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National Renewable Energy Laboratory 

Innovation for Our Energy Future 

Biomass Support for the China Subcontract Report 

NREL/SR-710-40625 Renewable Energy Law October 2006 

Final Report 

December 2005 

Center of Renewable Energy Development 

Beijing, China 

Energy Research Institute 

Beijing, China 

National Development and Reform Commission 

Beijing, China 

NREL is operated by Midwest Research Institute Battelle Contract No. DE-AC36-99-GO10337 
Subcontract Report 

NREL/SR-710-40625

October 2006 

Biomass Support for the China 

Renewable Energy Law

Final Report 

December 2005 

Center of Renewable Energy Development 

Beijing, China 

Energy Research Institute 

Beijing, China 

National Development and Reform Commission 

Beijing, China 

NREL Technical Monitor: D. Lew

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CONTENTS 

1 Domestic biomass energy technology development and application................................................... 1

1.1 Biomass energy resource status..................................................................................................... 1

1.1.1 Crop straw resource ............................................................................................................... 1

1.1.2 Forest residue resource........................................................................................................... 2

1.1.3 Animal excrement resource.................................................................................................... 3

1.1.4 Industry organic waste water.................................................................................................. 3

1.1.5 Municipal solid waste ............................................................................................................ 4

1.2 Biomass energy technology utilization status ............................................................................... 5

1.2.1 Crop straw utilization............................................................................................................. 6

1.2.2 Animal excrement utilization ................................................................................................. 7

1.2.3 Industry waste disposal .......................................................................................................... 9

1.2.4 Municipal solid waste and sewage disposal as energy........................................................... 9

1.3 Biomass generation power technology summary........................................................................ 10

1.3.1 Agriculture and forest residue generation power technology............................................... 10

1.3.2 Animal excrement generation power.................................................................................... 11

1.3.3 Industry waste utilization ..................................................................................................... 12

1.3.4 Municipal solid waste .......................................................................................................... 14

2 Foreign biomass energy technology development and application.................................................... 16

2.1 Biomass energy utilization in the some countries....................................................................... 16

2.1.1 United States ........................................................................................................................ 16

2.1.2 Europe .................................................................................................................................. 16

2.1.3 Other countries..................................................................................................................... 17

2.2 Biomass generation power technology summary........................................................................ 17

2.2.1 Direct-fired power generation .............................................................................................. 17

2.2.2 Gasification power generations............................................................................................ 19

2.2.3 Co-fired power generation power ........................................................................................ 20

2.2.4 Anaerobic Digestion generation power................................................................................ 20

3 Biomass energy technology application perspective ......................................................................... 21

3.1 Straw utilization analysis ............................................................................................................ 21

3.1.1 Characteristic of straw utilization in large scale .................................................................. 21

3.1.2 Technology scale and feasibility .......................................................................................... 22

3.2 Animal excrement utilization analysis ........................................................................................ 23

3.2.1 Technology utilization scale................................................................................................. 23

3.2.1 Technology feasibility.......................................................................................................... 23

3.3 MSW utilization assessment ....................................................................................................... 23

3.3.1 Characteristic ....................................................................................................................... 24

3.3.2 Technology method.............................................................................................................. 25

iii 
4 Biomass energy available potential analysis...................................................................................... 27

4.1 Agriculture and forest residue potential ...................................................................................... 27

4.2 Animal excrement potential ........................................................................................................ 28

4.3 MSW potential ............................................................................................................................ 28

5 Biomass energy policy suggestions ................................................................................................... 30

5.1 Biomass energy policy in China ................................................................................................. 30

5.1.1 Regulation about on-grid price of biomass generation ........................................................ 30

5.1.2 Economy policy ................................................................................................................... 31

5.1.3 Related environment policy published................................................................................. 33

5.2 Foreign biomass policy ............................................................................................................... 34

5.2.1 Feed-in tariffs ....................................................................................................................... 34

5.2.2 Renewable portfolio standard (RPS).................................................................................... 40

5.2.3 Bidding system..................................................................................................................... 42

5.2.4 Investment subsides ............................................................................................................. 43

5.2.5 Tax incentive policy ............................................................................................................. 44

5.2.6 RD&D budgets..................................................................................................................... 46

5.2.7 National protection measures............................................................................................... 46

5.3 The suggest for Renewable Energy Law detail rule.................................................................... 47

5.3.1 Enhance the recognition of biomass utilization and development, and establish definite 

long& medium targets for biomass development ................................................................ 47

5.3.2 Enhance biomass energy technology RD&R, pilot, and demonstration .............................. 48

5.3.3 Constitute and embody feed-in tariff to accelerate biomass generation power 

development......................................................................................................................... 49

5.3.4 Provide investment subsidy to accelerate the development of biomass gas fuel and supply

heating.................................................................................................................................. 51

5.3.5 Enlarge the range of pilot and demonstration to promote biomass liquid fuel development52 

5.3.6 Research RPS and implement RPS in small range and suitable time .................................. 52

5.3.7 Reduce and exempt the taxation to support biomass energy development .......................... 53

iv 
Final Report 

1 Domestic biomass energy technology development and application 

1.1 Biomass energy resource status 

1.1.1 Crop straw resource 

Based on Assessment Report of Biomass Resource in China in this project, the availability of 

straw resource should be considered because the straw output in theory is less meaning for the 

biomass utilization. The availabilities of straw resource in each province in 2002 are shown in Table 

1-1-1. In this table, the total amount of straw as energy is about 250 million tons. 

Table 1-1-1 Straw resource availabilities in each province in 2002(10000 tons) 

Province 

Total straw 

output 

Paper raw 

material Forage Fertilizer 

Energy and 

abandon 

Beijing 99.8 0.3 4.4 15.0 80.1 

Tianjin 167.3 6.7 15.6 25.1 119.9 

Hebei 2746.4 102.9 536.6 412.0 1695.0 

Shanxi 990.4 70.7 269.6 148.5 501.5 

Inner 

Mongolia 

1771.4 21.8 0.0 265.7 1484.0 

Liaoning 1700.3 71.7 370.5 255.1 1003.0 

Jilin 2703.9 68.3 456.9 405.6 1773.1 

Heilongjiang 3166.5 53.9 629.0 475.0 2008.6 

Shanghai 99.0 1.1 4.4 14.9 78.7 

Jiangsu 2516.0 38.6 104.2 377.4 1995.9 

Zhejiang 706.6 29.8 47.7 106.0 523.1 

Anhui 2747.9 38.6 953.0 412.2 1344.0 

Fujian 575.1 81.6 153.6 86.3 253.7 

Jiangxi 1150.3 41.8 490.3 172.6 445.7 

Shandong 4044.1 57.1 1055.6 606.6 2324.8 

Henna 4674.4 288.7 1547.6 701.2 2136.9 

Hubei 2028.8 49.6 471.1 304.3 1203.8 

Hunan 1955.7 97.5 595.8 293.4 969.0 

Guangdong 1143.1 86.4 556.3 171.5 329.0 

Guangxi 1174.7 25.0 892.5 176.2 80.9 

Hainan 149.2 1.0 120.4 22.4 5.4 

Chongqin 948.2 31.6 351.9 142.2 422.5 

1 
Sichuan 2808.2 93.6 1042.2 421.2 1251.1 

Guizhou 1098.2 6.5 911.6 164.8 15.3 

Yunnan 1270.0 20.5 976.1 190.5 83.0 

Tibet 29.3 0.0 0.0 4.4 24.9 

Shaanxi 1021.3 89.0 308.0 153.2 471.0 

Gansu 747.5 8.9 0.0 112.1 626.5 

Qinghai 97.6 0.3 0.0 14.6 82.7 

Ningxia 285.6 11.3 0.0 42.9 231.5 

Xinjiang 1301.3 16.0 0.0 195.2 1090.1 

Total 45917.9 1510.7 12864.9 6887.9 24654.4 

Share 100.00 3.29 28.02 15.00 53.69 

1.1.2 Forest residue resource 

The forest residue is a high quality feedstock for the biomass generation electricity. But it is 

impossible and unpractical to utilize forest radiuses in the large sized power plants at the current 

situation in China. For water and soil conservation, the country has paid attention to the afforestation 

and the protection of forest, and strictly controlled the forest felling. Therefore, the forest residues are 

utilized to generate electricity in large-scale cannot realize during long times. The feedstock of forest 

residue will mainly come from felling areas and residue from processing factories. 

In Table 1-1-2, the availability of forest residue for large power plant is about 24.77 million m3 

. 

Table 1-1-2 Forest processing residues availability in each province(10000 m3) 

Province Log Wood residues Sawn timber Sawn timber residues Total 

Beijing 7.2 1.3 0.0 0.0 1.3 

Tianjin 0.0 0.0 0.0 0.0 0.0 

Hebei 40.9 7.4 41.2 16.5 23.9 

Shanxi 4.2 0.8 0.5 0.2 0.9 

Inner Mongolia 304.3 54.8 4.5 1.8 56.6 

Liaoning 116.6 21.0 31.4 12.6 33.6 

Jilin 389.1 70.0 24.2 9.7 79.7 

Heilongjiang 512.0 92.2 10.4 4.1 96.3 

Shanghai 0.0 0.0 0.0 0.0 0.0 

Jiangsu 32.0 5.8 25.5 10.2 16.0 

Zhejiang 218.7 39.4 158.1 63.2 102.6 

Anhui 246.1 44.3 30.4 12.2 56.5 

Fujian 459.1 82.6 61.0 24.4 107.0 

Jiangxi 279.9 50.4 31.7 12.7 63.1 

Shandong 45.0 8.1 83.0 33.2 41.3 

Henna 180.7 32.5 3379.0 1351.6 1384.1 

2 
Hubei 77.0 13.9 5.4 2.2 16.0 

Hunan 427.8 77.0 106.3 42.5 119.5 

Guangdong 253.9 45.7 65.3 26.1 71.8 

Guangxi 376.8 67.8 56.7 22.7 90.5 

Hainan 22.4 4.0 7.3 2.9 7.0 

Chongqin 9.9 1.8 21.7 8.7 10.4 

Sichuan 3.2 0.6 0.0 0.0 0.6 

Guizhou 17.5 3.1 2.4 1.0 4.1 

Yunnan 161.2 29.0 35.1 14.1 43.1 

Tibet 17.0 3.1 5.0 2.0 5.1 

Shaanxi 6.4 1.2 0.3 0.1 1.3 

Gansu 0.0 0.0 0.0 0.0 0.0 

Qinghai 2.3 0.4 0.0 0.0 0.4 

Ningxia 0.2 0.0 0.0 0.0 0.0 

Xinjiang 8.7 1.6 0.0 0.0 1.6 

Daxinanling 216.1 38.9 10.4 4.2 43.1 

Total 4436.1 798.5 4196.8 1678.7 2477.2 

1.1.3 Animal excrement resource 

The large-sized utilization of animal excrement is also based on the collection. Therefore, the 

resource amount excludes the scattered feeding. Because the excrement cannot difficultly collected, 

the resource amounts of horse, ass, mule and camel are deducted from livestock, at the same time, the 

resource amounts are deducted from the total amount in Inner Mongolia, Xinjiang, Tibet and Qinghai. 

