry Biogas Plant in Lahore, which utilizes cow dung and vegetable waste as feedstock. Since its commissioning, this plant has generated approximately 1,663,200 m3 of bio-methane.

To upscale the current potential, government-led interventions such as fiscal incentives such as tax rebates, and subsidies are needed for advancing small, medium and commercial-scale biogas plant development. Furthermore, it is critical to establish regulatory governance on feedstock management and pricing mechanisms, quality and performance standards, and also harmonize institutional processes for renewable energy-based distributed generation projects.

On the private side, sustainable business models need to be established, along with financial models and instruments to de-risk investments in biogas projects. Hence, demonstrating the technical and financial viability of commercial-scale biogas projects is crucial through piloting medium to large-scale plants for electricity and gas generation, either through public-private partnerships (PPP) or build-operate-transfer (BOT) models.
Furthermore, the technical capacity gap needs to be addressed. At a macro-level, research initiatives should focus on providing sectoral analysis for agricultural and dairy segments, along with standardized technical specifications and procedures for setting up biogas plants. Data collection and monitoring mechanisms also need to be established to support research and development activities.

At a micro-level, local capacities in the installation, operation, and maintenance of biogas plants need to be developed among rural communities. In addition, similar interventions must also consider promoting the localization of waste-to-energy technologies. Moreover, biogas supply chain management needs to be developed, including the establishment of feedstock collection centres.

Through coordinated efforts of policy makers, technology suppliers, financial institutions and development partners, the biogas market can be developed at a wider scale in Pakistan, thereby diversifying the country’s overall energy mix and contributing to its sustainable energy development.

This article was first published in Dawn supplement on 21^st September 2023.

[1]Saghir, Muhammad, 2019, “Unlocking the Potential of Biomass Energy in Pakistan” (https://www.frontiersin.org/articles/10.3389/fenrg.2019.00024/full)
[2]Liaquat, Rabia, and Muhammad Ali Qureshi, “Biogas: An Overlooked Piece in the Renewables Puzzle in Pakistan”(https://pfan.net/wp-content/uploads/2021/12/BioGas-Agenda-FINAL-2.pdf)
[3]Khan, Sawar and Ayesha Nisar, 2022, “Bioenergy production in Pakistan: Potential, progress and prospect”(https://www.sciencedirect.com/science/article/pii/S0048969721079511?via%3Dihub
[4] Liaquat, Rabia, and Muhammad Ali Qureshi, “Biogas: An Overlooked Piece in the Renewables Puzzle in Pakistan”(https://pfan.net/wp-content/uploads/2021/12/BioGas-Agenda-FINAL-2.pdf)