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Waste Recovery Plant

Integrated technology for the thermal

decontamination, disposal, and mass-

reduction of high moisture content

waste (sewage sludge, municipal solid

waste, RDF STABLE waste) with energy

profits (green electricity production)

and phosphorus recovery

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1. Introduction.......................................................................................5

1.1. Market Analysis, Identification of Potential MarketsHiba! A

könyvjelző nem létezik.

1.1.1. The Domestic Market as a Minimal Market ...... Hiba! A könyvjelző

nem létezik.

1.1.1.2. The Criteria for Potential Foreign Markets... Hiba! A könyvjelző

nem létezik.

1.1.2. Product Description(planned capacity, the technology it can

serve) 14

1.1.2.1. The Effects of Composting Municipal Sewage Sludge and Other

Organic Waste Compared to Thermal Disposal. . Hiba! A könyvjelző nem

létezik.

1.1.2.2. The Technical Content and New Features of the Developed

Equipment............................................. Hiba! A könyvjelző nem létezik.

1.1.3. Potential Buyers.......................................................................... 20

1.1.3.1. What is the capacity of plants we are able to serve? ............. 20

Mono-incineration of Sewage Sludge Hiba! A könyvjelző nem létezik.

Co-incineration of Sewage Sludge and RDF Waste ........................... 21

Co-incineration of Fermentation Residues and RDFHiba! A könyvjelző

nem létezik.

1.1.3.2. Potential Domestic Customer Base...... Hiba! A könyvjelző nem

létezik.

1.1.4. A Select Summary Analysis of the 5 Most Promising Markets Hiba!

A könyvjelző nem létezik.

1.2. Summary of the Analysis of Comparable Life-CyclesHiba! A

könyvjelző nem létezik.

1.3. Analysis of Regulations. The Legal Framework for Disposal of

Sewage Sludge ......................................................................................................... 30

1.3.1. EU Regulatory Environment......... Hiba! A könyvjelző nem létezik.

1.3.2. The Regulatory Environment in Hungary .. Hiba! A könyvjelző nem

létezik.

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Existing National Legislation on Sewage SludgeHiba! A könyvjelző

nem létezik.

1.3.3. The Regulations of Other Countries .......... Hiba! A könyvjelző nem

létezik.

1.3.3.1. The Regulatory Environment in Germany.... Hiba! A könyvjelző

nem létezik.

Waste Recovery Act /Das Kreislaufwirtschaftsgesetz (KrWG) /Hiba! A

könyvjelző nem létezik.

Sewage Sludge Regulation/ Klärschlammverordnung (AbfKlärV). Hiba!

A könyvjelző nem létezik.

Limit Levels ....................................................................................... 34

Manure Regulations /Düngemittelrecht/Hiba! A könyvjelző nem

létezik.

Fertilizer Mix Regulations (DüMV) ..... Hiba! A könyvjelző nem létezik.

Federal Emissions Regulation /Bundes-Immissionsschutzverordnung

BImSchV/........................................... Hiba! A könyvjelző nem létezik.

1.3.3.2. The Regulatory Environment in Bulgaria...... Hiba! A könyvjelző

nem létezik.

Precise Regulation Issues in Bulgaria and the Deviations from EU

Directives:.......................................... Hiba! A könyvjelző nem létezik.

Other Related Regulations:............................................................... 38

Sewage Sludge Treatment and Waste Related Regulations:Hiba! A

könyvjelző nem létezik.

1.4. The Process of Obtaining the Required Licenses for the Market

Entry of the Equipment.....................................Hiba! A könyvjelző nem létezik.

1.4.1. Directives/Other General Requirements for the EU . Hiba! A

könyvjelző nem létezik.

1.4.2. The Licensing Process in Hungary ..... Hiba! A könyvjelző nem

létezik.

1.5. Cost-Benefit Analysis...........................Hiba! A könyvjelző nem létezik.

1.5.1. Description of Business Process and Identification of Participants

Hiba! A könyvjelző nem létezik.

1.5.2. Overhead Costs for the Use of the Equipment.. Hiba! A könyvjelző

nem létezik.

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1.5.3. The Benefits of Integrating the Equipment into Existing

Technologies ............................................. Hiba! A könyvjelző nem létezik.

1.5.4. Additional Information on the Analysis of International Markets

Hiba! A könyvjelző nem létezik.

1.5.5. Investment Costs ......................... Hiba! A könyvjelző nem létezik.

1.5.6. Some Versions of Implementation of the Cost-Benefit Analysis

Hiba! A könyvjelző nem létezik.

1.5.7. Figure – Value Chain .................... Hiba! A könyvjelző nem létezik.

1.6. Business Plan .........................................Hiba! A könyvjelző nem létezik.

1.6.1. Resources .................................... Hiba! A könyvjelző nem létezik.

1.6.1.1. Organization and People ........ Hiba! A könyvjelző nem létezik.

Project Leadership............................................................................ 49

Technical Development ..................... Hiba! A könyvjelző nem létezik.

Business Development ...................... Hiba! A könyvjelző nem létezik.

1.6.1.2. Financial Resources ................ Hiba! A könyvjelző nem létezik.

1.6.1.3. Production Capacity................ Hiba! A könyvjelző nem létezik.

1.6.2. Business Processes ...................... Hiba! A könyvjelző nem létezik.

1.6.2.1. Sales Processes ....................... Hiba! A könyvjelző nem létezik.

1.6.2.2. Purchasing Processes.............. Hiba! A könyvjelző nem létezik.

1.6.2.3. Production Process ................. Hiba! A könyvjelző nem létezik.

1.6.2.4. Quality Assurance................... Hiba! A könyvjelző nem létezik.

1.6.3. Potential Clients, Customers........ Hiba! A könyvjelző nem létezik.

1.6.3.1. Customer Profiles ................... Hiba! A könyvjelző nem létezik.

1.6.3.2. How can we acquire customers? ......... Hiba! A könyvjelző nem

létezik.

1.6.3.3. The Economic Viability of the Disposal of Certain Waste

Mixtures (Attainable Results) ................ Hiba! A könyvjelző nem létezik.

1.6.3.4. The Factors Influencing the Attainable Results for the Use of

the Equipment and Technology

………………………………………………………………………………………………59

Phosphorus in the Ash ....................... Hiba! A könyvjelző nem létezik.

1.6.3.5. The Potential Results of Using Some Waste Mixtures.... Hiba! A

könyvjelző nem létezik.

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Mono-incineration of Sewage Sludge Hiba! A könyvjelző nem létezik.

The Co-incineration of Dewatered Sewage Sludge and RDF Waste

.......................................................... Hiba! A könyvjelző nem létezik.

Co-incineration of Fermentation Residues from Digestion and RDF

Waste ................................................ Hiba! A könyvjelző nem létezik.

1.6.3.6. The Payback Period for Each Variation /Method ........... Hiba! A

könyvjelző nem létezik.

1.6.4. Sales Channels ............................. Hiba! A könyvjelző nem létezik.

1.6.4.1. Sales in Hungary ..................... Hiba! A könyvjelző nem létezik.

1.6.4.2. Sales in Foreign Countries....... Hiba! A könyvjelző nem létezik.

1.6.4.3. Marketing strategy ................. Hiba! A könyvjelző nem létezik.

1.6.5. Financial Planning ........................ Hiba! A könyvjelző nem létezik.

1.7. The Development of an Intellectual Property Protection and

Industrial Property Rights Strategy ............Hiba! A könyvjelző nem létezik.

1.8. Achieving Potential Customers and PartnersHiba! A könyvjelző nem

létezik.

1.8.1. Workshop Experiences ................ Hiba! A könyvjelző nem létezik.

1. Introduction Sewage sludge and other residual waste materials need to be decontaminated and disposed of. Current methods include landfilling or collection in a storage facility. These methods have their drawbacks, which have only become apparent recently. Sewage sludge is an organic waste that poses certain risks and can be harmful to both humans and animals. It contains pathogens (bacteria, mold), poisonous inorganic materials, pharmaceutical waste, and other residual waste materials, as well as heavy metals such as: Hg, Pb, Cd, Co, etc. A variety of problematic and hazardous materials can enter and accumulate within soil through the use of sewage sludge. Through agricultural spreading of sewage sludge these unnaturally enriched pollutants enter the natural cycle and harm the living

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environment. „In everything that is bad, there is a little good,” – goes the saying; that is, if the residual materials are available in a relative concentrated form, more efficient disposal strategies can be considered, such as the incineration and elimination of drastically mass-reduced residual waste. Fundamentally, we do not wish to associate the term incineration with elimination because in our case incineration becomes thermal material conversion! Based on previous experiences and using legally owned patents and patent applications, BIOMORV Incinerator Development, Production and Operations Ltd. (BIOMORV Kazánfejlesztő, Gyártó és Üzemeltető Zrt. headquarters: 8975 Szentgyörgyvölgy, Kossuth L. u. 34., postal address: 1085 Budapest, Kisfaludy u. 28/a. 2/2.) sees an opportunity to develop disposal equipment suitable for the mono-incineration of dried and mechanically dewatered sludge mixtures:

o no transport; disposal occurs at location of waste o incineration should not require the use of fossil fuels o the combustion process generate surplus energy o compliance with waste incineration requirments (emissions,

combustion temperatures) during operation of the equipment o can be connected and integrated into applied wastewater

treatment technologies

Eger’s wastewater treatment plant creates 10 000 tonnes of mechanically dewatered sewage sludge (20% solids content) annually. Previously, the plant consumed a significant amount of natural gas and electricity using a Sulzer-type dryer to dry the residual waste and reduce its mass. They then transported the dried waste to a storage unit. This practice not only used a considerable amount of energy and money, but the resulting sewage sludge it created was also unusable. The wastewater treatment plant searched for cheaper method of disposal. Equipment which achieved this goal – equipment that BIOMORV Ltd. developed from its own resources – was installed at the Heves County Waterworks Company’s wastewater treatment plant on Kőlyuk Street in Eger. In addition, the installed equipment uses wood chips and wood pellets, which are not more than 10% of the biomass of the sewage sludge, as combustion fuel.

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We carried out tests and experiments to properly adjust the equipment and determine the optimal ratio and operating parameters of the fuel intake (sewage sludge, wood chips, pellets). Permission for the sewage sludge disposal test, in which 19.9 tonnes of dried sewage sludge would be incinerated, was granted by the North Hungarian Environment, Nature Conservation, and Water Management Inspectorate’s (ÉMI-KTVF) 219-15/2013 decision. Since the incineration plant possesses a point source, the Inspectorate also issued an air quality protection permit 1936-2 / of 2013 to establish point source pollutants. The test results were in compliance with legal requirements. The combustion tests proved the following:

- Through mono-incineration of sewage sludge the equipment is able to decontaminate and dispose of harmful and dangerous organic waste (and its mixture) where:

o the dry matter exceeds 51%. o where the calorific value applied to the entire mass exceed

6M/kg o The ratio of ash is less than 30%

- Inspection of the remaining ash following decontamination proved

that it contained many elements that are beneficial to plants. (P,K,Ca, and the minerals Zn, Cu, Fe, Mn)

- The amount of heavy metals (Cd, Hg, Pb, Co, Mo) is below the limits prescribed for dry matter compost fertilizer for agriculture spreading.

On the one hand this shows that the developed equipment is widely

suitable for the disposal of hazardous organic waste while recovering

energy in the process. On the other hand, the useful valuable materials

the ash contains can be utilized for agricultural or other uses. (Particularly noteworthy is phosphorous. Tests show phosphorous content in the ash exceeds 15% during the mono-incineration of sewage sludge. We are in the process of developing suitable extraction methods). Thus, the sewage sludge incineration plant in Eger is within the European directives and ordinance concerning the treatment of hazardous sewage sludge.

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In addition to this, there is an opportunity for thermal and electric energy to be tapped during combustion and through this we can produce traditional forms of energy. Altogether, incineration contains many potential environmental advantages. The equipment in Eger can be seen a potential guide in the noted improvement of the environment, including the state of soil, water, and air, when it comes to the decontamination of sewage sludge, which is a very real problem for the Danube Region Strategy. This potential opportunity could have an effect on the following ecological and economic aspects:

- Decontamination: prevents the hazardous materials in sewage sludge

from contaminating drinking water through agricultural spreading

and also prevents the absorption of these harmful substances into food

and feed.

- The energy created can be applied and used for various inner and outer processes, for example low-emission and energy efficient drying of sewage sludge, that is, the amount of waste decreases.

- The project brings together scientists from Hungary and Baden-

Württemberg with a common goal of winning support for medium-sized businesses and affordable technologies of the future, and introducing and distributing these technologies to markets in Europe and the Danube Region.

- The created value of using regional thermal recovery of BIOFIVE - ENTECCO processes will remain in the regional towns/villages.

- The utilization of thermal treatment in sewage treatment plants does

not require the instillation of further decontamination

equipment.

- The plant in Eger serves as a model for similar sewage sludge incineration plants in the Danube region. The energy consumed to dry the sludge would no longer be required because transport of the

sludge would no longer be required, thus the transport of the CO2 load of the sludge within the incineration plants or cement factories is unnecessary considering the sludge is dried and burned on site.

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- The incineration equipment is modularly-constructed and is able

to accommodate the size and composition of the proposed waste; in addition to wet, dry or fermented sewage sludge, wood chips (non-contaminated biomass) or municipal solid waste chips, also known as substitute fuel source (municipal shredded waste, SRF stabilizers) can also be used.

The equipment is endowed with many new innovations (L.1.1.2) and the process is both innovative and involves direct profit (surplus revenue as well as energy and cost savings) for the following reasons:

- no waste preparation is required

- waste is not transported to a disposal site, rather the disposal equipment is installed at the waste’s place of origin (we connect and integrate the equipment onto the existing technology) and with this we eliminate the need to transport the waste multiple times and reduce the environmental risk because of this;

- the production of energy from disposal does not consume any kind of fossil fuel energy;

- the remnants of the incinerated matter contain some valuable and useful materials which are extracted and recovered; after this, the mass, less than 5% of the original mass of the waste, which can be not be used for anything, is landfilled . (All the ash produced in current incinerators is landfilled.)

Current Status The prototype of the equipment is finished and is ready for operation. Tests have shown that it meets the current guidelines for waste incineration. On 1 January 2014 there were many regulatory and administrative changes in environmental, conservation, and water conservation governance. The North Hungarian Environment and Conservation Inspectorate (ÉMI-KTV) became a first tier environmental authority. BIOMORV Ltd. received a permit (EWC 190805) 38-15/2014 to dispose of the waste from the municipality’s water treatment plant on September 30, At our request

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14346-10/2014 (November 28, 2014), the Inspectorate suspended their air quality investigation (diffuse sources of stationary air pollution – KTJ 102500986) for a period of six months starting on December 29, 2014 (continuous – through online connections with authorities until the

installation of emission measuring

equipment). On November 14, 2014, Eger Town Council suspended the approval process for air purity protection until the granting of a permit. (16454-12/2014.) Compliance with the permits was last inspected by EMI KTF on March 4, 2015 under the registry number 6160-1/2015.