The data come from Basement Report of Biomass resource in China. 

Based on research result, the availability of animal excrement resource amounts to 112 million 

tons. Table 1-1-3 lists the availability of animal excrement of each type. 

Table 1-1-3 Availability of animal excrement 

Kinds Availability(10000 tons) Standard coal (10000 tce) 

Cattle 4714.6 2220.6 

Sheep 148.0 78.3 

Pigs 3966.2 1701.5 

Poultry 2392.9 1538.7 

Total 11221.8 5539.1 

1.1.4 Industry organic waste water 

According to data from Ministry of Agriculture, production of wastewater is about 846 million 

tons in light industry (include alcohol, sugar, beer, yellow wine, distilled spirit, amylum, monosodium 

glutamate, beverage and paper), and 1.67 billion tons in other industries (such as medicine, meat, 

cooking oil, sauce, can, oil chemistry industry, nature rubber and pyromucic aldehyde etc.) 

3 
The production of industry wastewater is about 28.5 billion tons in major industries shown as 

Table 1-1-4. 

Table 1-1-4 Production of industry wastewater 

Industry 

Production 

(10000 tons) COD(ton) Thickness of COD 

(%) 

Food processing 86764 636574.6 0.07% 

Food Manufacturing 32077 186393.2 0.06% 

Beverage Manufacturing 35887 244643.9 0.07% 

Leather, Furs, Down and Related 

Products 

11874 66622.6 0.06% 

Timber Processing, Bamboo, Cane, 

Palm Fiber and Straw Products 

4047 19594.5 0.05% 

Papermaking and Paper Products 319303 1639084.1 0.05% 

Medical and Pharmaceutical Products 36691 192608 0.05% 

Residential wastewater 2325422 7829006 0.03% 

Total 2852065 10814526.9 

1.1.5 Municipal solid waste 

At present, there are 660 cities in China. The population exceeds 1 million persons in 34 cities. 

Table 2-1-5lists the outputs of MSW of each province. 

The heating value of MSW is closely related to economic development and average income level 

in the city. At the same time, the utilization of MSW will be directly influenced by MSW classifying. 

In economic developed cities of China, such as Shanghai, Beijing, Guangzhou and so on, the heating 

value of MSW is about 1500kcal/kw. The heating value of MSW is below 1000 kcal/kw in the 

common cities. 

Figure 1-1-5 Resource quantity of municipal solid waste (10000 tons) 

Province Residential waste disposal Night soil disposal 

Beijing 321.4 311.7 

Tianjin 162.6 25.6 

Hebei 681.7 147 

Shanxi 871.9 196.2 

Inner Mongolia 379.8 99.3 

Liaoning 774.4 152.4 

Jilin 619.8 143.9 

Heilongjiang 1007.3 256.7 

Shanghai 376.9 194.1 

Jiangsu 723.2 400.1 

4 
Zhejiang 576 120.9 

Anhui 357.9 43.1 

Fujian 251 29.4 

Jiangxi 205 24.6 

Shandong 888.9 122.7 

Henna 607.5 85.2 

Hubei 760 119.6 

Hunan 459.4 50.3 

Guangdong 1315.5 356 

Guangxi 195.5 19.3 

Hainan 73.5 9.1 

Chongqin 211.7 31.6 

Sichuan 471.1 68.4 

Guizhou 173.7 6.3 

Yunnan 174.6 54.9 

Tibet 0.8 

Shaanxi 277.4 11 

Gansu 232.5 23 

Qinghai 79 43.6 

Ningxia 99.4 8.4 

Xinjiang 321.4 4.3 

Total 13650 3159.5 

1.2 Biomass energy technology utilization status 

The biomass energy utilization is mainly in rural area except for industry waste and MSW, 

especially straw and animal excrement. Table 1-2-1 lists the energy consumption of rural energy in 

China in 2003. The consumption of straw and firewood accounts for 56.2% of total residential energy 

consumption, which is the most consumption type in rural residential energy in China. 

Table 1-2-1 China rural energy consumptions in 2003 

Type Residential energy Industry energy Total Share 

Unit (10000 tons)(10000 tce)(10000 tons)(10000 tce)(10000tce)(%)

Total 46127.22 35037.63 81164.85 100.00 

Straw 33296.07 14284.1 14284.1 30.97 

Firewood 20375.6 11634.5 5534.63 3159.94 14794.44 25.22 

Coal 21435.29 15304.75 26563.12 18966.13 34270.88 33.18 

Electricity 7502956.9 3001.83 15127757.75 6051.05 9052.88 6.51 

Oil 704.57 1007.55 3527.26 5044.04 6051.59 2.18 

Biogas 460590.27 330.21 330.21 0.72 

LPG 311.54 533.99 533.99 1.16 

5 
Nature gas 15315.38 20.33 20.33 0.04 

Coal gas 17427.5 9.96 9.96 0.02 

Coke 1926.31 1816.47 1816.47 

Solar energy 3861.46 

Notes: 1. Source: Rural Energy Statistic Yearbook 

2. The unit of electricity is 104

kwh in table. 

3. The unit of biogas, nature gas and coal gas is 10 thousand m3

 in table. 

4. The energy consumption of solar energy means the installed acreage of solar water heater. 

In table, the unit is 10 thousand m2 

1.2.1 Crop straw utilization 

The agriculture and forest residue is mainly used as energy in direct-fired. Recently, through the 

support of government, the advance utilization of agriculture and forest residue has been developed. 

The main methods are straw gasification to supply gas for rural resident, char fuel, and solidified fuel. 

The status of residue advance utilization is shown in Table 1-2-2. The total output is about 1360 

thousand tons. 

Table 1-2-2 China rural straw advance utilization in 2003 

Utilization method 

Supply gas amount Number Supply output Straw consumption 

(household) (site)(10000 m3 ,10000 tons) (tons )

Straw gasification to supply gas 106676 525 17500.37 100596 

Char fuel 18 4366 12558 

Solidified fuel 2 450 23175 

Total 136329 

Source: Rural Energy Statistic Yearbook 

Furthermore, China government (mainly Agriculture Department) also supports to improve the 

efficiency of cooking stove for direct-fired straw. The heat efficiency of traditional cooking stove is 

only 5-8%, but the heat efficiency of alteration stove can reach 30% in test, and 18-22% in using, 

which can save a lot of biomass resource. Therefore, the government arranges many projects of 

alteration cooking stove in rural every year. Table 1-2-3 shows the status of alteration stove. In the end 

of 2003, the alteration stoves have added up to 47 million. 

Table 1-2-3 Number of alteration stoves in rural unit: 10 thousand 

Area 

Number at the 

banging of year Alteration number Abandoned number 

Total number in the 

end of year 

Total 4706.43 211.67 207.94 4710.16 

Beijing 4.48 0.79 1.46 3.81 

Tianjin 0.85 0 0 0.85 

Hebei 279.64 16.97 18.08 278.53 

Shanxi 54.52 0.5 0 55.02 

6 
Inner Mongolia 7.07 0.37 0.09 7.35 

Liaoning 90.27 0 0 90.27 

Jilin 26.81 0.52 1.35 25.98 

Heilongjiang 119.04 4.21 0.8 122.45 

Shanghai 0 0 0 0 

Jiangsu 54.05 5.56 2.66 56.95 

Zhejiang 0 0 0 0 

Anhui 75.1 0.13 0.35 74.88 

Fujian 226.5 5.98 0.79 231.69 

Jiangxi 104.75 7.97 7.85 104.87 

Shandong 303.34 15.2 19.33 299.21 

Henna 271.11 30.28 10.11 291.28 

Hubei 124.24 16.64 12.15 128.73 

Hunan 374.09 38.83 18.82 394.1 

Guangdong 284.28 8.56 9.79 283.05 

Guangxi 303.54 4.45 5.08 302.91 

Hainan 26.5 1.2 0 27.7 

Chongqin 53.85 4.4 0.38 57.87 

Sichuan 1102.61 25.3 90.73 1037.18 

Guizhou 148.84 9.77 2.39 156.22 

Yunnan 292.65 4.9 3.01 294.54 

Tibet 0 0 0 0 

Shaanxi 107.33 4.24 1.31 110.26 

Gansu 208.1 4.64 1.41 211.33 

Qinghai 62.45 0 0 62.45 

Ningxia 0 0 0 0 

Xinjiang 0.42 0.26 0 0.68 

Source: Rural Energy Statistic Yearbook 

1.2.2 Animal excrement utilization 

There is the most small biogas digester in China in the world. Based on statistic by Agriculture 

Department, there have been 2.1 million small biogas digesters building in 2003, and the reserved 

amount has reached 12.9 million, and the biogas output has been about 4580 million m

3

 (shown as 

Table 1-2-4). 

