B I OM ASS E N E RGY

C O N S UMP TIO N PAT T ERNS

I N C A MBODIA: C H ALLEN GES

A N D O P P O RTUNI TIES

R o m a i n J OYA – G E R E S

APRIL 23RD 2015 RAFFLES HOTEL

PHNOM PENH

Outline

• Objective: to set the context of Biomass Energy in Cambodia and to provide you with some needed background before we actually get into more in-depth discussions later in this break-out session.

1. Main concepts & Significance of Biomass Energy in

Cambodia

2. Current Biomass Consumption Patterns & Challenges

3. Sustainable solutions & related business opportunities

Nota: All the results shared in this presentation come from 2 years of research work undertaken by GERES to bring new evidences to decision makers and projects implementers.

KEY definitions (source: FAO)

• Biomass energy: “material of biological origin excluding

material embedded in geological formations and transformed

to fossil”.

• Woodfuels: “woodfuel refers to all types of biofuels derived

directly and indirectly from trees and shrubs grown on forest

and non-forest lands, from silvicultural activities, harvesting

and logging, as well as industrial by-products”.

BIOMASS ENERGY

Agricultural by-products - Rice husk - Corn cob

Woodfuels

Firewood or Fuelwood

Charcoal Saw dust

Cambodia: One of the highest reliance on

biomass energy in SEA

• Cambodia and Myanmar have the lowest energy consumption per capita in Southeast Asia.

• The significance of biomass energy in the national energy balance is similar in Cambodia, Vietnam and Myanmar.

• Context of Cambodia: unreliable electricity grid with limited coverage and high prices, low enforcement of the forest laws, tremendous land conversions undergoing

→wood is by far the cheapest source of energy than you can find in Cambodia with easy and nearly free accessibility.

0%

10%

20%

30%

40%

50%

60%

70%

80%

%

Share of biomass energy in the total energy consumption

(Source: IEA energy balances)

0

0.5

1

1.5

2

2.5

3

toe/

cap

ita

Primary Energy Supply per capita (Source: IEA energy balances)

Biomass Energy: the 1st energy source in Cambodia

• Biomass energy accounts for 70% of the energy mix.

• Woodfuels (firewood + charcoal + sawdust) account for more than 90% of the final biomass energy demand.

• Primary wood demand = 4.3 million tons annually = 2 million ton oil equivalent

→3 times the energy needs of the transport sector.

• Wood energy = major market for Cambodia (> 350 million USD/yr).

24% 70%

6%

Total final energy consumption in Cambodia, in 2012 (Source: IEA)

Oil products Biomass energyElectricity

75.4%

7.5%

0.4%

0.2%

0.1%

16.4%

Final biomass energy consumption in Cambodia, in 2013

Source: The FloWood project, GERES 2014.

Firewood Rice husk Sawdust

Garment wastes Leaves Charcoal

4730 ktoe 3324 ktoe

TITLE

• Domestic cooking drives more than 70% of the final biomass energy demand.

• Traditional charcoal consumes about one million ton oil equivalent of forest wood

annually!

• …but forest wood demand from industries is on the rise, driven by economic growth.

• Alternative biomass energies (agricultural residues) contribute to only 7 % of the

biomass energy mix although they could potentially replace a significant share of the

wood energy burned if converted in denser materials.

The FloWood project, GERES 2014 Processing: GERES, 2015. All rights reserved.

SMEs & Industry consume 660 thousand

tons of wood annually.

• Wood energy is often the main cost in the business models of the sector studied but also the most reducible if EE measures are taken (contrary to labor cost).

• Existing processes are inefficient, threatening the long term growth, financial viability and competitiveness of key sectors such as rubber processing, bricks for construction and garment.

• Wood scarcity threatens small scale businesses who cannot afford the current price increase or cannot travel to the wood collection areas anymore (small scale food processing.

• Biomass energy users face an abyssal lack of technical assistance that hampers energy efficiency and innovation.

Gasification for ice making (bars & cubes)

7.0%

Cookstove firing 0.4%

Brick manufacturing

27.8%

RSS & ADS rubber

processing 1.6%

Fish smoking 6.2%

Tobacco curing 5.4%

Small scale food

processing 6.6%

Garment factories

45.1%

Wood energy consumption in SMEs / Industries Source: The FloWood project, GERES 2014.

Gasification in rice milling

34%

Gasification for ice

making (bars & cubes)

1% Cookstove

firing 3%

Brick manufacturin

g 36%

Small scale food

processing 17%

Salt refining 9%

Rice husk final consumption in SMEs / Industries Source: The FloWood project, GERES 2014.