The instillation of the abovementioned emission measurement equipment is underway; therefore, the plant will soon be in operation. For the National Water Directorate, we prepared and finalized the text, „A strategic review of the contractual framework for sewage sludge utilization and disposal project development concepts” in which the following determinations concerning the incineration of sewage sludge are made:

„„There are 10 companies that hold D10 permits (waste

incineration on land) and are licensed to incinerate the sewage

sludge originating in the settlements of the EWC 18 08 05; while 9

companies are licensed to use waste for the purpose of heating

energy (R1 is primary or combustion as a fuel or other means to

generate energy). Of these companies, the mono-incineration of

sewage sludge occurs at the Eger Water Treatment Plant with the

2- 2,4 MW BIOMORV incinerator (1t/h) that had a 19 t trial run

in 2013 and received its waste management permit at the

beginning of 2014.

In 2012, 1,337 t of sewage sludge was incinerated in Sajóbábony’s

hazardous waste incinerator. The remaining incineration plants

do not accept municipal sewage sludge.” (Noteworthy: the next

Figure. 1 Plant in Eger

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dimension of the forthcoming incinerator on the drawing board

has a 2.4 MW capacity)

1.1. Market Analysis, Identification Of Potential

Initial Markets The equipment is suitable for an environmentally-friendly, integrated process of sewage sludge waste disposal and thermal utilization. The production of green energy is possible through the connection of additional equipment (ORC). The resulting ash contains many useful materials (e.g. phosphorus) that can be extracted. Comparing the equipment with other technologies is difficult, because – to our knowledge – there is no other equipment on the market that can produce 1-5 MW of profitable energy without the use of fossil fuels and generate surplus energy while incinerating waste within the parameters of accepted guidelines. All of this is due to our patented innovative process. The equipment is able to utilize many hazardous wastes as fuel (e.g. mechanically dewatered sludge or solar or conventionally dried sludge; dried and decanted fermentation residue; mechanically dewatered sewage sludge and RDF waste.) Dependent upon the composition of waste material that is planned for the use of fuel and the disposal objectives, the current equipment (1.6 MW performance) could provide solutions for a variety of larger municipalities (50-250 thousand inhabitants). The plant at Eger, which was developed as a pilot project, produces a maximum of 1.6 MW of thermal energy per hour. Depending upon the composition of the disposed waste, it uses 0.6 – 1.1 t of substratum (waste) with a maximum water content of 49%. It is capable of burning mixtures with a projected calorific weight of 6 MJ/kg. The resulting ash at the end of the process is 10 -15% (depending on the material) of the dry matter input. The incineration of sewage sludge is subjected to stringent regulations (800-850 °C start-up temperature and at least 2.5 seconds of combustion in the afterburner at 950 °C as well as strict emission controls). Until now, only mixed combustion incinerators or special waste incinerator plants could meet these requirements. Only the Biofive-Garantfilter can dispose of 15- 20,000 t of this type of waste while adhering to prescribed guidelines.

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The equipment can achieve every parameter that the “large” incinerators can ensure. In addition, its onsite waste decontamination capabilities give it a distinct advantage over its competitors because it is able to eliminate many environmental risks including: (bulk transport, the storage of hazardous bulk waste, odor, dust, etc.). Among safe methods of waste disposal, the Biofive-Garanfilter Plant® - to our knowledge – is the only one that does not use fossil fuels and is able to produce energy without them, energy that can be utilized by water treatment plants resulting in the achievement of a considerable energy savings. Another advantage of the equipment is that its operation does not require significant expertise and requires little space. All the equipment is automatically controlled and the technology is closed. These features make it possible for the wide use of the equipment.

1.1.1. A Strategic Approach to Market Determination We will focus our future market knowledge on our “incinerator unit”, which requires all of our financial and intellectual resources and only after a longer-term test run can we allocate larger resources to market determination. Unfortunately, we have not secured the needed resources to make this possible. Thus, we have had to use and rely upon our own knowledge and resources.

1.1.1.1. The Domestic Market as a Minimal Market

Our primary market is definitely Hungary, particularly in major sewage treatment

plants involved in digestion and biogas production. The waste that needs to be

disposed in such plants can be:

- Decanted (30% dry matter) and a mixture of dried fermentation

residue - Decanted fermentation residue and RDF waste

The co-incineration of mechanically dewatered sewage sludge and RDF waste can be utilized in those wastewater treatment plants that do not have

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digestion (biogas). (With this, the complete organic waste disposal problems of a municipality with a population of 30,000 can be solved.)

1.1.1.2. The Criteria for Potential Foreign Markets There are major regulatory differences in the European Union for the decontamination, disposal, and usability of organic waste. This is especially noticeable when it comes to the practice of implementation. Perceptions concerning the environmental impact of organic waste management also vary. According to Eurostat Data services there is much uncertainty and contradictions are not uncommon. Individual countries have differing interpretations the EU resolutions and of the principles set out in its recommendations; since there is no mandatory requirement to do so, these interpretations often do not even appear in a country’s laws and regulations, or if they do, they are often misinterpreted. We consider as potential markets those countries in Europe where:

- there is a currently high rate of organic waste dumping or landfilling - compliance to the relevant EU resolutions, fees, and levies lead to

relatively high landfill costs - a low ratio of organic waste incineration currently exists - stringent environmental load limits exist (permissible values for

heavy metals, etc.). The European Union issued a recommendation on how to calculate the landfill fee (also known as the gate fee): Taking this into account, this minimum value ranges from 30 to 35 €/t. Some countries have established fees that are significantly lower than this. Though it runs contrary to the “polluters pay principle,” government willingness to accept and absorb a substantial portion of the fee is one of the ways this becomes possible. Of course, lowering expenses can also be achieved by disregarding environmental regulations concerning landfills and decontamination. It is worth mentioning the actions of “eco-mafias” which can be found in differing degrees in every country. These organizations offer ways to circumvent landfill regulations, minimize or avoid gate fees, and dump of hazardous waste illegally. One example from Italy:

„The Italian ‘ecomafia’ has seen its business, valued at 24 million euros, grow 30

percent in the past few years. These kinds of revenues and numbers put the

ecomafia on par with companies like Fiat. Legambiante, the well-known Italian

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environmental group, published these findings in its annual report. According to the

group, environmental unfriendliness is currently the most dynamically developing

business around and has made the ‘ecomafia’ a real ‘financial tiger’ in the past few

years.”

1.1.2. Product Description (planned capacity, the

technology it can serve)

There are four main methods of waste disposal (decontamination) besides incineration (and landfilling):

1. Different kinds of radiation (UV) or treatments (ex. ozone) or perhaps heat treatment. (These are exactly the kinds of treatments that use use of our technology makes redundant.)

2. Composting – we do not accommodate/support this method. 3. Digestion – this method cannot truly be classified as decontamination

(disposal), but rather as energy extraction. The temperature of the mesophilic fermentation does not destroy any harmful or pathogenic material. Harmful heavy metals also remain. However, through the utilization of our technology, fermentation residues become a source of fuel.

4. RDF waste deserves a separate mention. Contradictory classifications exist in the entire EU. (Perhaps the only commonality shared is that every country seems to fear it.) Through our technology, even this waste becomes a fuel source.

During incineration, most sources are differentiated, that is treated separately:

- Incineration for disposal (decontamination) and incineration for energy recovery

Conditions for the incineration of waste (either for disposal or for energy consumption) are clearly specified in all European countries; these conditions are exact and strict. The same cannot be said for the rest of the other technologies. Permissive conditions often exist for these technologies, and in many cases they are not conditions demanding exact results. We have developed equipment and propose a technology that recovers surplus energy from waste disposal through incineration. Since our equipment is capable of “burning” any kind of organic waste, or waste mixture with a moisture content that does not exceed 49%, the calorific

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value projected onto the total mass reaches 6MJ/kg. The subsequent ash content does not exceed the 30% of the mass of the original dry matter. “Equipment for the disposal (decontamination) of hazardous, high

moisture content organic waste” – it is called. This saying implies that we approach the disposal of environmentally hazardous organic waste as a singular problem that needs a solution. At this point, we consider it necessary to mention two very important characteristics of the equipment and technology we have developed:

a. Every product and resource finds its origin in the natural environment (air, soil, water) and at the end of its lifecycle to the natural environment it returns. Environmental burdens (pollution) are caused when waste is returned to an inappropriate location or when the proportion of waste exceeds the proportion of matter originally extracted from the environment. The elements of the environment that suffer the most pollution are the soil, the water, and the air.

b. The most important element of our proposed technology is that the reduced waste load returned to the environment is but a fraction of original mass. (After recovery of useful substances in the ash, the volume of dry matter amount is below 5%, even in a water-soluble, bound form)

c. Thermal waste decontamination and disposal produces usable

energy. In doing so, CO2 emissions are quite significant, but since it is organic matter, vegetation is able to absorb these levels of CO2, thereby there is no net increase of CO2 in the atmosphere.

The developed equipment and proposed technology is especially suitable for organic waste disposal processes because:

- it renders radiation and heat treatments, as well as storage, obsolete - it can be the final phase of disposal in the case of digestion - it allows the use of energy (RDF waste)

Today there are a few accepted methods of disposal that can, more or less, be perceived as competition to thermal disposal: composting is one of

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these. Therefore, it is appropriate to draw a comparison of the environmental impact and results of the two processes.

1.1.2.1. The Effects of Composting Municipal Sewage Sludge

and Other Organic Waste Compared to Thermal

Disposal Firstly, it should be noted that there is a qualitative difference between compost made from agricultural and food industry waste and compost made from sewage sludge and municipal solid waste. The former is relatively risk-free because it contains virtually no poisonous or pathogenic materials or heavy metals; the latter does contain these materials and its composition also carries uncertainties that pose risks for agricultural use. In the following we will focus exclusively on compost made of sewage sludge. The most common form of composting uses high moisture content organic waste (sewage sludge and other organic wastes, e.g. food scraps, slaughterhouse waste, etc.) mixed with additives (straw, wood chips, peat ), and has an initial substrate moisture content of 50-55 % and a C:N ratio that is 1:30-40. This mixture is put into compost prisms and aerated. As a result, the oxidation process is triggered during which the temperature rises to 55-75°C for 2 to 3 days. Following this time period, the temperature gradually decreases until it finally reaches the same temperature as its surroundings. . (Descriptions of this process reveal that the rise in temperature kills the pathogenic organisms in the compost. This is certainly true, but it does not kill spores which, when introduced to soil can remain active and infectious for a very long time. The process also does not destroy original toxins in the substrate or pharmaceutical residues. The levels of heavy metals also remain unchanged.) Following the completion of the oxidation phase, there a six-month rest period and treatment ensues. As a result, the dry matter content of the compost increases to 72-77 %, while losing 30% of its dry material. An oxidation process takes place during the aerobic phase, while a type of fermentation occurs during the anaerobic phase. In the former there is significant water loss and as well as CO2 and NH4 emissions;

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the latter generates CH4 which, in the end, finds its way into the atmosphere.

There is no doubt that, in terms of mass, the compost

contains considerable

amounts of plant nutrients (N, P, K), which could be used for or turned into fertilizer. For this reason, many people consider a very good and

economical method. (It has been said that “sewage sludge is like liquid gold for the soil” –if this were even remotely true, there would be no need for us to build expensive

plumbing systems in our households to collect and get rid of this “liquid gold!”) It should be noted that nutrients for plants, when found in sewage sludge, are not in a usable or absorbable state, because a precise goal during the treatment of waste water is rendering these “precipitates” water-insoluble so that they can be separated and kept from entering natural water systems. Most absorbable plant nutrients found in compost are derived from additives. In Table 1, we calculated the full results of sewage sludge composting. We then compared this to the energy values derived from thermal utilization, as well as the phosphorus recovered from the ash which valued as the equivalent of fertilizer. We ignored the quantifiable value of the emissions. The table shows that from the point of view of finances (operational profit) composting falls short of thermal disposal even if 100% of the plant nutrients are utilized.

Table 1: Comparison of composting and thermal disposal on 1Tonne of

sludge dry matter

Denomination

Dry

Matter

%

Total

mass kg

Tot. Dry

matter

kg

Sewage sludge 20% 5 000 1 000 Additive (straw) 85% 5 294 4 500 Starting substrate in total 53,43% 10 294 5 500 Dry matter loss 30% 1 650

Compost value 75% 5 133 3 850

The content of the compost’s plant

nutrients N P K

%/of the dry matter 2,60% 3,50% 1,10% Total of acting agents kg 100 135 42 The active substance content of the fertilizer % 20% 25% 40% Equivalent fertilizer kg 501 539 106 Considered unit cost €/kg 0,47 0,60 0,50 Equivalent fertilizer € 235 323 53

The value of total (theoretical) fertilizer € 612

Price of the additive (50€/t) 265 The operational costs of composting € 160

The results of composting 187

Available with thermal disposal

Per unit Total

Total

value €

Extractable energy (MJ) 12 12 000 120 Phosphorus kg 0,0225 22,5 68

The result of thermal disposal € 188

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It should be noted that the savings from the fertilizer do not appear and are not logged for the “owner of the waste.” Thus, composting at a sewage plant where the purchase of additives is necessary immediately incurs a loss and becomes an unprofitable activity. (The compost distributors’ profit comes from fees paid to suppliers.) Furthermore, evidence demonstrates that farmers shun and have an aversion – rightly so, in our opinion - to the use of such compost because: - the soil tests seemingly every country requires when these composts

are used - use of the compost is banned for the growing of most plant crops

(including vegetables, forage crops, etc.) - the use of his kind of compost is banned for the cultivation of organic

crops and bio-foods According to the data presented, our proposed technology and method of disposal is financially competitive when compared to composting which is our “technological competitor.”

1.1.2.2. The Technical Content and New Features of the

Developed Equipment Until quite recently, the mono-incineration of sewage sludge that adhered to waste incineration guidelines (temperature, emissions) was feasible only in large fluidized bed incinerators. Every one of these kinds of incinerators consumes large quantities of fossil fuel. The equipment we have developed possesses a special mixing and dosing unit which is programmed to ensure that the appropriate composition and amount of fuel for combustion chamber. The pre-combustion unit is a combustion grate-equipped incinerator with a primary and secondary combustion chamber. The operation of combustion grate incinerators is well-documented, but here special requirements had to be met. The design of the equipment, as well as the horizontal delivery of combustion air and special design of the holes provided on the front surface

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of the steps ensures that no combustible materials in the high moisture content mixture is left behind to stick to the combustion grate. Another new feature is the development of the secondary combustion chamber and the introduction of the secondary combustion air. The design of the secondary combustion chamber together with the unique delivery method of measured preheated secondary combustion air creates a turbulence that ensures that perfect mixing of the flue gas and the combustion air that burns away the CO in the flue gas. An installed combustion catalyst element also helps facilitate this. The secondary combustion chamber maintains the required constant temperature (800-850°C) to ensure the combustion of CO. We have submitted patent applications in order to protect the many

technical innovations this process and method possesses. The

application procedure is in progress.

Built in pellet burners provide additional heat in the afterburner to maintain the required temperature of 950 ° C. The cubic capacity of the afterburner and the deflectors within ensure the prescribed retention time within the chamber is fulfilled. The intervention of heat exchangers assures the flue gas leaving the combustion chamber is converted to energy to meet local demand. After leaving the heat exchanger and the energy generators, the cooled flue gas enters the GARANTFILTER Company’s "end-cleaner" or scrubber which

guarantees the emission levels will always stay within the specified limits. Table 2 depicts the conceptual structure.