7 
Table 1-2-4 Rural residential biogas digester numbers in 2003 

Area 

Number at the 

banging of 

year (10000) 

Building 

number 

Abandoned 

number 

Total number 

in the end of 

year (10000) 

Gas output 

(10000 m3

) 

Total 11090.98 2114614 310712 1290.37 457965.16 

Beijing 5.43 2133 3867 5.26 935.52 

Tianjin 0.37 397 120 0.40 84.06 

Hebei 29.45 104789 10288 38.90 11594.27 

Shanxi 2.01 20000 0 4.01 1080 

Inner Mongolia 0.29 4714 283 0.73 149.24 

Liaoning 27.37 32268 4102 30.19 7567.15 

Jilin 1.78 4595 1584 2.08 642.05 

Heilongjiang 0.23 16705 0 1.90 511.84 

Shanghai 0.58 0 3421 0.24 7.1 

Jiangsu 40.72 17394 18455 40.61 7405.66 

Zhejiang 9.65 15471 12349 9.96 1771.94 

Anhui 14.82 69750 2989 21.50 6112.46 

Fujian 20.76 24352 3474 22.85 9045.13 

Jiangxi 81.99 107732 15152 91.25 30654.62 

Shandong 43.03 32888 9427 45.38 11746.86 

Henna 25.24 179143 3648 42.79 11138.07 

Hubei 82.60 133862 21997 93.79 27128.04 

Hunan 93.52 246022 33021 114.82 57566.37 

Guangdong 27.58 23144 2010 29.69 12440.14 

Guangxi 169.17 382460 48952 202.52 86695.71 

Hainan 6.67 36221 238 10.27 7394.33 

Chongqin 48.20 38223 1918 51.83 15013.36 

Sichuan 238.95 213084 69720 253.29 72246.05 

Guizhou 30.49 107366 26438 38.58 17215.12 

Yunnan 80.42 253833 14272 104.38 51163.77 

Tibet 0.00 0 0 0.00 0 

Shaanxi 21.17 22188 2143 23.17 7281.93 

Gansu 5.14 11684 824 6.23 1898.4 

Qinghai 0.20 5271 0 0.73 164.81 

Ningxia 1.79 7718 0 2.56 1187.62 

Xinjiang 0.36 1207 20 0.48 123.54 

Source: Rural Energy Statistic Yearbook 

8 
Except for residential biogas digester in rural, the large biogas project is also the main method of 

husbandry waste disposal and animal excrement utilization. In Table 1-2-4, the main large and 

medium biogas project are excrement disposal in husbandry, among which including crop-processing 

residue. In 2003, the amount of waste disposal is about 36.11 million tons, and the electricity output is 

about 4.68 million kWh, and producing 456 thousand tons fertilizer and 427 thousand tons feedstuff. 

Table 1-2-4 Amount of large and medium biogas project in 2003 

Index Unit Agriculture waste Industry waste Total 

Operating number (number) 2124 231 2355 

Total capacity (10000 m3

) 55.08 33.21 88.29 

Disposal amount (1000 tons) 3611 2187 5798 

Gas output (10000 m3

) 5801.65 12590.78 18392.43 

Supply gas to 

resident 

(10000 

household) 5.75 7.34 13.09 

Installed capacity (kw) 3936 2760 6696 

Electricity output (10000 kwh) 165 468.06 633.06 

Fertilizer (10000 tons) 42.44 45.69 88.13 

Feedstuff (10000 tons) 3.05 42.74 45.79 

Source: Rural Energy Statistic Yearbook 

1.2.3 Industry waste disposal 

The industry organic wastewater disposal is main industry waste disposal, which is mainly used 

producing biogas as fuel or generation power (shown as Table 2-2-4). Moreover, the bagasse from 

sugar refinery and rice husk from rice mill is also mainly disposed in industry waste, which is used 

generating power. About these two-industry wastes, the report will discuss in followed chapter. 

1.2.4 Municipal solid waste and sewage disposal as energy 

At present, the disposal of MSW is mainly landfill, except for combustion generation power in 

especial cities. The gas generation power system is less installed in landfill. So the standard of MSW 

as energy is very low. 

The disposal of living sewage mainly adopts biogas technology. In 2003, there are 131.6 

thousand biogas digesters for living sewage. The volume of digester is 5228.5 thousand m3

, which can 

dispose 46.3 thousand tons sewage. (In Table 1-2-6) 

Table 1-2-6 Biogas digesters for disposing living sewage in 2003 in China 

Item Unit Toilet Hospital Residential building Other public Total 

Biogas digesters number Number 8216 1658 113697 8007 131578 

Total volume 10000 m3 43.94 13.72 412.76 52.43 522.85 

Disposal amount 10000 tons 2522.04 790.22 38636.73 4390.32 46339.31 

9 
1.3 Biomass generation power technology summary 

1.3.1 Agriculture and forest residue generation power technology 

1.3.1.1 Straw direct fired generation power technology 

z Technique introduction 

The stalk resources come from the local farmers or the feedstock trader. In sequence with the 

collection, package, and transportation through rivers or vehicles to the factory storage, there comes to 

the following steps: 

1. Stalk transported from conveyor and shredder to the boiler 

2. Steam that produced from stalk combustion propels the steam turbines and generates electricity. 

The un-combusted stalk will stay at the bottom of the boiler. Meanwhile the ash enters the smoke 

filer chamber and emit through the chimney. 

3. The residues inside the boiler and the ash could be harnessed as the agricultural fertilizer. 

z Utilization range 

At present, the typical scale of straw generation power plant is 24 MW which using this 

technology. The above three project approved by NDRC is also same scale. The straw consumption 

will be about 200 thousand tons in these power plants every year. It is difficult to collect these straws 

in the most region of China. The cultivated area per capita is small in the mostly rural area, and 

cultivation is based on household, which can provide 4-10 tons straw each one household. Therefore, 

the consumption about 200 thousand tons will be purchased from 100 thousand household of rural 

resident. The purchase work will be very heavy burden. Moreover, with the feedstock cost increasing, 

the benefit of project will be influenced. 

In the opinion of this report, the technology can be used in some region such as Heilonjiang, 

Jilin and Xinjiang, where has very large cultivated area each people and some national farm. If the 

straw power plant is constructed in these regions, the straw purchase will be easy and the cost will be 

low. However, if the plant is constructed in populous regions, the enterpriser will need very carefully 

consider. 

1.3.1.2 Biomass circulating fluidized bed gasification generation power 

z Characteristic 

The technology comes from the project supported by Ministry of Science and Technology 

(MOST), which have intellectual property. At present, some power plants with 1MW-installed 

capacity have been constructed, and one demonstration project with 4MW-installed capacity is 

building in Jiangsu. 

10 
The collection cost of straw is relatively high because the straw production is not centralized. In 

the opinion of this report, the straw power plant, which installed capacity 5MW (the largest is below 

10MW), should be constructed in the most of region of China, except for the large farm. The key 

equipment of this technology is circulating fluidized bed gasification boiler. At present, it is difficult to 

enlarge the capacity of the boiler in the technology. But the capacity of boiler can match the above 

straw power plant. So the capacity of equipment is very feasible and economic. 

Through circulating fluidized bed gasification generation power plant constructed, there are 

some problems being solved in the technology. For example, the separated tar contains a lot of ash in 

cleaning processing, so the use of tar is very limited. Moreover, tar, as waste, need be disposed farther. 

z Utilization range 

The technology is adapted to use in the most of region in China. At the same time, the technology 

can dispose the rice husk in many rice mills of China, which can greatly reduce the cost. 

1.3.1.3 Straw fixed bed gasification generation power 

z Characteristic 

The technology of straw fixed bed gasification is relatively mature, which can use the mature 

normal equipment of coal fixed bed gasification. Especially the normal equipment about dedusts, detar, 

and desulfur for fuel gas can be directly used. 

The shortcoming of technology is as followed. At present, though there are two hundred the 

power plants, the installed capacity is only 200 KW. The demonstration project of straw fixed bed 

gasification power plant will construct in Jiangsu. 

z Utilization range 

This technology can be adapted to the most regions in China. The installed capacity should be 

controlled from 5 MW-10 MW. The straw will be solidified in the station to be easy to reserve and 

transport and to reduce storage area. Therefore, the technology has advantage in the rural impacted 

area. 

1.3.2 Animal excrement generation power 

1.3.2.1 Hangzhou Denta husbandry biogas generation power 

z Characteristic 

The project is the typical wastewater disposal project in large husbandry of China. The total 

amount on hand is 120 thousand heads. The wastewater output is 30000 tons, including excrement and 

11 
washing water and living sewage. There is high concentrations organic matter in the wastewater. 

Therefore, if the wastewater is directly discharged, the environment will be polluted. 

Table 1-3-1 wastewater quantity indexes 

Index TS(%) CODcr(mg/L) BOD5 (mg/L) SS (mg/l) NH3-N (mg/L) 

High concentration 1.4 17000 8500 12000 2520 

Low concentration - 400 200 200 50 

z Utilization range 

The project is adapted to the large or medium husbandry, especially husbandry for pig or cattle. 

Because the excrement of pig and cattle has low solid content, it is difficult to directly process the 

excrement to organic fertilizer. Therefore, the biodegradability will be feasible method to produce 

biogas. The biogas can directly generate electricity in internal combustion engine and be used as fuel 

for boiler to produce stream. 

1.3.2.2 Shunyi husbandry biogas generation power 

z Characteristic 

The project has been supported by UNDP/GEF/SETC project “Capacity Building for Rapid 

Commercialization of Renewable Energy in China—large scale industry biogas demonstration 

project”. 

The husbandry is typical medium scale, which mainly disposes the pig excrement. The total 

amount on hand is 30000 head and the living wastewater is 611 tons. 

z Utilization range 

The breed method adopts feed in a pen through retting excrement, which is the typical breed 

method in North of China. Therefore, the project is of advantage to disposing excrement in medium or 

small-scale husbandry in North of China. 

1.3.3 Industry waste utilization 

1.3.3.1 Guitang plant bagasse generation power 

z Characteristic 

The large sugar manufacture is rebuilt in this project. During retrofit period, the basic condition 

can be fully considered. At the same time, the project also pays attention to comprehensive 

resource utilization and environment protection. The project will form ecotypes industry region, 

which center is sugarcane refinery, to realize the combination between industry and agriculture, 

and environment protection and economic benefit. 