Impact of woodfuels on forests

• Last GERES’ estimates: 88% of woodfuels are coming from natural forest

→ (only 12% from farming lands, plantations, orchards, hedges; etc.).

• The impact of woodfuel collection on forests is very heterogeneous throughout

the country, either being a direct driver of degradation/deforestation or an

opportunistic activity depending on other drivers such as forest conversion to

agricultural land (e.g. ELCs)

• Industrial activities being more concentrated in geographically restricted areas,

they locally drive drastic amounts of wood from Cambodian forests.

0

100,000

200,000

300,000

400,000

500,000

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

hec

tare

s

Hectares of ELCs granted in the last 20 years (LICADHO, 2015)

→ The wood energy sector is currently benefiting from the tremendous forest area being recently clear-cut through ELC granting (prices are artificially low!) but this cheap sourcing might come to an end in the coming years.

RGC’s moratorium

3 main levers of action

• Need to address the biomass energy value chain as a whole, from forest and

field to end users:

– 1: energy efficiency

• Provide technical assistance for better process management

• Improved technologies (multi-layer rubber dryers, VSBK brick kilns,

ICS, etc.

→See coming presentation from NCPO-C...

– 2: Improved conversions

• Improved charcoal kilns

• Improved wood gasifiers or switch to RH gasifiers (for ice factories) to

generate cleaner captive power

– 3: Fuel switch to renewable sources

• Woodfuels from sustainably managed forests

• Agroforestry / Wood plantations on already degraded lands or public

areas.

• Development of Waste Agricultural Biomass Energy

→See coming presentation from SGFE.

Focus on fuel switch:

what about Agricultural by-products?

• 6% of the Agri by-product potential being used.

• 14% of the national rice husk production being tapped.

• Wood prices are soaring → Agricultural by products might become competitive.

• Agri. by-products are bulky (e.g. low density of rice husk),→high transportation cost.…

• …BUT high potential if converted into a denser material.

• Careful:

– Potential ≠ accessibility

– Competition with feedstock

– WAB can contribute to maintain soil fertility and limit erosion

0

20,000

40,000

60,000

80,000

100,000

Potential of WAB Current biomass energy supply

TJ

Current biomass energy supply vs alternative potential from Agri by-product in 2013)

Sources: The FloWood project, GERES 2014. NCPO-C, 2013.

Wood Corn cobs

Cassava residues Rice husk

Rice straw Bagasse from sugar can processing

Saw dust

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

2

4

6

8

10

12

14

2009 2010 2011 2012 2013 2014

An

nu

al c

han

ge in

fir

ew

oo

d p

rice

USD

/m3

of

wo

od

Average price of firewood in Kampong Cham province

% Increase from year to year

Firewood price (USD/m3)

Focus on Rice husk: a largely untapped

resource despite a significant potential.

• Contrary to non-properly managed

forests, agricultural biomass is carbon

neutral and renewable.

• Rice mills concentrate rice husk from

hundreds of farms and are widesread

throughout the country

• Rice husk is well valorized in some

countries (e.g. India).

A heap of rice husk next to a rice mill in Bantey Manchey

Rice husk Briquettes Rice husk pellets

Engagement of the private sector

• Engagement of the private sector will be crucial in ensuring the

long-term viability of some key sectors in Cambodia.

• Private sector interventions should focus on the following:

– Financial Institution Engagement: engage with commercial banks, specialized banks, and

MFIs and provide incentives for the development of tailored loan products to facilitate

access to suitable technologies such as improved kilns & stoves, efficient gasification and

biomass briquetting technologies.

– Business-to-business (B2B) services: to bridge the existing information asymmetry

associated with adoption of improved technologies (e.g., availability of technologies (off-the-

shelf solutions or new technologies), manufacturing information, quality, lifespan etc.) and

associated cost analyses (e.g. return on investment, etc.).

– Development of sustainable, community charcoal businesses: follow-on projects undertaken

by GERES. Refinement of the business model of community charcoal businesses, support in

business planning, technical training on kiln technologies and sustainable fuel sourcing, and

downstream activities to raise awareness and effectively market sustainable charcoal.

– Tax incentives/ deductions: Design and extend tax incentives/ deductions to encourage

adoption of improved technologies and alternative fuels, and to support the ongoing

development, strengthening, and competitiveness of “green” enterprises.

THANK YOU

• Questions?

Romain JOYA - r.joya@geres.eu

http://www.geres.eu/en/

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of Eurocham Cambodia and can in no way be taken to reflect the views of the European Union.