Electricity is of great importance, which is why we employ a thermal oil

heat exchanger that can ensure the supply of energy for the ORC

Fig 2. Basic Design of the Equipment Incinerator

Flue gas scrubber

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equipment. The capacity of the equipment we have developed – 1.6 MW

– makes it possible to connect to and supply a TURBODEN-300 or other

equipment operating under similar parameters like the B:POWER ORC

WB-1, which safely and securely generates 160…220 kWh of electricity

per hour. On top of this, there is also an opportunity to further utilize

the surplus heat (e.g. in a 90/70°C system) of the ORC equipment.

(drying, heating, etc.)

The output of the prototype is 1.6 MW. The power supplied is needed for the Turboden 300 (smallest active thermal oil) equipment. The capacity of the central suction fan can be varied (increased) and the sizing of certain elements of the equipment allows the unit to operate at higher power (2.3-2.4 MW) and provides enough energy for the operation of additional TURBODEN 400 - ORC equipment. This is capable of delivering 300-350 kWh of useable electricity per hour. This is the equipment that is in the current production plan. Naturally, in the future – by adjusting and changing the size of sub-elements – the production of equipment to meet other demands (1.5 MW) will be possible.

1.1.3. Potential Buyers As mentioned above, the equipment is suitable for virtually any mono or mixed organic waste disposal and thermal energy generation, which is consistent with the criteria in section 1.1.2. Accordingly, we believe our potential customer base to be waste disposal plants that are in continuous operation and where the necessary organic waste is available for disposal.

1.1.3.1. What is the capacity of plants we are able to serve?

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Our equipment can neutralize and dispose of many kinds of mixtures, blends, and compositions of waste. One unit can serve a "plant size" (waste water treatment or waste processing plant) depending upon the composition of the waste for disposal. There are many possible options, but it seems advisable to select three basic types and base our sizing upon these. Mono incineration of

sewage sludge

This relates specifically to the treatment of sewage sludge. Those kinds of sewage treatment plants where there is no digestion or composting, where the resulting sludge is dried, dumped, or given to others for further processing (with additional fees) are relevant. There would be a minimum 16 to 17,000 t of 20% dry matter. The sludge containing 20 % dry matter minimum annual amount from 16 to 17,000 t . This equates to a treatment plant large enough to deal with 160-170,000 L.E. (Model in Fig. 3) The Co-Incineration of Sewage Sludge and RDF Waste

This is a complete waste management (recovery) process. The equipment is comfortably capable of providing the complete treatment and disposal of organic waste for settlements with a population of 30-40 000 inhabitants. No digestion or drying would take place in this case.

The resulting generated energy is practically pure profit; this, in addition to the savings in fees, reduces costs and increases profit. If the generated electricity cannot be sold, it can be utilized for the production of marketable goods like wood pellets. This

Figure 3.

Figure 4

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variation is efficient because it produces high profit margin goods when the price of waste-generated electricity is low. The situation in Hungary is remarkably unique. Energy generated from waste disposal has a market price of € 0.1 per 1 kWh; through the utilization of wood pellets to generate energy, a potential profit of € 0.16 per 1 kWh of generated energy sold exists.

Co-Incineration of Fermentation Residues and RDF

This version is the most energy efficient. Nearly half of the energy contained within sewage sludge is recovered during the first step, which is the digestion process. More than 65% of the energy recovered here can be used or sold. (CHP unit efficiency is 85% while 20% of the energy produced is for self-consumption. Thus, the usable energy is 68%.) This could solve all the problems associated with the disposal of organic waste for a city of 80-100,000 people. (model: Figure 5)

In the interest of thoroughness, mention should be made of solar

drying option because the method is being utilized in a few places.

There is no denying that this method creates significant savings in

fossil fuel or other energy consumption. It can also increase the

amount of usable energy. However, it should be noted that solar

drying is a special composting process, (oxidation process). As

such, it creates significant emissions, as well as reduction in mass

and a reduction in energy content.

1.1.3.2. Potential Domestic Customer Base

Figure 5.

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The first “references” for this equipment should be established in Hungary. Given that RDF technology is only just beginning to spread, domestic sewage plants as potential domestic purchasers must be taken into account. We assessed the sewage disposal plants by size (based the amount of dewatered, 20% dry matter content sludge) and also examined how much of this will be processed through digestion. (Table 2)

Taking equipment capacity (fuel demand) into account, only those plants where the quantity of the dewatered sewage sludge attains 20 – t. could be considered as potential plants. There are currently 33 plants like this. These 33 plants account for 64% of the total volume of domestic wastewater sludge (922 000 t / y ). Of these 33 plants, 14 are also involved in digestion. The quantity of dewatered sludge used here is 566,000 tons / year. This accounts for 64% of the

sludge produced by all 20 t/day operations. The end product of digestion is 263 000 t of fermentation residue containing 35% dry matter. In the first phase – in two years' time - we aim to install our equipment into at least 3 plants. It is highly probable that we will accommodate our model for dried and dewatered fermentation residues. An annual sewage sludge production rate of at least 37 000 t must be taken into consideration; since only 7 of the largest wastewater treatment plants attain these amounts, only they may be counted as potential customers. We estimate that after ten years in the domestic market we will be able to sell 25 units. This assumption is based on our ambition (our conceptual, legal, and declared goal) to incorporate digestion (biogas) at all 30,000 hp wastewater treatment plants. Selective waste collection will become increasingly widespread and commonplace as will RDF technology.

Table 2. Sewage sludge fermentation residues in the

current wastewater treatment plants (2012)

Daily sludge value T

Plant

no.

Total

sludge

(20%)

t/yr

Usable

sludge

t/yr

Fermenta

tion

residue

(35%)

t/yr

>100 6 537 192 159 280 167 593

>50>= 100 7 178 808 62 178 64 930

>20>=50 20 205 571 139 302 30 326

>10 <=20 27 141 948 141 948

>5 <= 10 58 144 624 144 624

<=5 581 224 359 219 648

Total 699

1 432

502 866 979 262 850

Used for Biogas T/year 565 523

Source: Summary of data from individual wastewater

treatment plants.

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1.1.4. A Select Summary Analysis of the 5 Most Promising

Markets We surveyed potential European markets – based on current data from Eurostat and from contributors and partners - to determine the current state of waste of organic origin (from sewage sludge and municipal solid waste organic matter) in some countries of the European Union. (Table 3) The data in Table 3 – a portion of which is from an estimation - is not totally reliable, but it does reflect the magnitude of the deviation. Which methods of disposal certain countries favor or privilege also becomes clear. Data relating to sewage sludge is largely reliable because there is an existing database for information of this kind. However, no such records exist for certain kinds of organic waste; this left us with only the analysis of various studies and their data trends from which to produce data suitable for further estimation and the characterization of trends. Also, it is likely that overlaps between the different recovery modes exist: e.g. composting and agricultural recovery.

Table 3. Organic waste management in some European countries

Country Amount

1000

t/yr

Incinerat

ion %

Landfill

%

Composti

ng % Other %

Austria 2 800 11,00% 65,00% 18,00% 6,00%

Belgium 3 500 54,00% 43,00% 0,00% 3,00%

Switzerland 3 700 59,00% 12,00% 7,00% 22,00%

Germany 25 000 36,00% 46,00% 2,00% 16,00%

Denmark 2 600 48,00% 29,00% 4,00% 19,00%

Spain 13 300 6,00% 65,00% 17,00% 12,00%

France 20 000 42,00% 45,00% 10,00% 3,00%

Greece 3 150 0,00% 100,00% 0,00% 0,00%

Italy 17 500 16,00% 74,00% 7,00% 3,00%

Ireland 1 100 0,00% 97,00% 0,00% 3,00%

Luxembourg 180 75,00% 22,00% 1,00% 2,00%

Norway 2 000 21,00% 67,00% 5,00% 7,00%

Netherlands 7 700 35,00% 45,00% 5,00% 15,00%

Portugal 2 650 0,00% 85,00% 15,00% 0,00%

Sweden 3 200 47,00% 34,00% 3,00% 16,00%

Finland 2 500 2,00% 83,00% 0,00% 15,00%

United Kingdom 30 000 8,00% 90,00% 0,00% 2,00%

Total 140 880 23,00% 63,00% 6,00% 8,00%

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In subheading 1.1.1 we determined the criteria by which we consider a country as a potential market. We gave primary consideration to the ratio of hazardous waste disposal of organic origin. On that basis, we have selected those countries where data show that the proportion of waste in the landfill of organic origin is in excess of 50%. Here we also noted the number of sewage treatment plants that perform at a higher residential equivalent than 50,000 hp. (Table 4)

The table shows that the 9 countries listed dispose of more than 60 million tons of organic waste in landfills. Therefore, European countries present potentially huge opportunities. If only 10% of the listed countries current landfill waste is taken into account, and one of our units can dispose of 20 000 t of waste annually, then

there is potential to sell over 300 units just to meet the need of this market. However, many factors influence the marketability of the equipment. Thus:

- The amount of savings a given country can accrue from the reduction of the mass of landfill waste. (landfill cost rates)

- How much savings or revenue may come from the use of or sale or generated energy. (Evolution of energy prices)

- the priority a country gives to environmental protection. Our proposed technology is in compliance with EU directives and recommendations regarding waste disposal and recycling. The long term marketability of our equipment is determined by and depends upon the enforcement of these directives and recommendations on member states of the EU.

Table 4. The number of landfill waste T/year and the number of wastewater plants (larger than 50 000hp) in countries where the waste landfilled was greater than 50%

Country

Total Waste

t/year

Landfill

t/year

Plants

larger

than

50 000

LE

Austria 2 800 000 1 820 000 65 Spain 13 300 000 8 645 000 327 Greece 3 150 000 3 150 000 36 Italy 17 500 000 12 950 000 353 Ireland 1 100 000 1 067 000 18 Norway 2 000 000 1 340 000 20 Portugal 2 650 000 2 252 500 68 Finland 2 500 000 2 075 000 27 United Kingdom 30 000 000 27 000 000 302

Total 75 000 000 60 299 500 1 216

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We believe the strengthening validity of “green movements” around the world will influence all European countries in the near future (3-5 years) and push their governments play a greater role in protecting the environment. Due to a lack of data, Romania and Bulgaria are not included in the tables. (As far as we know, the current method of organic waste management is a big problem for both of these countries.) One of the top priorities of The European Environmental Protection is to protect the Danube Region. Taking all of this into consideration, we see Romania and Bulgaria as potential markets as well. Looking at what has been presented thus far, we believe there is the potential to market 300 units in Europe over the next 8 to 10 years. Based on our most current knowledge, we believe the most promising European markets to be:

- Austria - Italy - The United Kingdom - Romania - Bulgaria

Of course, Greece, Spain and France are also significant, because of the very large quantities of organic waste currently dumped in landfills; however, disposal fees are quite low and there is little incentive to reduce the volume of waste being dumped into landfills.

1.2. Summary of the Analysis of Comparable Life-

Cycles We commissioned Bay Zóltán Nonprofit Kft to use the CML 2001 method to complete an analysis of the lifecycles of varieties and proportions of waste that required disposal through the equipment and technology we have developed. The impact analysis for each fuel mix version was conducted in the following impact categories taking into account the content and form prescribed by the method ( raw material to waste).

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a. Global warming (GWP ) : the sum of greenhouse gas emissions over the lifecycle

b. Acidification (AP): The given amount of sulfur dioxide and nitrogen oxides emissions over the lifecycle

c. Eutrophication (EP): The given changed lifecycle under load of phosphorus and nitrogen, which finally appears in water resources

d. Decrease in resources (ADP): the amount of energy used during the lifecycle

e. Photochemical ozone formation (POCP): the amount of volatile organic compounds released during the lifecycle

f. Ozone depletion (ODP): the release of halogenated hydrocarbons during the lifecycle

g. Toxicity: Emissions of substances that have a toxic impact on the ecosystem, especially on human life, (toxic heavy metals, toxins and other harmful residues).

The transformation of every combustion fuel mixture carries negative impacts (use and emissions). At the same time – compared to dumping the waste into a landfill without treatment – savings can be incurred (energy profit, reduction in emissions, useful materials, etc.) For us, the balancing of these values hold interest. Impact assessments were carried out on these kinds of waste-mix:

- Mono-incineration of sewage sludge (in this case there was a distinction between the use of mechanically-dried sludge and solar-dried sludge).

- Co-incineration of dewatered sewage sludge and RDF waste - Mono-incineration of fermentation residue - Co-incineration of fermentation residue and RDF

Naturally, the scale of each of the abovementioned mixtures was different, because the differences of the total mass of disposed waste are large; however, the study shows that in all kinds of waste mixtures and in every impact category the available technology ensures that savings significantly exceeds consumption (emissions, resource consumption, and other adverse effects).

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The following summary diagrams illustrate the effects of the most significant impact categories.

The figures show that in terms of the magnitude, the use of fermentation

residue is the largest. This follows from the fact that the starting amount of waste is the largest since the dry matter content of fermentation residues is close to 50% less than sewage sludge input for digestion. Additionally, energy extraction is two-fold. (CHP unit holds approximately 85% and the energy provided by the incinerator.)

Figure 6. GHG emission for each fuel mixture

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Figure 7. Eutrophication for each fuel mixture

Figure 8. Fossil energy usage and savings for each fuel mixture

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Looking at any of the impact categories it becomes obvious that the use of RDF waste in terms of net profit is favorable to the use of mono-incineration. (See figures 6,7,8,9)

1.3. Analysis of Regulations. The Legal Framework

for Disposal of Sewage Sludge

1.3.1. EU Regulatory Environment • The use of sewage sludge in agriculture and protection of the

environment in particular of the soil (86/278/ EEC) • Council Directive on landfills 1999/31/ EC (April 26th, 1999) • European Parliament and the Council directive on the incineration of

waste 2000/76/ • 2008/98/ EC of the European Council directive on waste and

repealing certain directives

1.3.2. The Regulatory Environment in Hungary

- Fundamental Law of Hungary - Act V of the 2013 Civil Code

Collection of existing national legislation on wastewater treatment

Figure 9. The balance of uses and savings in individual impact categories for

the examined waste mixtures

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o Act XLIII of 2000. Waste Management Act (The Act contains rules and obligations relating to liquid waste(sewage)

o Act LVII of 1995. Water Management - Act LIII of 1995. General Environmental Protection Rules - Act LXXXIX of 2003. Environmental pollution charges - Act CXXIX of 2007. Protection of agricultural land (This act regulates

the use of sewage sludge and compost derived from it for agricultural purposes; it also stipulates rules concerning soil tests and the liability procedures for the abovementioned substances.)

- Act CXXIII of 2007. Expropriation (Specifies the conditions for the construction of sewage treatment plants for expropriation)

- Government Regulation 38/1995(IV.5.) The supply of drinking water and the disposal of sewage through public utility (Determines the technological requirements of water main and sewage networks.)

- Government Regulation, Ministry of Environment and Water 40/2006(X.6.) A regulation addressing certain hazardous substances in the environment; contaminant limits in surface water.

- Government Regulation 219/2004(VII.21.) Protection of ground water. (It also addresses wastewater activities that may be related to the deterioration of groundwater quality. It also determines the scope of activities that require official approval. It contains lists of required authorization documents.)