12 
z Utilization range 

Guangxi Guitang Bagasse Co-generation demonstration project is a technology reform project, 

which is supported by UNDP/GEF/SETC project “Capacity Building for Rapid Commercialization of 

Renewable Energy in China”. 

Guangxi Guitang built in 1956. Through three enlarging scale period, the capacity has been 

enlarging 10000t/d. The enterprise has make progress in comprehensive utilization resource and cycle 

economy based on technology retrofit. The project can provide a good demonstration for the same 

type enterprise and explore an approach to sustainable development of old enterprise in China. 

1.3.3.2 Rice husk generation power in rice mill 

z Characteristic 

Recently year, the rice husk generation power in rice mill rapidly developed in China. These 

projects didn’t been supported in finance and policy by government, whereas, the projects fully 

depended on the market. Jiangsu, especially the South of Jiandsu, is the center of rice production in 

East of China. There are many small rice mills in these regions, which have one rice grinding product 

line. The installed capacity of the product line is 130kw. When the rice was been input, the mill began 

to process the rice until finishing all products. Therefore, during operating period of the mill, the 

power load is so very stabile that the condition can be provided for the generating power system by 

the mill. 

The generation power system matches the power consumption system in rice mill. Therefore, the 

economic benefit of project is very good. At present, the owner of these rice mills is private enterprise 

that has high decision-making power for investment and running. With economic benefit impulsion, 

the enterprisers will actively construct these type power plants. 

There are some problems as follows. The gasification system of rice mill exists the secondary 

pollution because the mill does not strictly supervise the processing, which need reform and 

management further. 

z Utilization range 

The technology is adapted to use in rice mill. If altering the gasification boiler, the other medium 

or small factory producing biomass waste can be used. 

13 
1.3.3.3 Qingdao wine plant biogas power generation 

z Characteristic 

The digestion technology adopts international advanced EGSB reactor,namely grain sludge swell 

bed. At the same time, full mixed anaerobic digestion technology is adopted,match with whisking 

establishment, which makes the liquid in the pool and microbe to full mix, and adopts sulfide 

treatment measure and anaerobic digestion. 

The project cannot only produce biogas as the high quality energy, but also dispose digested 

liquid as fertilizer. Therefore, the biomass resource will be made full use. 

z Utilization range 

The producing capacity of Qingdao wine plant is 18000 tons wine of corn and wine of potato. 

After the project is built, the annual production capacity will be 2.88 million m3

 biogas and 9600 tons 

feedstuff, which can provide demonstration and direction for the same scale wine plant in China. 

Because the relative facility is perfect in large biogas producing, the biogas can continue to produce; 

even the technology can be used in the cold region of North China. 

1.3.4 Municipal solid waste 

1.3.4.2 Hangzhou Tianziling land fill generation power 

z Characteristic 

The technology fully considers the leachate removing and disposing in the design. The problem of 

leachate disposal widely exists in south region of Yangtse Rive. The highest depth of Tianzilin landfill 

is 50m, which is a typical terrain for landfill. In the design for the project, the factor and experience of 

upright well depth and space will provides reference for the same project. 

z Utilization range 

In theory, all garbage can adopt the sanitation landfill method. But there are large populations and 

small area per capita in China, so the landfill is not fit for our country. The pyrogenation method for 

MSW disposal should be developed for the future. 

The landfill gas generation power can use the built and building landfill, at the same time, the 

design at beginning need consider the gas generating power in the landfill building. 

14 
1.3.4.2 Shuangliu MSW gasification generation power 

z Characteristic 

The content of Dioxin from this system is very low. Toxicity equivalent quantity is very lower than 

national emission standard. Furthermore, compared with the same type international technology, it is 

the lower lost and wider market and industry potential. Furthermore, the investment is lower than the 

MSW combustion generation power. 

z Utilization range 

The production capacity of one boiler is 200 tons/day MSW. Based on the statistic data from state 

environment protection bureau, the output of MSW is 0.44kg per capita in the city. Therefore, the 

technology is adapted to dispose garbage in the city where there are 500-1000 populations. 

15 
2 Foreign biomass energy technology development and application 

2.1 Biomass energy utilization in the some countries 

2.1.1 United States 

In United States, biomass generation power is a proven commercial electricity generation option. With about 

9,733 MW in 2002 of installed capacity, biomass is the single largest source of non-hydro renewable electricity 

(EIA Renewable Energy Annual 2002). This 9,733 MW of capacity includes about 5,886 MW of forest product 

and agricultural residues, 3,308 MW of generating capacity from municipal solid waste, and 539 MW of other 

capacity such as landfill gas (EIA Renewable Energy Annual 2002) The majority of electricity production from 

biomass is used as base load power in the existing electrical distribution system. 

More than 500 facilities around the country are currently using wood or wood waste to generate electricity. 

The majority of the capacity is produced in Combined Heat and Power (CHP) facilities in the industrial sector, 

primarily in pulp and paper mills and paperboard manufacturers. To generate electricity, the stand-alone power 

production facilities largely use non-captive residues, including wood waste purchased from forest products 

industries and urban wood waste streams, used wood pallets, some waste wood from construction and 

demolition, and some agricultural residues from pruning, harvesting, and processing. In most instances, the 

generation of biomass power by these facilities also reduces local and regional waste streams. 

In the early 1990s, nearly all of the biogas electricity was produced in the United States. In 2001,the 

United States is still the largest producer with 4.9 TWh. At present, the biogas technology is mainly based on 

flexible liner systems and Co-digestion systems in US. 

2.1.2 Europe 

In Europe, biomass currently contributes about 60% of the renewable energy sources share (98% of 

renewable heat and 8% of renewable electricity) and is believed to be the renewable energy resource with the 

largest growth potential. Electricity generation from biomass is significant in Sweden, Finland and Denmark in 

CHP schemes. Biomass is used for power generation to a lesser extent in other countries and usually as 

co-generation or as a recent response to environmentally driven policy initiatives. As gasification and other 

advanced processes are still in the development and demonstration phase, most current deployment is 

conventional steam cycle technology. There is a minor amount of co-firing with coal in Sweden. Most of the 

biomass CHP schemes in Europe are operating in pulp and paper industries, followed by forest industry and 

CHP for large district heating systems. The largest producers of electricity from biomass are Finland, Sweden 

and Austria. The share of biomass electricity generation in its total electricity generation reached 11% in 

Finland, and in the Sweden and Austria, electricity generation based on biomass accounted for more than 2% 

of total electricity generation in 2001. 

16 
At present, most of the growth production of electricity from biogas has taken place in European countries. 

The United Kingdom is the largest producer in Europe, with 2.9 TWh in 2001. Germany produced nearly 2 

TWh in 2001. Most of the European Plants are small or medium sized farm scale plants using 1-20m

3

 per day. 

Nine large farm-scale plants in Germany use more than 20m3

 per day. There are also several plants of this size 

in concentrated livestock areas of northern Italy, the Netherlands, and Denmark. Germany and Denmark were 

the most dynamic countries in terms of installing farm digesters during this time and this continues to the 

present day. 

2.1.3 Other countries 

In 2000, the total installed ASEAN capacity of renewable energy for electricity generation was 20,942.46 

MW (Table 2-1-1), among which 8.94% is from biomass power. In ASEAN, the potential of biomass for power 

generation is promising: about 50,000 MW for all biomass resources in Indonesia (NRSE-SSN Report, 2001); 

approximately 3,000 MW in Thailand (EC-ASEAN Cogen, 2002); about 1,117 MW in palm oil industry of 

Malaysia (PTM, 2003); about 60-90 MW from bagasse and 352 MW from rice hulls in the Philippines 

(NRSE-SSN Report, 2001); and 250 MW from bagasse in Vietnam (UN-ESCAP, 2000). About 920 MW in 

installed capacity could be expected from over 19 million tons of residues in ASEAN wood industry 

(UN-ESCAP, 2000). Many of this potential could be developed through cogeneration. 

Table2-1-1 Biomass energy for power generation in ASEAN (2000) in MW 

Country Biomass Total 

Indonesia 302 4940.40 

Malaysia 213 2446.34 

Philippines 21 4691.5 

Singapore 220 220 

Thailand 1230 4218.47 

ASEAN-10 1986 20942.46 

2.2 Biomass generation power technology summary 

2.2.1 Direct-fired power generation 

z United States 

The direct-fired boiler/steam turbine technology is mature and main generation power technology in US. 

The biomass power boilers are typically in the 20-50 MW range (the largest approaches 75 MW). The small 

capacity plants tend to be lower in efficiency. Although techniques exist to push biomass steam generation 

efficiency over 40%, actual plant efficiencies are in the low 20% range. 

17 
Table 2-2-1 lists the 8 power plants in USA after 1990. The types of biomass fuels used are abbreviated: 

“mill” refers to mill wastes, etc. Many boiler types are represented: two traveling grate stoker boilers, six 

water-cooler vibrating grate boilers, three fixed-grate boilers. From this table, the mill waste, urban waste and 

forest are the main biomass fuel. 

Table2-2-1 Biomass direct-fired generation power plant in USA 

Plant Location Fuels Boiler Scale Electricity Heat rate Fuel 

(MWe) generation (Btu/kWh) consumptions 

(GWh/yr) (Tons/yr) 

Tracy California Ag, 

urban 

1 water-cooler 

vib grate 

18.5 130 14000 214000 

Grayling Michigan Mill, 

forest 

1 traveling 

grate stoker 

40 200 13600 320000 

Willams 

Lake 

British 

Columbia 

Mill 1 water-cooler 

vib grate 

60 558 11700 768000 

Multitrade Virginia Mill 3 fixed grate 

stokers 

80 133 14000 219000 

Ridge Florida Urban, 1 traveling 40 200 16000 376000 

tries, grate stoker 

LFG 

Camas 

(cogen) 

Washington Mill 1 water-cooler 

vib grate 

17 65 17000 194000 

Snohomish 

 (cogen) 

Washington Mill, 

urban 

1 sloping 

grate 

39 205 17000 410000 

Okeelanta 

(cogen) 

Florida Bagasse, 

urban 

3 water-cooler 

vib grate 

74 454 13000 694000 

z Europe 

In Europe, a number of combustion technologies for CHP and Condensing power production from 

biomass are commercially available. The market for large scale CHP from biomass combustion is established 

in Sweden, Finland and Denmark. 

For fixed bed boilers, there were some small, medium and large commercial power plants in Europe. 

However, the fluidized bed boiler is mainly in large scale CHP. Smaller boilers with acceptable capital costs 

have been developed but need further demonstration. 

Denmark is a larger country as biomass CHP. At the beginning of this millennium Denmark had installed 

biomass fueled combined heat and power plants with a total power capacity of 200 MWe. Biomass CHP 

18 
generation is accounts for 1.5 percent of the total capacity for electricity production in Denmark. The detail 

operating data on eight biomass direct-fired plants are listed in Table2-2-2. 

Table2-2-2 Operating data on ten biomass-fired plants and systems 

Data Unit Junckers 

K-71 

Junckers 

K-81 

Novopan1

 Enstedv. 

EV32 

Masnedø 

Unit 122 

Vejen2

 Hjordkær3 Assens

3 

Power output MW 9.4 16.5 4.2 39.7 9.5 3.1 0.6 4.7 

Heat output MJ/s Process Process Process 20.8 9.0 2.7 10.3 

steam steam steam + 

dist.heat

Steam 

pressure 

bar 93 93 71 200 92 50 30 77 

Steam 

temperature 

°C 525 525 450 542 522 425 396 525 

Fuels Chips bark 

Sawdust 

Sander 

dust 

Chips 

Bark 

Sawdust 

Sander 

Chips 

Bark 

Sawdust 

Sander dust 

Straw 

chips 

Straw 

chips 

Waste 

Straw 

chips 

Chips 

Bio-waste 

Various 

bio-fuels 

chips 

dust 

Electrical 

eff.(gross) 

% 28 21 16 27 

Overall 

officiency 

91 83 86 87 

Notes: 

1) Industrial systems. 

2) Owned by power corporations. 

3) District heating plants. 

2.2.2 Gasification power generations 

At present, the biomass gasification technology is very near to commercial availability with mid-size plants 

operating in Finland, the UK, the Netherlands, and Vermont. A cogeneration application of biomass 

gasification power could exceed 80%. 

Pilot and demonstration units incorporating biomass gasification to fuel gas turbines are now under 

development the US, Brazil and the EU; indeed, the first such unit, at Värnamo in Sweden, was commissioned 

in 1993 and has been in test operation for three years. Centers of activity include the Renugas process unit in 

Hawaii, the UGas process unit of Carbona (formerly Tampella) in Finland, Imatran Voima Oy in Finland and 

TPS Termiska Processer AB in Sweden, working with the ARBRE project in UK and the Bahia project in 

Northeast Brazil. Both the US DOE and the European Commission are actively involved in biomass power 

demonstration programmes. 

19 
2.2.3 Co-fired power generation power 

Biomass cofiring has been successfully demonstrated and practiced in a full range of coal boiler types and 

sizes, including pulverized coal boilers, cyclones, stokers, and fluidized beds. At least 182 separate boilers and 

organizations in the United States have cofiring biomass with fossil fuels. Of the 182 cofiring operations 

mentioned above, 114 (or 63%) have been at industrial facilities, 32 at utility-owned power plants, 18 at 

municipal boilers, 10 at educational institutions, and 8 at federal facilities. 

In Europe, most existing coal fired plant uses pulverized fuel (PF) technology. Biomass fuels must be 

ground to a small size to be used in these installations. 

fluidized beds, and low-percentage (Less than 2% biomass on a heat basis) cofiring in cyclone and PC 

boilers. For heating applications, this is equivalent to about $3 to $6/lb per hour of steaming capacity. 

2.2.4 Anaerobic Digestion generation power 

Technologies for anaerobic digestion of sewage sludge, industrial sludge and wastewater are fully 

commercialized, and they need no further R&D support and are not covered in this information. Anaerobic 

digestion of animal manure and organic wastes are still under development and are treated in detail here. The 

EU energy potential of sludge is given as 20,000 GWh/year, which is equivalent to 2500 MW/y. In comparison 

to the figures for agricultural and MSW feedstock this is about 20% of the total potential. However, the 

treatment of sewage sludge by AD is likely to see a greater immediate increase in EU countries compared to 

other feedstock due to the banning of sea dumping of this waste. 

The technology of anaerobic digestion is now well developed and a range of digesters from 70m3

 capacity to 

5,000m3

 is commercially available. The size and type depends on the manufacturer and the quantity and type 

of the material to be digested. Smaller digesters tend to use the biogas for heat production whereas larger units 

can generate up to about 2 MW of electricity. 

20 
3 Biomass energy technology application perspective 

3.1 Straw utilization analysis 

3.1.1 Characteristic of straw utilization in large scale 

There are small-cultivated area per capita and low work efficiency of rural labor in China. In the most 

region of China, the household is regarded as a work unit, which is very small scale. These characteristics in 

rural region will influence the cost of agricultural and forest residue utilization, especially the collection cost. 

Therefore, the factor should be fully considered when the technology road map is done research on agricultural 

and forest residue utilization. 

z Purchase contract 

For ensuring stable supply of feedstock, the straw power plant should sign contract for straw purchase. 

The straw will be provided from farmer at last no matter what the purchase adopts any bargain mode. For 

example, the 25MW straw direct-fired generation power project, which is approved by National Development 

and Reform Commission (NDRC), need consume 140 thousand tons straw, which need be provided from 

70-80 thousand household farmers. Therefore, the purchase contract signed will reach 70-80 thousand 

contracts. 

z Bargain number 

If the straw produced from each farmer in whole year is purchased in each contract, the bargain number 

will also reach 150 thousand contracts because the straw will be produced in two seasons. The purchasing 

agency or purchasing agent can finish these bargains, but the setup of large agency or agent need the high cost, 

which will increase the collection cost of straw. 

z Bargain agency 

The agency setup, arrangement, and number will influence the collection cost of feedstock. At present, 

the approved project will adopt the multilevel purchase system, which is shown as Figure 5-1. As main control 

center, the straw power plant will ask each straw storage and transportation station to deliver the straw. The 

number of station will be built according to the scale of power plant. 

The power plant with 25 MW installed capacity will consume 200 thousand tons straw every year, which 

need be provided form 10 straw storage and transportation station. Each station will manage 20 purchase 

stations that should have the capability of straw storage. The purchase stations will collect straw from 

purchasing agent. The station will manage 20 agents for straw collection. The agent, who will directly 

purchase from 50 household farmers, is mainly the rural resident in the local. The total amount of collection is 

about 100 tons straw from each agent. 

21 
Straw power plant 

Straw storage and transportation station 

Straw purchase station 

Farmer

3.1.2 Technology scale and feasibility 

Based on above analysis, the large utilization of agriculture and forest residue in China, especially straw, 

should pay attention to the straw collection, and then, the collection cost will be an important condition to 

determine the scale of straw power plant. The source of straw is too dispersing to ensure the safety of 

collection. Therefore, when selecting the scale of straw power plant, the risk of straw collection should be 

considered as an important factor. 

So far, there is not a technology, which can be adapted to utilize in the whole regions of China. In the 

opinion of report, it is very infeasible to extend a single technology in the whole regions of China. Each 

technology can be adapted to use in the different regions, in the same way, every regions can adopt the 

different technologies. Based on the existing condition in each region, the scale of power plant will be selected. 

The straw direct-fired generation power will fit in the regions cultivating in the large farm, such as 

Heilongjiang, Jilin, Xingjiang and so on. There are relatively centralized cultivated and large producing unit in 

these regions. At the same time, the regions only cultivate crop in one season, therefore there are enough time 

and field to collect the straw. As a conclusion, the installed capacity of straw power plant can reach 25-50MW 

(even the larger scale) in this type region. 

As far as crop production, there are the larger in Heinan, Shandong, Jiangsu, Sichuan and Hunan and so 

on. But there is such a high density of population in these regions that each farmer only provide very small 

amount of straw. The gasification generation power will be adapted to use in these regions. The installed 

22 
capacity can be 5-10MW in the straw power plant of these regions. Furthermore, when building straw 

collection system, the straw resource in the regions, which can be covered by the collection system, should 

exceed the consumption of the power plant to avoid the risk of collection price and supply in time. 

3.2 Animal excrement utilization analysis 

3.2.1 Technology utilization scale 

The statistical data from China Agriculture Department indicates that there are 8241 medium and 

large-scale husbandries in China (the detailed describe of scale is shown in Table 3-2-1), which discharge 2 

billion tons excrement and wastewater. Based on survey and calculation, the availability amount of excrement 

from husbandry, which can be used as potential feedstock for generating electricity, is about 55 million tce. 

(The detailed analysis is shown as China Biomass Resource Report). 

Table3-2-1 The scale classifying of husbandry 

Type 

Amount of 

pig on hand 

(head) 

Amount of 

hen on hand 

(10000) 

Amount of 

chicken on 

hand 

(10000) 

Amount of 

milky cow on 

hand 

(head) 

Amount of 

cattle on 

hand 

(head) 

Medium scale 3000-10000 5-20 10-40 200-600 500-1200 

Large scale >10000 >20 >40 >600 >1200 

3.2.1 Technology feasibility 

The generation power technology in animal husbandry is limited in the biogas generating electricity. There 

are many technologies for producing biogas, but the system mode is mainly excrement-biogas-electricity. At 

present, the pyrolyzed gasification and direct liquefaction is developed, but these technologies are during 

research. Therefore, the technology mainstream for animal husbandry electricity generation is still biogas 

generation power. 

3.3 MSW utilization assessment 

Based on the statistics from China Environment Protection Bureau, the garbage production of municipal 

resident is 440 kg per capita every year. With economy developing, the city scale is the larger and larger and 

number is the more and the more, in the result, the garbage production increases. At present, the deposit 

amount of garbage has reached 6 billion tons, which occupies 500 million square meters cultivated field. The 

number of city has reached 668, among which 200 cities has involved in the garbage. 