- Government Regulation 220/2004. (VII.21.) Rules to protect the quality of surface water. (This Regulation lays down the general obligations of the issuer and general requirements for the issuing authority of the limits of harmful substances in waste water, rules for pre- cleaning, release procedure authorization, applicable fines, penalties and sanctions rule breaches)

- Government Regulation 74/2000. (V.31.) Concerning the promulgation of the Convention on Cooperation for the Conservation and Sustainable Use of the Danube set up in Sofia on June 29, 1994. (The Regulation addresses issues that relate to the protection of the Danube: emission limit values, wastewater treatment requirements, rules regarding point source and diffuse pollution.)

- Government Regulation 26/2002. (II.27a.) In connection with The National Wastewater Implementation and Treatment program, relates to the founding of waterworks agglomeration. (The regulation sets out the basic design of the wastewater agglomerations in relation to environmental regulations as well as technical and economic requirements.)

- Government Regulation 20/2001. (II.14.) Environmental Impact Assessment (The regulation contains requirements regarding

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environmental impact assessment and the scope of activities which are a prerequisite of an environmental impact assessment.)

- Government Regulation 314/2005. (XII.25.) Environmental Impact Assessment and the integrated environmental permit procedure (Describes and mandates the activities subject to the integrated environmental permit for Environmental Impact Assessment)

- Government Regulation 174/2003. (X.28.) Economical operational regulations regarding individual wastewater treatment and for sewer treatment in public utilities not visible within the National Implementation Program.

- Government Regulation 126/2003. (VIII. 15.) Detailed content requirements for waste management plans.

- Government Regulation 50/2001. (IV. 3.) Regarding rules of wastewater and sewage sludge management for agricultural use.

- Government Regulation 240/2000. (XII.23.) Regarding urban wastewater treatment of sensitive surface water and their catchment areas.

- Government Regulation, Ministry of Environment and Water (XII. 6.) Detailed rules for verifying the use and waste water emissions.

Existing National Legislation on Sewage Sludge

- Government Regulation 50/2001 (IV.3), Ministry of Agriculture

Regulation 36/2006. (V.18.) (The goal of these regulations is to regulate the proper use of certain effluents, treated sludge, including sewage sludge compost on agricultural land to avoid contamination of soil, surface and ground waters that, in turn, may be harmful to human health, plants and animals.)

- Ministry of Agriculture Regulation 36/2006 (V.18) This regulation addresses the expectant and more stringent procedures and limits regarding the use of waste, with particular emphasis on the treatment of waste sludge and regards compost as a commodity as long as it complies with the procedures set out in the Regulation.

- Act CLXXXV of 2012. Regarding waste recovery. (According to this law, waste incineration or co-incineration plants, incineration or co-incineration shall be allowed when the incineration or co-incineration produce electrical and heat energy or is directed to cement, brick, building tile, or and ceramic manufacturing. Waste incineration or waste co-incineration in waste incineration or waste co-incineration plants can only burn waste material that is not recyclable. Only hazardous waste incinerators are permitted to burn hazardous waste.)

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- European Common Market Directive 91/271, the National Implementation Program, and the National Rural Strategic Concept address the treatment and status of wastewater in Hungary's settlements.

- Statute of the Ministry of Environment and Water 3/2002. (II.22.) Regarding the technical requirements, operational conditions, and emission ceilings of waste incineration.

1.3.3. The Regulations of Other Countries

1.3.3.1. The Regulatory Environment in Germany

Waste Recovery Act/ Das Kreislaufwirtschaftsgesetz (KrWG) /

The legal basis for waste disposal and disposal of sewage sludge is covered by the" Das Kreislaufwirtschaftsgesetz (KrWG) " law which is in line with the 2008/98/EC directive of THE EUROPEAN PARLIAMENT AND OF THE COUNCIL. The law is designed to strengthen environmental protection, climate protection, and resource saving by promoting waste reduction, recycling, and increasing recovery in the waste industry. The Waste Utilization Act " Das Kreislaufwirtschaftsgesetz (KrWG) " sets a 5 -

level waste hierarchy in accordance with the EU directive. (Collection,

preparation for recycling, recycling, other uses (e.g. energy).

In order to use sewage sludge as fertilizer spread in agriculture, compliance with § 11 paragraphs of the Waste Utilization Act "Das Kreislaufwirtschaftsgesetz (KrWG)" is required in the interest of placement. This paragraph is based on the regulation of sewage sludge as well: "Klärschlammverordnung"(AbfKlärV). The use of thermally-treated sludge requires adherence paragraph 13§ of the Waste Utilization Act „Das Kreislaufwirtschaftsgesetz (KrWG)” 13§. Adherence to the federal emission protection laws must also be followed: "Bundes - Immissionsschutzverordnung BImSchV.” The Fertilizer Regulation (Düngemittelrecht) must be obeyed in case of agricultural use.

Sewage Sludge Regulation/ Klärschlammverordnung (AbfKlärV)

This regulation deals with the outsourcing of sewage sludge in agriculture or horticulture. The regulation regarding manure needs to be adhered to all the same. As a great a distance as is possible needs to be kept from the limit values within the regulation. In general, there is no limit to the use of sewage sludge in agriculture or horticulture spreads, but application of this nature can only continue as long as the local conditions of the given area allow. (e.g. the nutrient needs of plants or crops)

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Based on a sample of § 3. 5 of the Act, the producer of sewage sludge (sewage plant) must take samples at least every 6 months after the application and should evaluate the following elements:

1. Nutrient content (nitrogen, phosphate, potassium, magnesium) 2. Total organic halogen bond, AOX 3. Heavy metals: (iron, cadmium, chromium, copper, nickel, mercury, zinc) 4. pH, dry matter, organic matter content, agents

From the first sample, then every two years afterward, the level of PCBs, dioxins, and furans must be examined. Sludge producers must test soil upon which the application of sludge is planned. A test must be carried out before the sludge is spread, and every 10 years thereafter to check the soil for the following components:

• pH values • nutrient content: nutrients usable by plants - phosphates, potassium,

and magnesium • heavy metals: (iron, cadmium, chromium, copper, nickel, mercury,

zinc) The producer of sewage sludge is mandated to assume the costs of the soil analyses and sludge tests. The spread or application of industrial and raw sewage sludge is strictly prohibited. The application of sludge is also forbidden on:

• areas producing vegetables or fruits • land designated as protected fields and forests • protected areas like national parks • I and II zone water/wetland protection areas • spread sludge or soil that fails to comply with 4§ regulation limits

Within a given area, a maximum of 5 t/hectare of sludge matter can be applied. A maximum of 10t/hectare applies to dry matter derived from sewage sludge compost, as long as the organic pollutants and heavy metals do not rise above half of the acceptable limits in regulation Klärschlammverordnung (AbfKlärV) / Sewage sludge regulation §6.

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Limit Levels

Sludge Regulations 2010 AbfKlärV

maximum mg/kg TS (in dry matter) In soil In sludge

Heavy metals As Pb Cd Cr Cu Ni Hg Th Zn

40 - 100 0,4 - 1,5 30 - 100 20 - 60 15 - 70 0,1 - 1

60 - 200

18

150 3

120 800 100

2 1,5

1.800 Organic contaminants

PCBPCDD/PCDF B(a)PPFC (PFOA and PFOS)

0,2 je congener 100 ng/kg TS

0,1 je congener 30 ng TEQ/kg TS

1;0,1 AOX 500 400

Salmonella spp. Germ exemption /50% of wet material

Manure Regulations / Düngemittelrecht /

Regulations concerning manure fertilizer have been established are the subject of statutory regulation of fertilizers and raw materials. These regulations relate to the use of sewage sludge in agriculture. Düngegesetz (DüngG)/Fertilizer Act The foundation of this Act calls for the creation of damage insurance or damage cover from which it is possible to cover any potential damages. Of course, only those not addressed by t§ 3 of the Act can implement the use of fertilizer. Düngeverordnung (DUV) Fertilizer Regulation This regulation lays down specific rules and good practices of fertilization. Nitrogen fertilization is prohibited between November 1 and January 31; thereby, the application of sewage sludge is also prohibited during this time period.

Fertilizer Mix Regulation Düngemittelverordnung (DüMV)

Regulations dealing with the fertilizers are not standardized in the EU. Sewage sludge is classified as an organic or organic-mineral fertilizer and can be used like NPK or NP fertilizers.

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Sewage sludge can only be applied directly, without any mixing.

Federal Emissions Regulation /Bundes-Immissionsschutzverordnung

BImSchV/

This regulation applies to mono-incineration and co-incineration, thus is also applies to sewage sludge. Limit values for particulate matter, sulfur dioxide, nitrogen oxides, mercury, and carbon monoxide as well as heavy metals. The regulation also provides for the circumstances of this operation:

- Air quality measures - Fire safety and protection - Waste management - Heat use and consumption

The regulation requires a temperature of 850 ° C for 2 seconds during post-combustion together with continuous emission measurements; it is mandatory to submit this data to the authority.

1.3.3.2. The Regulatory Environment in Bulgaria The current Bulgarian national legislation which is in compliance with 86/278/ EC regulation is the No. 339 (14.12.2004) Ministerial Decree on the use of sewage sludge in agriculture.

Concentration

mg/kg

EU-Directive

86/278/EC Bulgaria rescript

No 339 (14.12.2004.)

Heavy metals In sludge In soil

pH6-7 In sludge

In soil pH6-7,4

Cd 20-40 1-3 30 2

Cr 500 200

Cu 1000-1750 50-140 1600 140

Hg 16-25 1-1.5 16 1

Ni 300-400 30-75 350 75-80

Pb 750-1200 50-300 800 100

Zn 2500-4000 150-300 3000 250

As No regulation 25 25

Organic components

In soil

PAH 6.5

PCB 1

Pathogens In sludge

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Concentration

mg/kg

EU-Directive

86/278/EC Bulgaria rescript

No 339 (14.12.2004.)

Heavy metals In sludge In soil

pH6-7 In sludge

In soil pH6-7,4

Escherichia coli <1g titer

Salmonella ssp. 0 incidence 20 g b)

Clostridium perfringens <1g titer

Helminth eggs 1 incidence in 1kg dry matter

Precise Regulation Issues in Bulgaria and the Deviations from EU

Directives:

• Circumstances that prohibit soil application:

o If it is classified as hazardous waste or contains hazardous material

o If the pH level is below 6 o If the application area is classified as a vineyard or is involved in

winemaking o Protected water or wetland area

• Application ban be extended up to 45 days in grazing and fodder production areas.

• Further application criteria for NATURA 2000 areas. (background concentrations)

• Depending on the pH value of the soil differing permitted concentrations are permitted for the sludge.

• Test samples must be evaluated at accredited laboratories. • Soil samples and test results must be kept for 5 years. • The quantities of applications or spreads must be reported to various

authorities. • Further limits placed on soil and sludge:

o The levels of Cr and As in the sludge o PAHs and PCBs, as an organic component in the sludge o Pathogens in the sludge: Escherichia coli, Salmonella spp.,

Clostridium perfringens and helminths

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Other Related Regulations:

E

Laws: Regulation requirements Land law (SG, 89/2007, SG, 98/2010)

No. 339 (14.12.2004) Ministerial Decree prohibits the improper use and placement of sewage sludge in agriculture.

The Law of Agricultural Land Protection (SG, 35/1996, SG, 39/2011)

The placement is bound to a ministerial permit where the course of authorization will be determined.

Water regulation (SG, 67/1999, SG,28/2011)

Industrial wastewater and its sludge generation.

Regulation No. 6 (SG, 97/2000) Emission limit values of hazardous ingredients from the discharged waters of sewage plants.

Prohibits the release of sewage into water.

In further regulations, the individual naming of sewage sludge is rare. General regulations and guidelines apply to both incineration and landfilling.

Sewage Sludge Treatment of Waste Related Regulations:

• Regulation No. 6 regarding rules for installing and operating

incinerators (SG 78 / 07.09.2004) • Regulation No. 8 addressing landfill construction and operating

conditions (SG 83 / 24.09.2004) • Regulation No. 26 on the re-cultivation and reinstallation of soil (SG

89/1996, SG. 30/2002.) The effects of regulation No. 8 are significant, as it prohibits the disposal of untreated sewage waste in landfills until 2020. The Regulation 140/1992 (SG, 61/1992, SG, 93/2009) deals with the reclamation of abandoned mining areas and, upon first reading, does not affect the outsourcing of sewage sludge. However, the Ministry of Energy, in collaboration with the Ministry of Environment, has established a licensing approach to sewage sludge disposal in such areas for the purpose of land reclamation.

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Application amounts:

-without the need for mold removal: 45-60 m³ /0.1 ha or 37-50 t /dekar (kb.370-500 t/ha); -as a fertilizer: 15-18 m³ /0.1 ha, or 12-15 t / dekar (kb.150 t/ha).

1.4. The Process of Obtaining the Required Licenses

for the Market Entry of the Equipment

1.4.1. Directives / Other General Requirements for the EU The installed components of the pre-combustion and afterburner equipment are not covered by any single EU directive. This was confirmed during consultation with certification authorities. For this reason, there is no need to affix a CE marking to the pre-combustion and afterburner units, nor are we able to. Consequently, each and every project involving the equipment must be approved by designated national authorities. This does not influence the marketing of the equipment in any way since waste incineration must be individually approved for each and every project as well. If the incorporation of a unit bearing a CE marking is necessary, the procurement of the CE mark can be achieved during the planning and implantation stage.

1.4.2. The Licensing Process in Hungary The Licensing of Site-Specific Sewage Sludge Incinerators Steps to Licensing

1. The Preparation of a Preliminary Environmental Impact Study

Licensing authority: the territorial jurisdiction of the Environmental Protection, Nature Conservation and Water Management Inspectorate (Government Regulation 314/2005. (XII. 25.)

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2. The Preparation of a Single Administrative Document of

Environmental Licensing (IPPC)

Licensing authority: the territorial jurisdiction of the Environmental Protection, Nature Conservation and Water Management Inspectorate (Government Regulation 14/2005. XII.25.)

3. Waste Management and Disposal Licensing

Licensing authority: the territorial jurisdiction of Environmental Protection, Nature Conservation and Water Management Inspectorate (Act XLIII of 2000.)

4. The Licensing of Investment in the construction and production

of specific buildings and structures

Licensing authority: Hungarian Trade Licensing Office (Regulation 320/2010. (XII. 27.)

5. The authorization of individual plants that are not CE certified

Licensing authority: Hungarian Trade Licensing Office

6. Licensing the installation of Pressure Equipment installation

(PED)

Licensing authority: Hungarian Trade Licensing Office GM Regulation (9/2001. (IV.5.), EC Directive 2009/1005/

7. Electrical feasibility study (if electrical power generation

equipment is to be installed)

Licensing authority: the local power company

8. Electrical connection plan (if electrical power generation equipment is to be installed)

Licensing authority: the local power company

9. The electric power purchase agreement

Licensing authority: the local power company

10. Licensing for the construction of a small power plant

Conditions: Valid construction permit issued by the Hungarian Trade Licensing Office, electric power purchase agreement

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Licensing authority: The Hungarian Energy and Public Utility Regulatory Authority

11. Licensing of mandatory power purchasing obligation

Conditions: Valid building permit issued by the Hungarian Trade Licensing Office, electric power purchase agreement Licensing authority: The Hungarian Energy and Public Utility Regulatory Authority

12. Occupancy permit

a. Licensing authority: Hungarian Trade Licensing Office and the involvement of authorities possessing the required expertise

Note: The preparation of all necessary documentation, plans, and forms for licensing must be completed well before applications for licensing are submitted.