Up to the present day, China has not process the mature garbage disposal technology by own intellectual 

right. The landfill is main garbage disposal technology. But the biogas output system was not built in the 

landfill plant as result that there is not the biogas generating electricity system. Therefore, the blast accident 

due to biogas happened in the landfill. 

23 
The combustion generation power is main technology of disposal MSW in the developed country (in 

Table 3-3-1). In china, the combustion technology is only used by few cities such as Shenzhen and Shanghai 

and so on, but the main technology and equipment was all imported from the foreign. The MSW combustion 

generation technology has been done researched by the domestic research institute and enterprise, but the 

mature demonstration project was not built. 

Table3-3-1 MSW disposal methods in some counties 

No. 

Country 

Sanitation 

landfill 

Garbage 

compost 

Combustion 

generation 

Combustion 

plant 

Combustion 

amount 

(%) (%) (%) (site) (10000tons/a)

1 Singapore 100 3 255 

2 Switzerland 20 80 34 170 

3 Japan 23 4.2 72.8 1899 3086 

4 Denmark 18 12 70 46 145 

5 Sweden 35 10 55 23 140 

6 Netherlands 45 4 51 11 170 

7 France 40 22 38 284 200 

8 German 65 3 32 65 430 

9 Belgium 62 9 29 29 132 

10 Australia 62 11 24 3 35 

11 

United 

kingdom 88 1 11 38 180 

12 USA 75 5 20 157 1369 

Source: Shenzhen energy in tenth of 2000 

3.3.1 Characteristic 

As a developing country with numerous populations, China has special situation of country. The mature 

of developed country is not fully adapted to China. 

z MSW classifying 

The MSW classifying has been implemented in a few cities, which installed some classified dustbin 

in the important public. Based on survey, hardly classified dustbin can be useful. Furthermore, the living 

garbage is only classified in the bag, without absolute classifying. 

z MSW component 

The component of organic compound (combustible) is low in the garbage because of the low living 

standard of the municipal resident in China. The heating value of MSW is 900-1500kcal/kg. The reason 

inducing low heating value of MSW is that the garbage is not fully classified, excluding the living 

standard. 

24 
z Disposal fee for garbage 

At present, the city resident paid the lower charge for garbage disposal, which only afford the garbage 

clean, and transportation. In the garbage disposal plant, the disposal cost of the garbage is mainly from 

financial payout of the local government. So the capital of building and operation in the garbage disposal 

plant is relatively lack. 

3.3.2 Technology method 

According to the situation of China, the combustion generating power technology should be enlarged. At 

the same time, when the landfill technology is adopted, the biogas output system should be prepared. These 

two methods will be mainstream of MSW disposal. 

The compost technology of MSW was also demonstrated in some region, but the operation result is not 

satisfying. Beijing city imported a product line of high temperature compost from German, which can 

normally operate but the product has hardly market. Therefore, during selecting the technology flow, the 

technology feasibility should be fully considered. 

Table 3-3-2 lists the compare of three disposal technologies. According to each characteristic, the 

technology selecting is as follows: 

z In large and medium cities and some small cities with developed economy, the combustion 

technology can be selected. 

z In small cities and large and medium cities with non-developed economy, the landfill technology 

can be selected. 

z In impacted area, the combustion technology should be selected at the first. However, the landfill 

technology can be selected in the area with abundant land and low population. 

Table 3-3-2 The compare of three MSW disposal methods 

Content Sanitation landfill Combustion Compost 

Operation 

security 

Fair 

z Notice fireproofing 

Good Good 

Occupy land Large Small Medium 

25 
Select 

location 

Difficult 

z Considerer terrain, geologic 

condition 

z Prevent surface and ground 

water pollination 

z Build apart from city to 

increase the transportation 

distance 

Easy 

z Close to city 

z The short distance 

of transportation 

Easy 

z Avoid impacted area 

z The radius of smell 

infection need be below 

200m 

z The transportation distance 

is feasible. 

Applying 

condition 

z Mineral >60% 

z Containing water<30% 

z Density>0.5t/d 

z In low heat value 

>3300kJ/kg, the 

assistant fuel nee not 

be used 

z Considering innocuity, organic 

compound≥10% 

z Considering fertilizer effect, 

organic compound >40% 。

Last disposal No 

The residue need be 

filled, which accounts 

for 10% of the 

begging content 

The residue need be filled, which 

accounts for 20~25% of the 

begging content 

Product 

market 

Reclaim biogas to generate 

electricity 

Produce heat or 

electricity 

It is difficult to build the stable 

compost market 

Building 

investment 

Relatively cheap Relatively expensive Medium 

Pollution of 

surface 

water 

Possible 

Take measure to reduce possibility 

No pollution in the plant 

When the ash is filled, the 

pollutions lower than the 

landfill 

At same as landfill 

Pollution of 

ground water 

Possible The ash solidified can 

prevent pollution 

Possible 

Heavy metal in compost product 

can pollute water 

Air pollution 

Have 

The cover and press can 

control the pollution 

Have 

The Dioxin need be 

controlled 

Have light odor 

Soil 

pollution Limit to the landfill area Without 

Need control heavy metal content 

in the compost product 

26 
4 Biomass energy available potential analysis 

4.1 Agriculture and forest residue potential 

The biomass generation power technology will have the large development potential in China. It is well 

known that this technology can save energy, protect environment, other tan it is an important factor that the 

biomass generation power will be promoted to become the most important industry in the renewable energy 

utilization. 

Table 5-1 comes from China Statistics Yearbook in 2004 by National Bureau of Statistics. The table 

shows that the total income per capita is 3582.4 RMB Yuan in rural, and net income per capita is 2622.2 Yuan 

in rural. Furthermore, the cash income per capita is only 2100.8, which accounts for 58.6% in total income. 

Based on calculating, the cash net income in the rural is only 1110.8 Yuan, which excluding cash payout for 

producing. In addition, there are 768.51 million populations in the rural of China, which accounts for 59.47% 

of total population in China. Such enormous population, the cash income per capita is below US$0.5. 

Table 4-1-1 The income and expense per capita of the rural resident 

Annual income per capita Sum (Yuan) Annual expense per capita Sum (Yuan) 

Total income 2836.72 Total expense 2514.20 

 Salary income 540.93 Family business expense 733.48 

 Family business income 2148.46 Purchase fixed asset for produce 113.10 

Property income 41.85 Tax expense 49.14 

Transfer income 105.49 Living expense 1524.22 

Transfer and property expense 94.27 

Cash income 2100.78 Cash expense 1918.62 

 Salary income 540.42 Family business expense 548.21 

 Family business income 1430.80 Purchase fixed asset for produce 113.10 

Property income 34.33 Tax expense 47.35 

Transfer income 95.23 Living expense 1117.09 

Transfer and property expense 92.87 

Annual net income per capita (Yuan) 1936.01 

 Salary income 540.93 

 Family business income 1276.60 

Property income 41.85 

Transfer income 76.64 

Annual net cash income per capita (Yuan) 1110.79 

27 
Therefore, it is important for China government to increase the income in the rural, especially cash 

income. In 5th March 2005, State Department Premier Wen Jiabao declared that the agriculture tax would be 

exempted in the whole country next year. This measure will decrease 3.77 billion RMB Yuan payouts for the 

tax in the rural. (Based on the data in 2003) 

The survey data indicates that the availability amount of crop straw, which is used as generating power, is 

about 247 million tons in China. (Shown in Biomass Resource Report in China). Based on the field survey, the 

collection cost of crop straw using as generation power is about 250-300 Yuan per tons, among which 100 

Yuan is the cost of purchase straw. If 50% availability amount can be used, the cash income in the rural will 

increase 1.235 million Yuan every year. 

As is stated above, the purchase agent is the farmer in the local area, who can collect 100 tons straw 

every year. Based on above calculation, the straw collection will provide 1.235 million employees for the rural. 

If the price of collection straw is 20 Yuan, each agent will acquire 200 Yuan net income, which is as 1.8 times 

as the net income per capita in the rural in 2003. 

It is different form wind power and solar power that the biomass power, especially the crop straw 

generation power, can provide employees for the rural labor force and increase income of the farmer. Therefore, 

the biomass generation power will be regarded as the preferential industry developed by China government to 

solve the rural problem. 

4.2 Animal excrement potential 

Because the content of water is high and the solid is low in animal excrement, there is obstacle in using 

pyrogenation technology. However, the technology of biochemistry for producing biogas is very mature. 

At present, the average scale of the husbandry is relative small. With the urbanization of country 

developing rapidly, the average scale of the husbandry will enlarge through resetting the husbandry, which will 

provide the good condition for the utilization for animal excrement. 

There are above 1.3 billion populations in China, which is a large and stable market for protein 

consumption. Therefore, the animal husbandry development is an inevitable current. At present, the husbandry 

is lack of strict disposal for the excrement so as to pollute the environment around. Therefore, the control of 

waste discharge in husbandry should be enhanced. The generation power technology in husbandry is mature. 

At the same time, Renewable Energy Law provides the guarantee of economic benefit for this technology 

utilization. The technology of disposal excrement will be paid attention and widely used. 

4.3 MSW potential 

At present, the environment pollution from MSW has been more and more serious. National 

Environment Protection Bureau has explicitly put forward the request of disposal MSW, which is decreasing 

28 
production of garbage, reducing damage of garbage, and increasing utilization as energy of garbage. With 

reform deepening, the government has begun to change the function of government in China. The public 

project is more and more important in the government work. Therefore, the disposal technology for garbage 

will be enlarged in large scale. According to disposing 400 million tons MSW every year, the MSW generating 

power will become a new industry. 

It is well know that there are largest populations of China in the word. The city with population above 4000 

thousand people is about 11, 2000-4000 thousand people is about 22 cities, and 1000-2000 thousand people is 

about 141 cities (the data is from nation statistic bureau in 2003). In these cities, it will be a better choice to 

adopt the direct-fired technology to proposal MSW. Based on the statistic data form National environment 

protection department, the output of MSW is about 0.5tons per person every year. If there are 1000 thousand 

population in the city, the output of MSW will reach 500 thousand tons, which can supply MSW direct-fired 

generation power with 15MW installed capacity. Therefore, the direct-fired generation will have widely market 

in the disposal MSW of China. 

29 
5 Biomass energy policy suggestions 

5.1 Biomass energy policy in China 

5.1.1 Regulation about on-grid price of biomass generation 

Related central government agencies, for example former Ministry of Electricity, former State Economy & 

Trade Commission, former State Development and Plan Commission, and Ministry of Science & Technology, 

have made regulations about the wind electricity interconnected with grid, but not clear regulation about 

biomass power generation. Many biomass power generation projects try to solve their grid connected problem 

following the regulation about the wind generation. The major contents about the grid connected regulation are 

to permit the generation connect into the grid with a suitable electricity price. 

The general regulation about wind power is that the electric grid administration department should permit 

wind electricity into the nearby grid and purchase the whole power amount. The grid-connected wind 

electricity price will be determined according to reasonable profit, which is the cost of generating plus the cost 

of repaying the capital with interest. The additional price compare to the conventional electricity price will be 

shared equally in whole grid after the utility purchase wind generation. These rules have played very important 

roles to solve the problem of connection with wind generation and the grid. But because the problem of fixed 

electricity price has not been solved locally (it is separately handled by local government according to different 

situations), it is not sure how much the price difference between wind power and conventional power will be 

shared equally, and in addition there is no standard power purchasing agreement to rely on. 

In 2003, the Notice of Electricity Price Reform (Guo Ban Fa [2003]62), printed and distributed by the State 

Council Office on July 3, 2003, clarify the regulation about renewable energy electricity price. The Notice 

ruled that: New energy resources and renewable energy, such as wind power and geothermal energy, do not 

currently take part in the competitive market. The grid enterprises have priority to purchase new and renewable 

electricity according to the price determined by the government or bidding. In the future, when the power 

market becomes matured, the government will determine the proportion of new and renewable energy in the 

power sector, and an industrial market of new and renewable energy resources with competition will then be 

set up. So the rules have been authoritatively fixed that renewable energy generation projects should not have 

to join in the competition of the electricity grid, which thereby removes a large obstacle in the development of 

renewable energy generation including biomass generation during the reform of power sector. 

But, it does not exist a very clear standard price setting mechanisms or systems of RE. Price is set on a 

case-by-case basis with protracted negotiation between power producer and the grid or utility, thereby 

increasing the transaction costs, and discouraging RE industry. It is difficult to get reasonable price for 

biomass products, although some RE enterprises such as those based on wind power can do so. 

30 
5.1.2 Economy policy 

5.1.2.1 Subsides 

Subsidies, which are provided by the central and local governments, are one of the most popular economic 

incentives for biomass development in the PRC. The following are the major subsidy measures taken: 

z Overhead: This mainly refers to operating expenses and other expenses of biomass managerial 

institutions in several commissions of the central government. There is about tens thousand staff at 

different levels for the management, R & D as well as training, equipment certification, inspection, etc for 

RE development, especially for the rural energy application. As the government reform, some institutions 

and organizations transfer to commercial management and operation, the subsidies from the government 

for the overhead became small and small. 

z R&D: The central government subsidies R&D on key biomass technologies through NDRC and MOST. 

z Capital investment subsidies for the interest: The subsidies normally provided by central government as a 

low-interest rate loan. For example, former Department of Resource Conservation and Utilization of 

SETC provided 120 billion RMB Yuan low interest loan each year on support the renewable energy 

development, and the Ministry of Water and Conservancy provides low-interest loans of about 300 

million RMB Yuan for small hydropower development. 

z Subsidies for projects: Central government has provided many kinds of subsides for renewable energy 

development through projects, especially for the biomass energy. In 1970s and 1980s, a large number of 

subsides are used in household biogas system, save-wood stove dissemination, small hydro power plants, 

and others. Besides the special funds, a part of central poverty fund, rural electric fund, and plantation and 

afforestation fund are used in biomass development. 

z The rural biogas national debt project in 2003 and 2004: the subsidies standard is 1200 Yuan in northwest 

region and northeast region, 1000 Yuan in southwest region, and 800 Yuan for other regions, which will 

be given to rural household establishing the biogas system. 

z Rural energy projects under rural small scale public establishment construct fund in 2001 and 2002: the 

subsides standard is 400 Yuan for each household biogas system, 100 thousand Yuan for each small scale 

biogas engineering project, and 200 thousands Yuan for each straw and stalk gasification and supply 

biogas engineering project. 

31 
z National ethanol gasoline for vehicle dissemination projects since 2002: Because the materials for 

ethanol is the dated corn, the national subsidies for dated food are also given to the ethanol plants as about 

400 Yuan for each ton food. And, if the ethanol plant’s profit is negative, the central government will also 

give the plants some subsidies. The subsides will be determined based on the principal of avoiding the 

negative profit and keeping a little profit. 

5.1.2.2 Custom duties 

According to the Notice about Adjustment of the Equipment Import Taxation (Guo Fa [1997] 37) issued 

by State Council on 1997, the custom duty and related VAT of the imported equipment for self use, which are 

listed in the Direction Catalog of Foreign Investment Industry, are exempted. The establish and management of 

new energy power plant, including solar energy, wind energy, magnetism, geothermal energy, tide energy and 

biomass energy, are listed in this Direction Catalog. However, Customs duty exemption depends on whether 

the equipment is considered high-tech and the need be clarify in each case. 

The normal VAT for custom duty is 17%. According to the Notice about VAT and Consumption Tax of 

Imported Equipment (Guo Shui Fa [1993] 155) issued by SAT and Customs General Administration (CGA), 

the VAT for custom duty of imported biogas equipment is reduced to 13%. 

5.1.2.3 VAT refund 

The normal rate of VAT is 17% in China. 

According to the regulation (Cai Sui [2001]198) issued by Ministry of Finance (MOF) and State 

Administration of Taxation(SAT) in December 2001, the VAT for municipal waste generated electricity will be 

refund totally since on January, 1, 2001. And, MOF and SAT issued a replenish notice in 2004 to clarify again 

that this VAT refund policy only be suitable for the municipal waste electricity in which more than 80% of fuel 

is municipal waste. This is a real good incentive policy for municipal waste generation. 

Unfortunately, in these two documents, the VAT reduction and refund policy are only suitable for municipal 

waste generation and wind power generation. The VAT of wind power generation is reduced to 8.5% from 17%. 

Other biomass energy and renewable energy generation are very difficult to following this incentive policy. 

In order to encourage ethanol productions and launch the national demonstration projects on ethanol 

gasoline for vehicle, the regulation (Guo Jing Mao Ji Shu [2002]147) issued by 8 national agencies, including 

State Economic and Trade Commission(SETC), State Development and Planning Commission, MOF and 

others in 2002. According to this regulation, a series incentive policy are determined, include that the VAT for 

ethanol production will be refund totally since Feb. 10, 2002. 

32 
5.1.2.4 Income tax 

The normal rate of enterprises income tax is 33%. It is free for enterprises acknowledged by the State as in 

the new and high-tech industrial zones for the first two years and the 15% is applied in the following two years. 

Enterprises with wastes as main raw material are free from income tax within five years after operation. 

Staring from Jan. 1, 2000, for foreign funded enterprises in the middle and western areas of the country, the 15 

% tax rate will be applied within three years after the current tax concession policy expires. If foreign-funded 

enterprises in eastern areas of China re-invest in the central and western areas of the country, they shall be 

regarded as foreign–funded enterprises if the investment proportion exceeds 25% and enjoy the corresponding 

treatment. 

5.1.2.5 Consumption tax 

In order to encourage ethanol productions, according to the regulation (Guo Jing Mao Ji Shu [2002]147) 

issued by 8 national agencies, the consumption tax for ethanol gasoline are exempted. The normal 

consumption tax is 5%. 

5.1.3 Related environment policy published 

5.1.3.1 Forbid burning directly and encouraging comprehensive utilization of the straw and stalk 

Management Method on Forbidden Directly Burning the Straw and Stalk and Encourage Comprehensive 

Utilization is published on April 16, 1999 by General Administration of Environment Protection, Ministry of 

Agriculture, Ministry of Finance, Ministry of Railway and Road, Ministry of Communication, and General 

Administration of Civil Aviation of Chin, to forbid burning directly and encourage the comprehensive 

utilization of agriculture straw and stalk. According this Management Method, the regions, including the round 

regions in 15 km radius of the airport, the regions in 2 km width each side along the high speed road and the 

railway, and the regions in 1 km width each side along the provincial key roads, are forbidden to burn the 

agriculture straw and stalk directly. And, this notice also encourage the comprehensive utilization of 

agriculture utilization, for example, feed back the straw and stalk back to the field as fertilizer, develop straw 

and stalk fodder and materials for industrial use, and promoting straw and stalk gasification. The notice request 

that, the straw and stalk comprehensive utilization rate in capital cities of each province, and other important 

cities should reach 60% and 85% in 2002 and 2005 respectively. 

5.1.3.2 Regulation on water pollution excrete and treatment 

Water Pollution Prevention and Cure Law is updated on May 15, 1996, and Implementation Item for Water 

Pollution Protection Law is updated by State Council on March 20, 2000 to ensure the smooth implementation 

of the Law. According to the Law and the Implementation Items, the water environment quality standard and 

polluter emission standard are determined, water pollution protection supervisor management and pollution 

protection for the earth water and the water under the earth are regulated. And, the related waste water 

33 
emission control standards for different industries have also been published, and the standard system for waste 

water emission and treatment has been established. The related environment agencies have right to punish 

the enterprises with unqualified waste water emission. 

5.1.3.3 Regulation on municipal waste treatment 

Based on the Solid Waste Pollution Prevention and Cure Law, in 2002, Notice about Establish Charge 

Regulation on Municipal Waste Disposal and Promoting Waste Disposal Industrialization Development was 

published to ensure the implementation of the regulation in the Law. According to this document, the charge 

regulation on municipal waste disposal has been established to pay for the expenses on waste collection, 

transportation and disposal. The related municipal government agency should enhance the management and 

supervisor on waste disposal, if it can’t meet the request, the government agency can ask the waste disposal 

station to submit their rebuild plan and promote their work. Each level of environment agency has the right to 

punish those waste stations that can’t meet the regulation. This document has paid very important roles on 

promoting the waste disposal industrialization development. 