1.5. Cost-Benefit Analysis In our case, preparation of a cost-benefit analysis, in the classic sense of the term, is not possible because the three parts within a cost-benefit analysis (Variant Analysis, Financial Analysis, Economic Analysis) all aim for the same goal (result), and thus can serve as possible alternatives for comparison. Its role is defined as follows: The task of the cost-benefit analysis, in terms of its development and

presentation, is to contribute to the realization of available public and

budgetary resources that:

- are cost effective;

- offer current social benefits to society that exceed current social cost;

- only receive necessary levels of support and funding, overfunding does

not occur;

- maintain financially sustainable service standards during operation.

In our case, we want to market equipment that can be connected to and integrated into the existing technology on site. The usefulness and practicality of our equipment can be measured in its ability to supply energy and reduce negative environmental impact. The quantification of

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the utility of the unit for one country is not possible, because one essential element – the level of subsidies in a country – is dependent upon the type of undertaking, the location of the project, and other factors. Usually, the “return” for a given country, in terms of energy price developments and waste disposal fees, are identifiable, or can at least be determined approximately (quantified). Waste disposal fees vary greatly from one country to another. This can also be seen as an adopted negative value of the waste for disposal in some countries. It is impossible to determine the cost of financing (credit and interest charges) as these are project dependent in every instance. Here we can only complete a very limited analysis of the information mentioned above. We consider the initial investment will always be the same, because we intend to produce at home and have decided to calculate the initial investment in €. Since they are tied to the initial investment costs, maintenance cost will not change either. Also, we indicate no difference in the price of additional materials because they will be sourced from international markets. However, one aspect that could make a difference is varying wage levels in other countries. This should be taken into account, at least on the basis of ratios.

1.5.1. Description of Business Processes and

Identification of Participants The business process is shown in the value chain in appendix 1. In each case, the chain stretches from the wastewater producer all the way to the landfill. The real question is this: What happens during the process and how much of the unusable end product will remain at the end of the process? BIOFIVE technology can directly and positively influence the business processes of a wastewater treatment plant; these positives influences create spillover effects for both the public and owner of the treatment plant who in most cases is the government itself.

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1.5.2. Overhead Costs for the Use of the Equipment During the integration of the equipment into the existing waste management technology, additional costs are generated, such as:

- unit wage costs for labor required to operate equipment - maintenance costs for the equipment - procurement costs for the additional fuel (wood chips, wood pellets)

needed for thermal disposal - acquisition costs of other required materials (additive used for flue

gas cleaning).

Of the additional costs listed, the most significant difference between countries is wage costs. (Table L. 5.)

1.5.3. The Benefits Integrating the Equipment into

Existing Technologies The equipment can be perceived as the last phase in the sewage sludge and municipal solid waste management process, a stage which waste management has been lacking until now. In the rarest instances it was a part of waste management technology in places where composting was utilized. We addressed the problems surrounding this in section 1.1.2. In addition to environmental benefits, (there is no need to move or store waste, it is disposed of immediately) the equipment has the following quantifiable benefits:

- disposal fee savings - since the material will have minimal or no mass, it will no longer need

to be delivered to a landfill site, thereby reducing transport and handling costs

- "waste pre-treatment" (under the terms provided for in the landfill portability guidelines) is eliminated

- The redemption and savings of energy costs in cases where fossil fuels were used before in the drying process to reduce mass

- The generation of usable energy, which is either sold or used to make a significant reduction in energy costs.

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Notable differences in energy prices and landfill fees exist for the items mentioned above. (Table 5) Savings, revenue, and ultimately the end result are significantly influenced by the type of waste and the composition of the mixture in the waste that is to be disposed of. Table 7 contains the achievable results for the different mixtures of waste for disposal in various countries. Of course, some of these advantages are actually disadvantages for some business participants; these include sewage sludge and landfill operators, as well as larger co-incineration plants. The calculation for the performance of the existing equipment was determined at 1.6 MW and (8,400 hours / year) of continuous operation. This data also determines how much fuel is required should certain changes arise. The cost of landfilling (contributions + handling fees) in Hungary can be set at an average of € 40 / ton. Energy cost at € 0.1 / kWh. Wages and contributions have been calculated at € 3.3 / h. In alternative cases where no drying is needed, sufficient usable energy becomes available. As an option - we also took into account the production of wood chips utilizing the energy produced. Other direct costs (maintenance, lubricants, additives, etc.) stem from the nature of the equipment, so there will be no significant differences in other countries either.

1.5.4. Additional Information on the Analysis of

International Markets

Taking the calculation of domestic value as 100 % - we considered the differences of other countries and recorded them in Table 5. We calculated the indicators based on Eurostat data in addition to data obtained directly from individual countries. (Landfill fees)

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Table 5. The ratio of certain costs and components of income, compared to Hungarian values.

(100%=Hungarian value)

Denomination Slovakia Bohemia Ireland Norway United

Kingdom Austria Italy

Cost of wages and benefits 108,86% 135,44% 346,84% 341,77% 277,22% 386,08% 344,30%

Cost of electricity 172,73% 200,00% 254,55% 181,82% 272,73% 200,00% 172,73%

Cost of heat 134,58% 145,28% 180,93% 145,45% 158,65% 207,66% 211,23%

Waste disposal fee 50,00% 62,50% 75,00% 232,50% 315,00% 435,00% 125,00%

There is no doubt that the shared cost policies for landfill waste disposal varies from country to country and are decided by the politics a given country pursues. This by no means implies that landfill disposal costs and negative impacts on the environment are necessarily lower in countries where landfill disposal fees, also known as gate fees, are cheaper. The costs associated with waste disposal are still present with the potential of unexpected increase in costs and the potential negative environmental impacts of disposing of waste in landfills are still inherent. Countries with low gate fees take on a far greater share of cost and risk than other countries that impose higher fees. The “polluters pay” principle is presently not achieved in practice. (In this case, it is worthwhile to consider the Danube catchment area. Rainwater and rivers that originate in Switzerland collect and carry pollution that the countries of along the Mediterranean Sea must suffer. In this sense, the issue is much more than simply a European issue.)

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1.5.5. Investment Costs We took into consideration the purchase price of a basic model of the equipment in all relevant countries. Some components of the purchase price are presented in Table 6. Some costs we included in the initial purchase price included the patents know- how charge, installation, set-up, and the guarantee. Assuming that there would be demand for the generated electricity, we calculated the addition of a basically-constructed ORC unit and also took the values of the heat exchangers into account. The costs of pellet-making and pellet-making equipment contains some noteworthy information. It is our experience that the electricity produced has a value that is approximately one- and-a-half-times more than if was to be sold as green energy.

1.5.6. Some Versions of Implementation of the Cost-

Benefit Analysis There are countless possible versions for the use of our equipment and technology. How the equipment is used depends upon the composition of the waste, the existing technology, and the mode of using the recoverable energy at a specific location. Any investment decision would obviously take specific values into account.

Table 6. The expected cost of the project

Investment elements Ft €

Mixing dispenser 35 000 000 114 754

Combustion grate 190 000 000 622 951 Afterburner 60 000 000 196 721 Fume scrubbers 100 000 000 327 869 Heat exchangers 50 000 000 163 934

Chimney 10 000 000 32 787

Tools 50 000 000 163 934

Control 30 000 000 98 361

Total net value 525 000 000 1 721 311

Installation 52 500 000 172 131 10 year warranty 57 750 000 189 344

Patent know-how 42 000 000 137 705

Total 677 250 000 2 220 492

ORC technology 360 000 000 1 180 328

In Total 1 037 250 000 3 400 820

Pellet technology 2 T/h capacity 130 000 000 426 230

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In section 1.1.3, we detailed how we calculate the economic analysis through basic cases (waste composition).

Table 7. The expected performance for each individual version in some European counties, based on the

data collected from the price and cost relationship of the equipment’s experimental operation M.e=€/yr

Denomination Slovakia Czech Rep. Ireland Norway United

Kingdom Austria Italy

Sewage sludge incineration record

Costs of raw material 85 892 85 892 85 892 85 892 85 892 85 892 85 892

Wages 107 933 134 288 343 879 338 859 274 852 382 785 341 369

Material handling 1 056 1 056 1 056 1 056 1 056 1 056 1 056

Transport 6 158 6 158 6 158 6 158 6 158 6 158 6 158

Maintenance 152 459 152 459 152 459 152 459 152 459 152 459 152 459

Total additional costs 353 498 379 854 589 444 584 424 520 417 628 350 586 934

Electricity 194 908 225 683 287 233 205 166 307 750 225 683 194 908

Heat 11 982 12 934 16 108 12 950 14 124 18 489 18 806

Landfill fee savings 162 420 203 025 243 631 755 255 1 023 248 1 413 057 406 051

Phosphorus 27 843 27 843 27 843 27 843 27 843 27 843 27 843

Energy savings 588 367 635 125 790 984 635 904 693 572 907 878 923 464

Revenues and savings 985 521 1 104 611 1 365 799 1 637 119 2 066 538 2 592 950 1 571 072

Gross margin 632 023 724 757 776 355 1 052 695 1 546 121 1 964 600 984 138

Payback period years 5,38 4,69 4,38 3,23 2,20 1,73 3,46

Table 8. The expected performance for each individual version in some European counties,

based on the data collected from the price and cost relationship of the equipment’s

experimental operation M.e=€/year

Denomination Slovakia Czech

Rep. Ireland Norway

United

Kingdom Austria Italy

The co-incineration of mechanically dewatered sewage sludge and RDF waste

Costs of materials 88 039 88 039 88 039 88 039 88 039 88 039 88 039 Wages 107 933 134 288 343 879 338 859 274 852 382 785 341 369 Material handling 1 866 1 866 1 866 1 866 1 866 1 866 1 866 Transportation 7 121 7 121 7 121 7 121 7 121 7 121 7 121

Maintenance 152 459 152 459 152 459 152 459 152 459 152 459 152 459

Total additional costs 357 418 383 774 593 364 588 344 524 338 632 270 590 854

Electricity 255 147 295 433 376 006 268 575 402 863 295 433 255 147 Heat 513 246 554 034 689 993 554 714 605 018 791 962 805 558 Landfill fee savings 83 608 104 510 125 412 388 776 526 729 727 388 209 020

Phosphorus 35 832 35 832 35 832 35 832 35 832 35 832 35 832

Revenues and savings 887 832 989 808

1 227

242

1 247

897

1 570

443

1 850

615

1 305

556

Gross margin 530 414 606 034 633 878 659 553

1 046

105

1 218

345 714 702

Payback period years 6,41 5,61 5,37 5,16 3,25 2,79 4,76

The co-incineration of mechanically dewatered sewage sludge and RDF waste

Costs of materials 89 359 89 359 89 359 89 359 89 359 89 359 89 359 Wages 107 933 134 288 343 879 338 859 274 852 382 785 341 369

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In point 1.5.2 we defined, according to our knowledge, the index values of some European countries with respect to determining the conditions in Hungary. Some versions of cost and income conditions (the expected results and ROI) should be contained in the business plan. Repeating this is unnecessary; instead, we have presented a table that details the results and the anticipated payback period of waste disposal for a given composition of waste in certain European countries. (Tables 7,8) The row labeled energy saving in Table 7 requires further explanation. In the case of mono-incineration of sludge, fossil fuels are likely consumed used in drying. Since incineration is now available, energy savings can be taken into consideration. The table displays two basic tendencies:

- The best method of waste disposal for all countries from the point of view of returns is the co-incineration of fermentation residues and RDF waste.

- The gate, or disposal fee, is the biggest influence upon the development of the payback period in cases involving waste composition with a gross margin mass; (or in other words, we can see to what extent a given country adhered to the European Union’s “polluters pay” principle).

1.5.7. Figure - Value Chain

Material handling 99 148 99 148 99 148 99 148 99 148 99 148 99 148 Transportation 8 194 8 194 8 194 8 194 8 194 8 194 8 194

Maintenance 152 459 152 459 152 459 152 459 152 459 152 459 152 459

Total additional costs 457 093 483 448 693 039 688 019 624 012 731 945 690 529

Electricity 573 730 664 320 845 498 603 927 905 890 664 320 573 730 Heat 513 246 554 034 689 993 554 714 605 018 791 962 805 558

Landfill fee savings 168 030 210 038 252 045 781 341 1 058

590 1 461

863 420 076

Phosphorus 45 034 45 034 45 034 45 034 45 034 45 034 45 034

Revenues and savings

1 300

041

1 473

425

1 832

570

1 985

015

2 614

533

2 963

179

1 844

398

Gross margin 842 948 989 977

1 139

531

1 296

996

1 990

521

2 231

234

1 153

870

Payback period years 4,03 3,44 2,98 2,62 1,71 1,52 2,95

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1.6. Business Plan Biomorv Ltd. developed the aforementioned equipment. (New features are displayed as patent applications and in the form of know how.) The Garanfilter Company – in cooperation with us – manufactures the base unit of the incinerator and flue gas cleaning equipment. The energy supplied by the base unit, which requires accessories (heat exchangers, ORC equipment, etc.) can be used as needed. All these accessories can be installed to meet required needs. Thus, the equipment units will differ

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from each other depending on how they are constructed and which accessories they incorporate. BIOMORV has also developed technologies that ensure efficient (and income generating) applicability of the equipment. Obviously, the equipment will only be "marketable" if, in addition to the parameters, we can also convince the plant operator - the customer – of the benefits of using the equipment. Appropriately, the business plan must introduce and demonstrate the benefits of using our technology and equipment for different kinds of waste disposal. (It was for these reasons that we also estimated the realizable number of units that could be sold.) Biomorv Ltd. does not possess the necessary manufacturing capacity required to produce sufficient quantities to meet the foreseen sales volume demand. Therefore, the company will not carry out the production, but will outsource the manufacturing. To this effect, we have signed a preliminary agreement with BEHÁN Steel Ltd., a company that, in addition to manufacturing, will be involved in the instillation and perform warranty maintenance and other repairs of the equipment. Biomorv’s Technical Development Division supervises production.

1.6.1. Resources

1.6.1.1. Organization and People In the BIOMORV Ltd. Project, tasks are well defined, and are divided into 3 main groups. - Technical Development / Product Development - Business Development - Production For each group, we have selected people with the appropriate competencies who perform their duties as a part of the company or under contract. Project collaboration is the responsibility of the project management team. BEHÁN Ltd. will be responsible for the manufacturing of the equipment. They will be authorized to purchase the needed equipment and energy required for production. In addition to manufacturing, they will also

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assemble the fume scrubbers, heat, ORC, etc., onto the equipment. They will also completely install the equipment.

Project Leadership

Technical Development

Table 9. Project management

Organization Name Task Comments

BIOMORV Ltd. Dr. Gábor Garamszegi Chief Executive

BIOMORV Ltd. József Tóth Project leader

BIOMORV Ltd. Iván Grób Project leader

BIOMORV Ltd. Zsuzsa Lepedus Vincze Project finance manager

Dr. Mrs. Kaszai, Dr. Mónika Szendi

Legal advisors With commission

BIOMORV Ltd. Júlia Bertha Project assistant

Műszaki fejlesztés

Kazánfejlesztés

Rendszer-

integráció

Tesztelés Foszforkivonás

Szabadalmaztatás

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Table 10. Contributors in the process of technical development

Organization Name Task Comments

University of Miskolc Dr. István Szűcs Development of the boiler’s combustion chamber

BIOMORV Ltd. István Petróczy Development of the boiler’s combustion chamber

Thermolog Ltd. János Grób System integration

Intertest Bt. Barnabás Buza Testing

Biomorv József Lázár Service tests

Interinno patent office Anikó Várnai Patenting With commission

Zoltán Bay Institute of Miskolc

Zsolt Miklós Baranyai Development of phosphorus extraction technology

Business Development

Table 11. Contributors in Business Development

Organization Name Task Comments

Marketing Finance

Biomorv Ltd. Gyula Cseresznyés International sales Bpower Cz. Csaba Zsámbok International sales Intertest Bt. Barnabás Buza International sales

Entecco Gmbh Michael Auer International sales Pécsi Energia Kristóf Garamszegi Hungarian sales Pécsi Energia Ágnes Fogarasi Hungarian sales assistant

Bay Ákos Dervalics Application managing Bay Balázs Kerülő Application managing

Zoltán Bay Institute Renáta Bodnárné Sándor Life Cycle analysis commission Zoltán Bay Institute Tímea Síposné Molnár Life Cycle analysis commission

Üzletfejlesztés

SalesPályázatok

Sales nemzetközi

Sales Magyarország

Finanszírozás Marketing

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1.6.1.2. Financial Resources

Biomorv Ltd. financed the prototype and technology for the equipment entirely from its own resources without any support. Development and all other costs (licenses, professional fees, presentations, materials, required auxiliary equipment, etc.) were also self-financed. Resources required for further development are currently unavailable. We currently have preliminary agreements to deliver and install 3 units in Hungary. In the future, these plants will become our international references.

Figure 12. The planned development of financial resources

(annually)

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Behán Kft. stands ready to manufacture the 3 units in the aforementioned

preliminary agreements.

According to a preliminary

price contract with Behán Kft., the net price for the complete equipment unit including fume

scrubbers will be 462 million Ft. Thus – calculating in the know-how of the price (42 million/unit), the sale of one unit would supply BIOMORV with 102 million Ft. of usable capital. The sale of the three units will provide 306 million Ft. of start-up capital, which will be sufficient to create and operate an initial marketing and sales organization that will ensure continuous and ever-increasing sales. We will be able to, and must, expand this marketing and sales organization, once sales have come up - according to the actual interest (saleable).

We have estimated the annual number of units that can be sold based on our surveys to date and on the experiences of a number of workshops we have held.

Since such equipment - installed to replace the currently integrated generation of on-site waste and incinerator technology - is not yet on the market, obviously growth of the number of units sold will likely be slow. We have calculated that a maximum of 18 units can be sold in Hungary. For foreign markets - primarily in Europe – we have been planning carefully even though the equipment achieves technical applicability and environmental justification many times over. Our planning has been careful because the economic viability of the equipment depends mainly on the size of the landfill or gate fee. On the one hand, these tend to differ widely; on the other hand, there are fundamental differences as to how countries approach these fees. It is impossible to predict how this might change in the “middle term.” Thus, we estimate we will be able to sell 153 units to other European countries over the next 10 years. (Table 12)

Number of items sold Post-sale income remaining

at BIOMORV Year

Hungary Other

countries Total Ft €

0 3 3 306 000 000 1 003 279 1 4 2 6 612 000 000 2 006 557 2 4 6 10 1 020 000 000 3 344 262 3 7 8 15 1 530 000 000 5 016 393 4 15 15 1 530 000 000 5 016 393 5 20 20 2 040 000 000 6 688 525 6 20 20 2 040 000 000 6 688 525 7 25 25 2 550 000 000 8 360 656 8 25 25 2 550 000 000 8 360 656 9 25 25 2 550 000 000 8 360 656

10 25 25 2 550 000 000 8 360 656

Total 18 171 189 19 278 000 000

63 206

557

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1.6.1.3. Production Capacity We would like to achieve the production of the equipment with the help of steel manufacturers that possess the right expertise and manufacturing capacity. We will take advantage of the experience and production capacity of a number of prestigious manufacturers operating on the market. We have signed a preliminary agreement with BEHÁN Ltd. for the production of the equipment. Under the agreement, the manufacturer will produce the measuring and mixing equipment and the pre-combustion and post-combustion units based on technical documents provided by us and under BIOMORV’s supervision. Since every piece of equipment has a flue scrubber, the scrubbers will be purchased and installed. The control device is a similarly consistent part of each unit. Depending on the method of energy recovery, other pieces of equipment available on the market would need to be installed as well (heat exchangers, ORC). We will purchase these separately and the manufacturer will also separately install these into the equipment before delivery. We will expand production and increase the involvement of additional partners to meet the growth of market demand. Production must always be preceded by a feasibility study that takes into account the local conditions of the site where the equipment will be installed. If the study is accepted, authorization to initiate the investment may proceed. Design plans for the project can be updated and manufacturing of the equipment can begin following the successful completion of the authorization stage. Biomorv Ltd. and its partners will conduct all stages of the investment from the permit stage all the way to final execution; naturally, we will always be flexible and adapt to any consortium if the need arises.

1.6.2. Business Processes

1.6.2.1. Sales Processes

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Sales potential is an obvious prerequisite for proper, well-targeted marketing. We need to transmit a description of the equipment, its energy parameters, and the possibilities for energy recovery to “potential buyers.” Obvious potential buyers include sewage treatment plants and municipal solid waste processors, but our potential customer base could include any business or operation where large quantities of generated organic waste that cannot be otherwise utilized can be combusted. It is well known where the domestic and international waste water treatment plants and waste processors are. Contacting them and establishing business relations is the first step. To do this we must establish a means through which to respond not only to potential customers’ questions, but also anticipate their potential needs. Communication will be the key to our success. How well we are able to raise awareness of our product, both domestically and abroad, will determine, fundamentally, how successful we will become. To ensure successful and effective communication, we require a team of well-prepared and professional “language speakers.” We anticipate six individuals will make up this team. After our “reference plants” our established, a portion of the marketing strategy should focus on thoroughly introducing and raising awareness of our organization. The next step following the gaining a potential buyer’s interest is to provide substantial information that caters to a buyer’s needs and possibilities and makes them aware of the effectiveness and efficiency of our equipment; we could then tailor and custom-fit equipment that will best serve them and their needs. In order to facilitate this, we would need to prepare a feasibility study that takes into account the concrete details of a given site with the assumption that this would require one or several visits to the site. Naturally, BIOMORV will take on this task. We anticipate the need for 3 full-time employees for this role once we begin; this will be our sales team. Since each unit of equipment we create will be unique, members of the sales team will need to be armed complete knowledge of our equipment and all of its components and technology, as well as the regulatory and control structure of every given country. (For these positions, economics engineering qualifications and foreign language proficiencies are essential.) The feasibility study will ultimately form the basis of a potential buyer’s decision to place an order. Upon placement of an order, the technical development team customizes the plans according to the specific needs of

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the customer. They will also arrange for the procurement of the components necessary for that equipment. (They will order them.) The updated plan will precisely define the required modes for the installation of additional components for the equipment.

If the customer should request, BIOMORV can also undertake the licensure tasks and the organization and carrying out additional tasks related to the investment. We plan to employ 3 people to oversee this aspect of the operation. Necessary skills for this role include: a thorough understanding of country-specific requirements for authorization procedures and appropriate language skills.

1.6.2.2. Purchasing Process BIOMORV’s procurement tasks will focus solely on ensuring timely purchases of components from manufacturers on the market in order to guarantee the scheduled instillation of complete equipment units. Responsibility for this task is in the hands of the technical development team.

1.6.2.3. Production Process

BIOMORV has no direct production tasks; these rest with the manufacturer.

1.6.2.4. Quality Assurance

BIOMORV Ltd. demands the highest quality of service and product when choosing its manufacturing partners and suppliers. BIOMORV procures only the highest quality equipment from these partners. In the case of the boilers and incinerators, BIOMORV ensures the quality of a manufacturer’s operational and production conditions by visiting the site before committing to a contract. Delegates of BIOMORV Ltd. inspect and examine every critical phase of the manufacturing of incinerators and prepare a report on the process. Representative of all critical manufacturing phases check the manufacturer's premises and prepare a report. The production can only be initiated with the approval of a representative of BIOMORV. Main steps in manufacturing:

• Development of the body of the pre-combustion unit • Developing the inner-insulation of the pre-combustion unit

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• Manufacture of the steps for the pre-combustion chamber • Manufacture of the moving grate • Development of the body of the afterburner • Development of the inner insulation for the afterburner body.

We only accept delivery of the main combustion units with the inclusion of the manufacturer’s certificate and warranty. In the case of completely assembled units, BIOMORV Ltd. dispatches its technical inspector who scrutinizes the quality of the equipment through a series of itemized checks; should the inspector troubleshoot potential problems, BIOMORV ensures the main contractor responsible for the installation and mounting of the equipment fixes the errors before delivery is arranged.

Table 13. Quality Assurance

Organization Name Function

Thremolog Ltd. János Grób Design Thermolog Ltd. János Grób Design(foreign countries) Behán Ltd. Boiler production Local companies Implementation BIOMORV Ltd. + BEHÁN Ltd. Installation/Set-up BIOMORV Zrt. Instruction

At BIOMORV Ltd., solving problems demands investment and costs. These costs are currently not proportional to revenue since our task is to secure the buyers and customers needed to ensure revenue. These should, therefore, be considered anticipatory costs. Since BIOMORV is not directly involved in actual production and manufacture, it is chiefly a service provider; thus, the largest portion of cost is labor cost. The initial costs are detailed in Table 14.

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As we have mentioned before, we will co-operate with other companies to carry out some of the tasks of our company: e.g. technical development. Consequently, their activity will appear as a service in BIOMORV’s costs. Since we wish to have most of our anticipated sales occur abroad, we will need to continuously - depending on available money – file patent procedures in these target countries. Our business model does not rule out the possibility of marketing our know-how and patents in some countries; however, we only mention this now as possible option.

1.6.3. Potential Clients, Customers

1.6.3.1. Customer Profiles Buyers of our equipment and technology could be domestic or international:

Table 14. Details of initial expenses

Denomination Quantity Ft/month Ft/year €/year

Senior Manager (person) 1 900 000 10 800 000 35 410

Sales person (person) 3 600 000 21 600 000 70 820

Assistant (person) 3 300 000 10 800 000 35 410

Production control (person) 2 800 000 19 200 000 62 951

Marketing (person) 3 800 000 28 800 000 94 426

Investment agent (person) 4 600 000 28 800 000 94 426

Total 16 625 000 120 000 000 393 443

Wage contributions 24 000 000 78 689

Total wage 144 000 000 472 131

Car lease 6 200 000 14 400 000 47 213

Office lease (m2) 200 2 000 4 800 000 15 738

Telephone, mail, internet, webpage 3 000 000 9 836

Foreign trips (days) 200 60 000 12 000 000 39 344

Reference material 2 000 000 6 557

Workshop organization (b) 20 600 000 12 000 000 39 344

Personal service collaboration 40 000 000 65 574

Expert fees 5 000 000 16 393

Bookkeeping, legal advice 3 000 000 9 836

Stationery (paper and other consumables) 500 000 1 639

Total 240 700 000 789 180

Single purchase of equipment (Computer, printer, projector etc.) 8 000 000 26 230

In Total 248 700 000 815 410

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- Wastewater treatment plants or municipal waste disposal operating

companies or municipalities where: o there is mechanical dewatering equipment and municipal solid

waste is disposed of using RDF (SRF) technology. There is no equipment, digestion (biogas production) does not take place, and will not be developed (the co-incineration of sewage sludge and RDF waste) settlement of 30-50,000 inhabitants.

o mechanical dewatering equipment and drying equipment (or solar dryer) or the intention of developing it exists, the problem of municipal solid waste is otherwise resolved. (Mono-incineration of sewage sludge) for a settlement with a population of 140-160 000.

o sludge is processed through digestion, and the retained fermentation residue is sufficient to keep equipment operating. (Mono-incineration of fermentation residue) for a settlement of 210 to 250,000 inhabitants.

o digestion of sewage sludge takes place (biogas production), municipal solid waste RDF is processed using (SRF) technology. The combined amount of decanted fermentation residue and RDF together is enough to ensure the continuous operation of the equipment. (Co-incineration of fermentation residue and RDF) for a settlement with a population of 80-100 000.

o the settlement’s municipal solid waste is processed using RDF (SRF) technology. The remnants need to be disposed of safely.

o (RDF SRF incineration) a settlement of 40-60,000.

- In addition to this, any company or municipality where a large volume/mass of organic waste is produced and the possibility exists to make the dry matter content 50% either through drying or through additives. (Other waste incineration)

1.6.3.2. How can we acquire customers? See Marketing Strategy.

1.6.3.3. The Economic Viability of the Disposal of Certain Waste

Mixtures (Attainable results.) Our equipment and technology is connected to or integrated into an existing technology – thereby, in every circumstance it can be classified as

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an expansion. It follows that only the gross margin level of the result can be taken away. This is a good example of additional revenue which, together with the available savings, reduces the additional costs associated with the operation of the equipment. The payback time period obviously is a ratio of the cost of the equipment and technology and the amount of the collateral. Ownership costs are detailed point 1.5 and in Table 6. We prepared the business plan according to the earlier calculated waste composition, and we applied them to Hungarian costs and expected yield and income.

1.6.3.4. The Factors Influencing the Attainable Results for the

Use of the Equipment and Technology

Biomorv’s primary goal is to sell its results-producing equipment in domestic and foreign markets. However, awareness and knowledge of our equipment and process needs to be generated for the equipment and process to sell. The equipment generates profit through the following means: Factors that Increase Profitability

- Cost reduction or cost elimination in the areas of waste storage, preparation, manipulation, transportation.

- Reduction of gate fees/landfill disposal fees. - Revenue from the sale of generated energy, or savings in energy costs

if that energy is consumed

Factors that Decrease Profitability - The purchase of additional components. - Maintenance costs - Operator labor costs

We reported the calculation of the performance of existing equipment at - 1.6 MW - and for continuous operation, we reported (8,400 hours / year). These two pieces of data also determine the fuel needs for different versions of the equipment. The cost of landfilling (contributions + handling fees) in Hungary can be set at an average of € 40 / ton. Energy cost at € 0.1 / kWh. Wages and contributions have been calculated at € 3.3 / h.

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In alternative cases where no drying is needed, sufficient usable energy becomes available. As an option - we also took into account the production of wood chips utilizing the produced energy.

Phosphorus in the Ash

We performed sewage sludge tests and the subsequent ash and flue gas tests with the assistance of accredited organizations and laboratories over the course of many test incinerations. The presence of heavy metals in sewage sludge is a serious and well-known problem. (The danger posed by pathogenic or other toxic substances do not need to be considered as these are all safely destroyed during the incineration process.) All metallic elements form some sort of oxide during the the combustion process. Most of them have pH values of 4.5 to 11, which makes them insoluble and, thereby, unusable by plants. However, it contained a conspicuously large amount of phosphorus (20% of the total amount of dry matter). True, some of the compounds appearing in the ash (aluminum and iron phosphate) are not soluble; however, there are a wide variety of known research proceedings currently exploring this subject. In any case, this could be calculated as possessing value. We have signed a contract with Zoltán Bay Applied Research Nonprofit Kft. to determine the possible directions of phosphorus recovery from ash in terms of testing and technology development. The completed tests reveal that the ash contains a number of micro-elements essential to plants. Table 15 summarizes the results of the completed tests. The calculations were based on the amount of material in the sewage sludge. The existing “metal quantity” has to be somewhere in the sludge slated to be put in the incinerator, either in the flue gas or in the ash, or contained within the additive material emitted by the scrubbers. We assume that the total "amount of metal", within or without, is that which is emitted through flue gas. (Column 5) This amount was compared with the current regulation limits that sewage sludge compost dry matter requires. This reveals that the only limit value that was exceeded was the limit value of Zn. This fact hints at further possible uses for the ash.

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Table 15. The summary of ash testing

The examination of

Biokot ash Sewage

sludge test of

Eger

2012.09.2

6

What

should remain

after

burning

The

exhaust’s

measu

red

value

Differenc

e

Thresho

ld 50/200

1 k.

decree

4,09

PH

value

6,82

PH

value

10,79

PH

value

The

element

mg/dry matter kg

Residue

in ash % (5

column/

1 000

000)

The element’s effect

on the soil

1 2 3 4 5 6 7 8 9 10 11

As 4,59 38,26 0,22 38,04 75,00 0,82 0,11 0,10 0,004% Toxic element

Al 5 093,00 42 441,67 0,00 42 441,67 4,244% Neutral

B 33,89 282,42 0,00 282,42 0,028% Essential trace element

Ca 22 800,00

190

000,00 0,00

190

000,00

19,000

% Plant nutrition

Cd 1,01 8,44 0,11 8,33 10,00 0,10 0,10 0,10 0,001% Toxic element

Co 2,23 18,56 0,00 18,56 0,002% Toxic element

Cr 12,73 106,08 0,19 105,89

1

000,00 1,00 1,00 4,40 0,011% Toxic element

Cu 327,50 2 729,17 0,51 2 728,65 1 000,00 2,50 0,53 1,30 0,273% Essential trace element

Fe 2 910,00 24 250,00 0,00 24 250,00 2,425% Essential trace element

Hg 7,50 62,50 0,00 62,50 10,00 0,10 0,10 0,10 0,006% Toxic element

K 7 613,00 63 441,67 0,00 63 441,67 6,344% Plant nutrition

Mg 5 731,00 47 758,33 0,00 47 758,33 4,776% Essential trace element

Mn 423,90 3 532,50 0,25 3 532,25 0,353% Essential trace element

Mo 4,51 37,56 0,00 37,56 20,00 0,34 4,20 0,13 0,004% Essential trace element

Na 863,00 7 191,67 0,00 7 191,67 0,719%

Destroys soil

structure

Ni 12,02 100,17 0,01 100,16 200,00 10,00 1,30 1,00 0,010% Toxic element

P 24 610,00

205

083,33 0,00

205

083,33

20,508

% Plant nutrition

Pb 23,07 192,25 1,92 190,33 750,00 1,00 1,00 1,00 0,019% Toxic element

S 7 255,00 60 458,33 0,00 60 458,33 6,046% Neutral

Se 4,00 33,33 0,00 33,33 100,00 0,62 0,12 0,10 0,003% Toxic element

Sr 82,28 685,67 0,00 685,67 0,069% Toxic element

Zn 496,30 4 135,83 0,00 4 135,83 2 500,00 70,20 0,50 0,80 0,414% Essential trace element

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1.6.3.5. Potential Results of Using Some Waste Mixtures

Mono-incineration of Sewage Sludge

This method can be imagined (used) in sewage treatment plants where dewatering and drying equipment is present, but where mass reduction is the primary function of this equipment, and the dried sludge waste is either landfilled or transported to a waste incineration plant. There is no digestion. The generated energy of the installed equipment is used for drying. (According to Figure 3)

Combustion requirements and the needs and composition of the fuel were

developed from Table 16. In this variation, the annual requirement of dewate

red sewage sludge (contai

ning 20%

dry matter) is 14,224 t. This is what a wastewater treatment plant of a city with a population of 140,000 to 160,000 would “produce.” In this situation a large portion of the energy the equipment needs would be used for the drying of the sewage sludge, thus there would be no additional production of pellets.

Table 16. The fuel needs for the mono-incineration of sewage sludge

In 1 kg mix For 1 hour of operation

Fuel Composition

% Dry

matter

Heating

value

MJ/kg

Net

Heating

value

MJ

Total

weight

kg

Dry

matter

kg

Heating

value

MJ

Total

amount

t/year

Decanted sludge 60,00% 0,12 2,16 0,87 4 065 813 14 635 34 147

Dry sludge 40,00% 0,38 6,84 6,66 2 710 2 575 46 343 22 765

Total disposal 100,00% 50,00% 9,00 7,57 6 775 3 388 60 978 56 912

Wood chips 20 14 210 168

Wood pellets 90 81 1 464 759

The amount of ash 610 62 651 5 122

20% sludge needs T/year 14 228

Table 17. Cost Summary

Cost Item €

Costs of raw material 85 892 Wages 99 148 Material handling 1 056 Shipping 6 158 Maintenance 152 459

Local tax 11 571

Total 356 284

Table 18. Revenues and Savings

Denomination €/Year

Electricity 112 842 Heat 8 903 Landfill fee savings 649 681 Phosphorus recovered from ash 27 843

Total 799 270

Gross margin 442 986

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The operation of the equipment clearly involves additional costs. (Maintenance, wages, additional fuel – wood chips and pellets, the purchase of additives.) These can be seen in Table 14. The largest share of excess profit the equipment produces stems from the savings of landfill fees. (Table 15) The increasing costs and increase revenues combined with the savings in the results of the previous situation generates € 443,000 of excess profit (gross margin) annually.

The Co-incineration of Dewatered Sewage Sludge and RDF Waste

This method or variation is viable for "small cities" where neither sewage sludge digestion nor sewage sludge drying exists. Common practice in this variation is to give the dewatered sludge to a waste management company that will take it for a fee. However, RDF technology is used to deal with the municipal solid waste. Table 16 contains the fuel requirements. Through the required annual amount needed, it becomes clear that this amount of waste represents a small city with a population of 30-40,000. Combining the two treatment technologies could ensure the disposal of the small city’s organic waste.

Table 19. The fuel needs of dewatered sewage sludge and RDF waste co-incineration

In 1 kg mix For 1 hour of operation

Fuel Compositi

on % Dry

matter

Heati

ng

value

MJ/kg

Net

heating

value MJ

Total

kg

Dry

matter

kg

Heating

value MJ

Total

Amount

T/Year

Decanted sludge 40,00% 0,08 1,44 0,58 405 81 1 457 3 400

RDF 60,00% 0,42 5,88 5,27 607 425 5 950 5 100

Total disposal 100,00% 50,00% 7,32 5,86 1 012 506 7 407 8 500

Wood chips 20 14 210 168

Wood pellets 51 45 819 424

Amount of ash 91 8 436 765

20% Sludge needs

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This method or variation creates significant amounts of usable or marketable energy because there is no drying required. Depending on existing energy price levels, there are many possible alternatives for the recovered energy.

- If the power can be sold and sale prices are favorable (energy produced in this manner is considered green

energy, and its purchase price can be set at a higher rate), then selling the energy is probably the best option.

- In reverse circumstances, (low energy prices) self-utilization would be the better option.

If feasible, another option would be to utilize the energy for ancillary activities such as producing new and marketable products (e.g, wood pellet production) which could be quite profitable and should be taken into consideration. This option of producing wood pellets is the most favorable option in Hungary. It is more than likely that in a majority of European

countries, a good price can be fetched for high quality wood pellets. Of course, energy prices influence the profitability of this practice quite significantly. The calculated profitability of this variation is recorded in Tables 20 and 21. Without a doubt, the proportion of income generated depends greatly upon how the energy is utilized. Although landfill fees play a significant role here, they do not play nearly as significant a role in revenue as they did in the previous variation. The total mass of the material will be less here – hence, lower landfill fees. We think this version has the potential to create increased revenue for all European countries. The use of recovered energy in settlements, in sizes previously mentioned, would provide the alternative needed to ensure this revenue generation.

Table 20. Cost Summary

Cost item €/year

Without

pellet

production

€/year

Costs of raw material 249 696 88 039 Wages 99 148 99 148 Material handling 1 866 1 866 Shipping 7 121 7 121 Maintenance 152 459 152 459

Local tax 12 953 12 953

Total 523 243 361 586

Table 21. Cost Summary

Cost item €/year

Without

pellet

production

€/year

Costs of raw material 249 696 88 039 Wages 99 148 99 148 Material handling 1 866 1 866 Shipping 7 121 7 121 Maintenance 152 459 152 459

Local tax 12 953 12 953

Total 523 243 361 586

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Co-incineration of Fermentation Residues from Digestion and RDF

Waste

From the standpoint of energy, this the most favorable option by far. Slightly more than half of the energy contained

in the sewage sludge digestion is of very high efficiency (CHP unit energy efficiency 85% and nearly half of this is electricity) and can be recovered. The fermentation residue RDF waste is stirred, thus no energy consumption is needed for drying. Table 22 shows the required quantities of waste and how this method can resolve the complete organic waste disposal needs of a city with a population of 80-100,000. Whereas the level in this variation of energy consumption is only limited by consumption of the biogas plant, the amount of usable energy is quite impressive. (Almost 3,800 MWh of electricity and usable heat 40,000 GJ is available) Regarding the use of energy, all the alternatives that were mentioned in the previous variation are possible.

Table 22. The fuel needs of fermentation residue and RDF co-incineration

In 1kg mix For 1 hour manufacturing

Fuel Composit

ion % Dry

matter

Heati

ng

value

MJ/kg

Net

heating

value MJ

Total

weigh

t kg

Dry

matter

kg

Heating

value

MJ

Total

amount

T/year

RDF waste 50,00% 0,35 4,90 4,39 606 424 5 935 5 087

Fermentation residue 50,00% 0,18 2,33 0,50 606 212 2 816 5 087

Total disposal 100,00% 52,50% 7,23 4,89 1 211 636 8 751 10 174

Wood chips 20 14 210 168

Wood pellet 51 46 834 433

Amount of Ash 114 9 796 961

20% sludge needs 11 996

Table 23. Cost

Summary

Cost Item €/year

Without

pellet

production

€/year

Costs of raw material 538 434 89 359 Wages 99 148 99 148 Material handling 3 533 3 533 Shipping 8 194 8 194 Maintenance 152 459 152 459

Local tax 13 941 13 941

Total 815 708 366 633

Table 24. Revenues

and Savings

Without

pellet

production

€/year

Denomination €

Electricity 332 160 Heat 381 366 Laying fee savings 672 121 672 121 Phosphorus 45 034 45 034 Pellet sales 2 022 149

Total 2 739 304 1 430 680

Gross margin 1 923 596 1 064 047

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We should note that use of this particular method or variation has been qualified as desirable in all European countries. Differences in modes of recovery for fermentation residues exist. In some countries composting or immediate spread are the favored modes currently. Nevertheless, the opinions on the “waste owner” side tend toward something else entirely.

- The majority of farmers are averse to the direct use of fermentation residues on their farms. (Justifiably so, we believe.)

- It is becoming increasingly difficult to find an agricultural producer who would permit injection or spreading on their soil. (The procedure to obtain permits for these types of activities is extremely stringent.)

- Composting and its use in agricultural could be easier. Composting, as it is carried out by most owners of waste (sewage treatment plants, or municipal solid waste collection plants) is a money-losing activity because they need to buy additives to facilitate the process. Nowhere can compost be sold for the actual price it costs to make it. (Fees for the removal of waste are the true source of profit for most composting companies.)

This method and the additional cost resulting from the application of additional income (savings) are shown in Table 23 and 24.

With the available energy, 1400 kg of pellets can be produced per hour - if the user opts for the production of pellets. Although this requires a substantial amount of basic materials, its potential revenue can also be quite substantial.

1.6.3.6. The Payback Period for Each Variation /Method Table 25 summarizes the payback periods for each individual variation. It is clear that if you do not sell the generated energy, but use it to prepare

pellets (where

this is possible)

a more favorable

payback can be

achieved in both versions. This is the fundamental reason why the purchase price for produced “green energy” is the lowest in Europe.

Table 25. The gross margin and the payback period at various variants

Gross margin €/year Payback time (year)

The test variant Without

pelleting

With

pelleting

Without

pelleting

With

pelleting

Mono-incineration of sludge 442 966 7,68 Co-incineration of sludge and RDF

537 959 746 300 6,32 5,13

Fermentation residue + RDF 1 064 044 1 923 596 3,20 1,99

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1.6.4. Sales Channels

1.6.4.1. Sales in Hungary

We expect direct sales in Hungary. We can pinpoint exactly which companies can be considered customers and of these, how many are experiencing problems dealing with potentially harmful organic waste. (As an aside, the previously noted Hungarian companies are the source of 62% of total sewage sludge.) We can approach these companies directly and suggest possible solutions for their waste disposal problems.

1.6.4.2. Sales in Foreign Countries

As we reported earlier, our primary target markets are in countries in which there is a relatively high proportion of organic waste for disposal in landfills and relatively realistic landfill fees (fees that are in complete compliance with EU directives). Through Eurostat data and other channels we have been able to glean some awareness of possible quantities of waste and the potential companies with which we could do business. We will certainly contact these potential companies and make them aware of the possibilities we offer. We have established syndicated relationships with many foreign educational institutions and companies – mostly German and Austrian firms, (chief among them GARANTFILTER who deliver the scrubbers). It goes without saying that we are keen to utilize their connections and knowledge for mutually beneficial use. Some specific agreements have been made in this regard. We plan to locate associations of waste processing companies (advocacy organizations). We shall endeavor to give them the most accurate description of our equipment and all of its inherent benefits in an effort to win their support, which we value highly and is important to us. We wish to establish a relationship with them that is based on mutual interests. (In certain cases, the possibility of joint marketing is also conceivable.) We will also approach environmental organizations to inform them of the environmental benefits of our equipment and technology.

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1.6.4.3. Marketing Strategy

The basic elements of our marketing strategy are as follows: The proposed equipment and technology:

- This is the safest method of disposal of organic waste that poses a risk. (No one disputes this.)

- Organic waste with a moisture content of up to 50% can be thermally treated without any preparation whatsoever.

- Waste is not transported to a processing plant; rather, we install the equipment at the waste site.

- With this: o costs can be reduced o risk of contamination /pollution are reduced (there is no need

to transport the waste)

- The equipment can be connected to and integrated into every waste disposal technology.

- The equipment generates energy without the need to consume fossil fuels.

- The equipment can be fitted with modular attachments and components that make it possible to utilize the generated energy in a variety of ways.

- Possible phosphorus recovery could aid soil replenishment. - The process achieves the largest waste mass reduction possible.

These listed capabilities and possibilities of the equipment and the technology are all verifiable; the significance of these capabilities can vary from one country to the next. In places where the waste disposal fee is relatively high, the reduction of the mass of the waste is crucial. Elsewhere the production of energy is of utmost importance (especially where the prices for green energy are high). In places where environmental impact is considered paramount, we will stress the issue of removing heavy metals from waste. We think phosphorus recovery as an option will be of interest to all European countries. There is no basis of comparison regarding the price of the equipment because – to our knowledge – there is no other waste disposal equipment on the market that could match the capabilities listed above.

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By comparison, we will say a basic installed equipment unit is able to dispose of 1 tonne of waste. This amounts to 106 €. If we adjust the operating cost for incinerators in Hungary for inflation, then the annual capacity of 1 tonne would reap 103-170 €. So we are still competitive in terms of price. (Relevant data for western European does not exist, but considering the overall tendencies regarding price, we believe we are competitive in terms of value.)

1.6.5. Financial Planning The project, that is the manufacture and sale of the equipment, can begin when the start-up capital is available for use. The apparatus for the manufacture of additional equipment and the organization of the sales unit is necessary and should begin operations. In turn, this can only be achieved if we can market and sell at least 3 units. The preliminary agreement to accomplish this is in place and we have the partners needed to manufacture the needed equipment. (The costs associated with all of this will be recovered afterward.) The additional annual revenue appears in Table 12, while the start-up costs are outlined in Table 14. The planned costs are almost all fixed costs. This is understandable, since BIOMORV’s activities are not involved in any direct material or direct energy consumption. The size of the order backlog reflects the effectiveness of the work of the employees. Nevertheless, there are activities where an employee will only be able to complete small amounts of work, regardless of how efficiently the employee works. (Preparing a study or report,

Table 26. The planned development of gross margin for the

first 10 years Me= €/year

Year Amount Total

income

Personal

patent fee

Total

costs

Gross

margin

0 3 1 003 279 177 049 815 410 10 820 1 6 2 006 557 354 098 789 180 863 279 2 10 3 344 262 590 164 789 180 1 964 918 3 15 5 016 393 885 246 865 600 3 265 548 4 15 5 016 393 885 246 865 600 3 265 548 5 20 6 688 525 1 180 328 865 600 4 642 597 6 20 6 688 525 1 180 328 865 600 4 642 597 7 25 8 360 656 1 475 410 902 400 5 982 846 8 25 8 360 656 1 475 410 902 400 5 982 846 9 25 8 360 656 1 475 410 902 400 5 982 846

10 25 8 360 656 1 475 410 902 400 5 982 846

Total 189

63 206

557 11 154 098 9 465 770 42 586 689

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defining equipment modules, updating plans, formalizing investment, quality assurance.) Thereby, the number of employees will have to be increased if the manufactured quantity exceeds a certain level. Increasing staff will also contribute to increasing cost. The relative amount of work per unit is determined by analyzing the values of which number should be increased. These “leaps in cost” are active in Table 26, which goes through the formation of annual financial amounts. The financial plan should take into account that patent fees are applied to people, so these amounts cannot be classified as a "business expense” because the owner is entitled to the patent.

1.7. The Development of an Intellectual Property

Protection and Industrial Property Rights

Strategy

The patent and trademark protection process, including the patent and utility model protection filing of in Hungary, aims to achieve the following objectives:

: 1. On-site waste disposal at the source of the waste (or short transport routes to regional disposal sites), thus minimizing the risk to the environment and health by reducing or eliminating transport and disposing of waste with minimal CO2. With the utilization of thermal treatment, there is no need to implement any hygiene investments at wastewater plants. 2. Energy efficient, low-emission sludge drying and dewatering with on-site weight reduction. 3. Energy production from waste: Heat energy recovery in different processes (internal and external). 4. CO2 -neutral heat and power production (without the use of fossil fuels). 5. Ash processing for the purpose of soil enrichment.

For the time being the owners, that is BIOMORV Ltd. Respectively – possess

Hungarian intellectual property and patent applications. Industrial property and

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utility model protection proceedings, which protects ongoing manufacturing

technologies, have commenced. They include:

• "procedures for incinerators and solid fuels , especially renewable fuel

gasification" named invention (Hungarian National Patent Procedure

file number : P1300382) , primarily a special "combustion grate

incinerator” which is the basis for achieving the ultimate technology.

• BIOFIVE® is in the process of filing a patent and utility model which is suitable for and fulfills the above five conditions simultaneously: “BIOFIVE® equipment and process thermally disposes of high moisture content (up to 49%) organic waste without the use of fossil fuels, while securing energy profit."

Note: the joint development and ownership of the Ferenc Morvai incinerator in Eger and any intellectual and community development it involved ended on March, 27 2015. Forthwith, BIOMORV Zrt. has permanently suspended its relationship with the incinerator in Eger, and with Ferenc Morvai and its related companies. All accounts with Ference Morvai and the Morvai Kazán Magyarország Kft. have been settled and closed and our current and future activities are not related to them in any way whatsoever.

1.8. Achieving Potential Customers and Partners From 2013-2015 we explored countless potential opportunities to access the market. We are currently engaged in intensive marketing campaigns in order to reach and attain new customers and partners. Through a variety of channels, we ceaselessly endeavor to reach out to potential customers and raise the awareness of our products. Hungary We find and reach out to potential buyers directly. We are currently a part of professional organizations in Hungary. We are present at professional events. We strive to influence the decision-making processes. We have established strong relationships with environmental decision-makers as well.

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Europe We are promoting our product program within the framework of the Danube Region Strategy. Through the help of our international partners, we can target specific names and players. We are present at professional events. We introduced and described our product within the framework of the Innoenergy proposals.

1.8.1. Workshop Experiences

We completed the equipment in August of 2013. Subsequently, we attended many presentations and conferences at which we introduced the equipment and described its operational benefits.

Table 1. The topics of organized exhibitions and conference dates

Number Date Nature/Title Participants

1 08.28.2013. Demonstration during operation

Ministry, Municipal Government

2 09.09.2013. Experience exchange HUBER Company representatives of Straub Incinerator

3 11.19.2013. Preparing for cooperation with the Capital city

4 12.13.2013. Investor meetings Domestic and foreign experts, Mayors

5 01.17.2014. Investor meetings 6 02.06.2014. Gödöllő City’s waste

treatment Meeting with city professionals

7 02.17.2014. Premiere Ministry of National Development, Universities

8 05.29.2014. Meeting with cooperating partners

9 09.24.2014. The visit of Innovation Office of Hungary

10 09.26-28. 2014.

RUSSE conference

11 01.28.2015. Stuttgart conference 12 03.23.2015. Workshop

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13 03.26.2015. Project financing conference

1. . The following appeared at the presentation: Dr. Zoltan Illés, Secretary of State Responsible for the Environment, Dr . Imre Boros, Minister, Zsolt Wertán of ENVIRONDUNA Preparatory Investment Kft. (Capital Representation) and Laszló Gaál Naturaqua Kft. (Kowia - metropolitan consultant). Also present were representatives from the Heves County Waterworks Company and representatives from the environmental protection authority. The Secretary of State at that time, Dr. Zoltan Illés, concluded that: "This is the modern method for sewage sludge disposal and recovery. It is a new milestone!”

2. We reached an agreement with HUBER TECHNOLOGY concerning the capability of supporting each other’s ventures. Among other things, HUBER TECHNOLOGY is a world market leader in sewage sludge management and drying that can support our incinerators. We decided to proclaim a

memorandum of cooperation and mutually support each other in some key issues including Budapest’s sewage sludge disposal problem. Although HUBER TECHNOLOGY does not manufacture or market electricity generation equipment, its supplier connections can help us procure the best products on the market.

3. We reached R&D cooperation agreements the City of Budapest after they, together with professionals from The Ministry of the Interior, viewed the plant in Eger. The agreement determined:

a. The intent to fully realize the utilization of energy production through thermal treatment for a variety of sewage sludge and municipal solid waste;

b. The sewage sludge is not transported; the equipment connects directly to existing technology. The thermal decontamination

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and energy recovery equipment is brought straight to the source or origin site.

c. Useful materials are extracted from the combustion chambers: e.g. phosphorus, the recovery of which is crucial to the agriculture industry who can utilize it.

4. Presentation and demonstration of the incinerator in the sewage plant in Eger for foreign and domestic investors and representatives. Present at the event were: Alexander Krimszkij, representative for African and Middle Eastern investors; Jozsef Bárkovics, a representative for Korean and Kenyan investors; József Clement, representative of Swiss private investors; Erminio Ramos, who represented Colombia’s regional investors). Every participant considered the equipment and process viable and expressed interest in it.

5. During the investor conference, which was attended by investors and potential buyers, all the major parameters of the equipment and the

economic calculations were discussed. We went over the official documented results and allowed the participants to see the equipment during operation as it received materials. The participants were convinced that the operation of the equipment carries no known risks with it. This opinion was supported by the measurements, laboratory analyses of air quality, and waste management data we provided.

6. The participants: (BIOMORV and specialists from the City of Gödöllő). The city's waste processing was reviewed. The City of Gödöllő’s wastewater treatment plant collects approx. 8 m3 of 20% dry matter digestion sewage sludge daily. Modernization and renovation of the wastewater treatment plant is currently underway. About 1 kilometer

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from the wastewater treatment plant is the regional waste management center operated by ZÖLDHÍD. Here cutting edge technology has been developed according to the best waste management practices. Also, 37 t of RDF grind is produced here daily which makes it suited to the BIOFIVE - ENTECCO Waste Recovery Mű® equipment with technology fitted into thermal energy recovery. This results in heat and energy that can be sold. The economic analysis concluded savings could be achieved in green energy production and sales, primary heat, landfill fees, and transportation.

7. We fired up the thermal waste disposal and recovery equipment for NFÜ because they wished to learn about the operational conditions of the equipment. The presentation was attended by the Ministry of National Development, the Technical University of Budapest, Gödöllő

University of Agricultural Sciences, the University of Miskolc, the FVM Institute of Agricultural

Engineering, representatives of the Penta Kft., and some investors. After visiting the plant, the NFÜ requested evaluations by the experts from the University of Miskolc

and Technical University of Budapest. (These evaluations have since been completed; both institutions found to equipment to be suitable to the task.)

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8. The participants of a meeting to establish mutually-beneficial relationships on projects with cooperating partners. These include:

a. Thermal disposal thereby significantly reducing the waste stream;

b. energy storage, energy recovery and production of green electricity;

c. investigations concerning the residue (ash) and recovery of useful materials (e.g. phosphorous);

d. cleaning up the catchment area of the Danube that have been polluted by landfill waste residues;

e. production and organization of training.

9. Representatives of the Hungarian Innovation Office inspected the equipment.

10. We gave a presentation about our equipment at the Russe Conference.

11. We introduced the technology energy efficiency and environmental departments of the Danube Strategy at the third meeting of the Working Group in Stuttgart on January 28, 2015 at which eight countries were represented. The presentation generated a high level of interest; several questions were addressed, and a number of requests were received as well.

12. During the end-user conference, it became clear that one of the biggest problems with sewage sludge and waste management is the strong presence of 'composting' in the management of sewage sludge, which is regularly presented (according to plan) as the best return on investment. Current practice in Hungary is to leave out or ignore the incriminating evidence behind composting: the material losses incurred and the environmentally harmful emissions that come with the practice. During the consultancy conference, Zoltán Bay Applied

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Research Coordination Nonprofit Kft. introduced possible theories concerning the recovery of phosphorus.

13. Ministry of Foreign Affairs and Foreign Trade event: Danube Region Strategy Project Finance Conference (Danube Palace). Participants included: Csaba Zsámbok of B Power, our Czech partner company (potential supplier of ORC power generating equipment), and the German company Entecco, as well as the ENTRD organization and our partner Barnabás Búza.

March 31, 2015. Dr. Gábor Garamszegi Chief Executive Officer

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ATTACHMENTS FOR FIGURES – THESE CAN BE

INSERTED INTO THE FIGURES IN THE DOCUMENT. ATTACHMENTS FOR FIGURES

Figure 2. The Basic Design of the Equipment

Incinerator Flue Gas Scrubber

High Moisture Sewage Sludge – Pellet Container – Dry Sewage Sludge

Holder – Thermal Oil Heat Exchanger

Straw – Wood Chips – Wood Shredder – Energy recovery equipment

tailored to the needs of a given location – Flue Gas/Air Exchanger –

Controller

Wedge Mixer – Combustion Grate – Afterburner – Flue Gas/Water

Exchanger – Garantfilter Flue Gas Scrubber

Ash – Heat Exchangers/ORC/Other – Separated Dust

Figure 3.

Mono-incineration of Sewage Sludge

Dewatered (20%) sewage sludge

Total sewage sludge disposal for a city of 160-180,000

Dried (90%) sewage sludge – Heat – ORC equipment – Ash < 10% of

original mass – waste landfill

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Electricity to sell, or for own consumption – Electricity – 12-15%

phosphorus recovery

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Figure 4.

Co-incineration of Sewage Sludge and RDF Waste

Total disposal of organic waste for a city of 30-40,000

RDF waste 70 %

Production of combustible fuel (wooden pellets) using self-generated

energy, marketing of wooden pellets

Purchase of wood chips

Figure 5.

Co-incineration of digestion, fermentation residue and RDF waste

Dewatered sewage sludge (20%) – Generated electricity and heat to

sell or for own use – Organic waste disposal for a city of 80-100,000

Fermentation residue, RDF waste

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Figure 6, 7, 8, 9 (megtakarítás = savings)

1. Mono-incineration of sewage sludge

2. Solar incineration of sewage sludge

3. Sewage sludge + RDF

4. Mono-incineration of fermentation residue

5. Fermentation residue and RDF

Absorbents Wooden Pellets Disposal of absorbents Absorbent conveyance Landfill transport of absorbents

Emissions Wood Chips Wood Chip conveyance

Ash decontamination Ash transport RDF transport Biogas production from sewage sludge

Water usage Thermal energy Lubricants

Sewage sludge incineration without credit

Electrical energy Wood chips Potassium chloride

Compost discharge Composting Landfilling of waste remnants

Transport of remnants

lime Silicate Phosphorus / phosphate RDF decontamination methane Incineration of waste lubricants Fertilizer savings

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Figure – Value Chain

households Water fee – wastewater production – rubbish fee – rubbish production waste collection

Waste (rubbish) collection – waste(rubbish) fee revenue

Waste sorter

Waste water rubbish Operational costs – waste sorting – waste fee revenue Landfill charge for remaining waste – assessing of valuable materials

Sewer system works

Operational costs – operation of sewer system – water fee revenue

Wastewater treatment

Operational costs – wastewater treatment – water fee revenue - Electricity costs - Landfill fees - Official fees

Biogas Plant

Sludge, sludge Biogas production – revenue from energy sales Fermentation residue – RDF waste

BIOMORV sludge technology

Operational costs – Biomorv sludge disposal – revenue from energy sold Combustion fuel costs – revenue from fertilizer ingredients

Waste Incinerator

Useful materials – operational costs – RDF combustion – electricity and thermal energy revenue Combustion fuel costs

Agriculture Fertilizer costs – Agricultural spreading – ash - ash Waste Landfiller

Operational costs, other fees – sludge landfilling – revenue from landfill fees Operational costs – waste landfilling – revenue from landfill fees

Figure Corporate Structure

Technical Development

Incinerator Development – System Integration

Testing – Phosphorus Recovery

Patenting

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Business Development

Business Development

Tenders/Proposals – Sales – Finance – Marketing

Sales Hungary – International Sales