5.2 Foreign biomass policy 

On the whole, the main incentive policy of renewable energy includes feed-in tariffs, renewable portfolio 

standard, biding system, and assistant fiscal and financing policy. These assistant policies include RD&D 

investment, investment subsidies, exemption tax and financing policy. A country usually selects the feed-in 

tariffs or RPS as the main incentive policy for renewable energy and adds the other incentive policies to 

establish the whole renewable energy incentive policy system. 

5.2.1 Feed-in tariffs 

The term feed-in tariff is used both for a regulatory, minimum guaranteed price per unit of produced 

electricity to be paid to the producer, as well as for a premium in addition to market electricity prices. 

Regulatory measures are usually applied to impose an obligation on electricity utilities to pay the (independent) 

power producer a price as specified by the government. The tariff may be supplemented with subsidies from 

the state. The level of the tariff is commonly set for a number of years to give investors security on income for 

a substantial part of the project lifetime. 

The feed-in tariff includes two methods. The one is confirming the lowest fixed price for the electricity from 

renewable energy, which is used in German, Italy, and Portugal. The other is adding to incentive price based on 

electricity price from fossil energy, which is used in Sweden and Denmark. Spain adopts these two methods. 

Many counties confirm the electricity price on grid based on technology type, resource type, resource 

quantity, and project scale. Especially, the electricity price for biomass power generation is different to some 

degree because it has many technology type and different scale. Table 5-2-1 shows feed-in tariff for biomass 

electricity in different countries. 

34 
Normally, the real price for the biomass electricity is higher than the feed-in tariff published by government 

regulation because feed-in tariff is always implemented with other incentive policy, for example the tax 

incentive policy and investment subsidy, in many countries. 

35 
Table 5-2-1 Feed-in tariffs for biomass electricity in different countries. 

Countries Electricity price Note 

Austria • Wood chips:€0.102/kWh to €0.16/kWh 

• Waste with high bio-share: €0.027/kWh to €0.128/kWh 

• Co-firing in fossil fuel plants: €0.03/kWh to €0.065/kWh 

• Biofuels: € 0.1/kWh for plants>200 kW, € 0.13/kWh for 

plants <200 kW 

• Biogas: €0.0725/kWh to €0.165/kWh 

• Landfill gas: €0.03/kWh for plants>1 MW, €0.06/kWh for 

plants < 1MW 

The Act guarantees payment of feed-i

Belgium €0.2/kWh (fix price) + €0.25 /kWh (green certificates) In Flanders, if the supplier does 

obligation, they are fined €75 per mi(1 MWh) in 2003, €100 in 2004 and In Wallonia, the supplier will be fined 

Denmark €0.081/kWh during 2001-2002 Feed-in tariff was launched in 1996

start of the green certificate market, nin 2001. The support is generally lowpolicies, the tariff set for electricity first period is nearly 30% lower than but the tariff for biomass maintains 0.081/kWh since 1996. 

Finland Tax refund Since 1997, biomass electricity gener

a refund of € 0.042 per kWh on distribution level. The refund was kWh, and include logging chips, recy

France • Bioenergy (<12MW): 7 ct/kWh 

• Biogas: from 4.5 ct/kWh (unit power above 6 MW level) to 5.72 

ct/kWh (under 2 MW level) 

• Municipal solid wastes (<12 MW): from 1.74ct/kWh (summer) to 

3.72ct/kWh (winter) in France (continental and Corsica), from 3.05 ct/kWh to 3.72ct/kWh in the overseas areas 

Feed-in tariff adopted since 2001, guarantees rate 

36 
Germany z Sewage gas, landfill gas and marsh gas: 

9 <0.5 MW, €0.0767/kWh 

9 >0.5MW, €0.0665/kWh 

z Biomass: 

9 <0.5MW, €0.101/kWh 

9 0.5-5MW, €0.089/kWh 

9 >5MW, €0.084/kWh 

Adopted in 1991, and updated in 2remuneration paid for newly commireduced annually to provide stronreductions. The factor is 1% for biom

Greece In 2001, the average buy-back tariff was € 0.0616/kWh in 

interconnected system, and €0.0731/kWh (in 2001,IEA data) 

Enacted in 1999. In the interconnected network, the P(PPC) pays the generator a price wenergy and a capacity charge. The ethe energy part of the medium-voltagand the capacity charge is 50% of thtariff. In the non-interconnected islands, PPnot capacity. The price paid by PPC iend-use tariff. 

Ireland The price under AER VI (2003-2005): 

9 Biomass (8MW): 6.412ct/kWh 

9 Biomass –Anaerobic Digestion (2MW): 7 ct/kWh 

9 Biomass-CHP: 7ct/kWh 

The Alternative Energy Requiremsystem, was launched in 1994. Thconducted by 2003, and front weightprovided for, allowing a price increasyears of the contract followed by an 35% for remaining 7.5 years. 

Italy 

Price for green certification is 6.7ct/kWh, plus the electricity price 5 ct/kWh, the total price for biomass electricity is 11.7ct/kWh (Wind 12 in China) 

Feed-in tariff was launched in 1991, tGreen certification/quota system (GCat least 2% of electricity should be psources. The RES producers that already bfeed-in tariff provide could not obtain 

Korea Landfill gas plant: 

9 <50 MW: KRW 61.8/kWh 

9 <20 MW: KRW 65.20/kWh 

In 2002, the government set up a stanenergy power generation in order to and renewable energy sources 

37 
Netherlands 9.7ct/kWh (6.8ct/kWh fix price + 2.9 ct/kWh tax exemption) Since 2001, a Green certificate Syste

validation and monitoring of the prodelectricity under the REB. The REB system was adapted Environment Quality of Electricity P2003. The envisaged policy scheexemption level of taxation on technology specific feed-in tariff (Mwill remain to be used. The MEP is a kWh subsidy that is pafor electricity from renewable sourcethe national grid. It is guaranteed for (not for CHP). The level of producer for technologies. In 2003, small stand-alone biomass price (6.8ct/kWh), and small standand 100% biomass project have 2.With this tax level, green electriexpensive as regular electricity. 

Spain • Fixed price: 

9 6.85ct/kWh for energy crops electricity 

9 6.05ct/kWh for other biomass electricity 

• Market electricity price + incentive price 

9 Incentive price 

− energy from biomass: €0.0279/kWh in 2002, and €

0.0332/kWh in 2003 

− energy from livestock manure: €0.0271/kWh in 2002, 

and €0.0294/kWh in 2003 

Projects can select between (1) a fixea bonus incentive in addition to thTariffs are set as a percent of the aver

Portugal €0.06198/kWh in 2003 Since, the feed-in tariffs have been spSweden Market electricity price + €0.009/kWh incentive price Feed-in tariff launched since 1997 Switzerland CHF0.15/kWh The tariff is adjusted to be higher d

and lower in summer but the annuaApplied period: 1991-2008 

38 
Feed-in tariff in most countries give a guarantee period, most biomass electricity projects have 

10-20 years guarantee period. In some cases, the tariff does change on a predictable schedule during 

the contract period. Table 5-2-2 shows some international examples of guarantee period for biomass 

project. 

Table 5-2-2 International examples of guarantee period for biomass project 

Country Contract duration 

Germany 20 years in virtually all cases 

Austria 13 years for all RE 

France 15 years for biomass and biogas from waste 

Greece 10 years plus renewal option 

Netherlands 10 years 

Portugal 12 years 

Spain: Contract for life of facilities; tariff is variable 

Denmark 10 - 20 years for fixed premium or tariff 

In order to encourage the technology improvement and reducing the cost of renewable energy 

electricity, some countries ask for period evaluate the tariff, and some countries gave an automatic 

tariff reduction. 

z In Germany, the automatic tariff reduction depends on the technology, solar (5%-6.5%), wind 

(2%), biomass (1.5%), larger hydro and geothermal (1%), small hydro (0%). 

z In France, reduction rate in wind tariffs is 3.3% per year, but not reduction rate is asked for the 

biomass electricity. 

z In Spain, the modification of renewable energy premiums has been introduced in the legislation 

that set the yearly electric tariffs in 2001. The premium for energy from biomass has been 

increased from €0.0279/kWh in 2002 to €0.0332/kWh in 2003, and also for the livestock 

manure management from €0.0271/kWh to €0.0294/kWh; conversely, the premium for wind 

energy has been reduced from €0.0290/kWh to €0.0266/kWh. 

The incentive function of feed-in tariff on renewable energy power generation is very obvious and 

efficient. However, it has no incentive function on the other utilization of renewable energy. 

Furthermore, the heating utilization of biomass is also an important utilization method and field. 

Therefore, it is no enough for biomass energy development to adopt feed-in tariff. The other incentive 

39 
policy should be synthetically adopted to promote each technology developing. 5.2.2 

Renewable portfolio standard (RPS) 

RPS is a new incentive policy of renewable energy with electricity market reform. RPS prescribe 

that electricity producer or supplier should have some share of electricity in the producing or 

supplying from renewable energy, which will be realized through Green Electricity Certification and. 

Green Certification means the certification for sale the green electricity. When the power producer of 

renewable energy sells the electricity for the electricity market, they can acquire a Green Certification. 

The certification can be freely traded based on the Green certification trade system. If the electricity 

producer or supplier has not the electricity from renewable energy, they can purchase the Green 

Certification from the other renewable energy enterprise. At the same time, the renewable energy 

enterprise can acquire the additional income through selling the Green Certification to accelerate the 

renewable energy development. 

The RPS can give the renewable energy investor economic subsidy through Green certification 

trade, and ensure the renewable energy development in the quota through penalty payment for 

non-compliance. The main characteristic of RPS is that the renewable energy can be developed based 

on the least cost in the market mechanism. But the RPS exists some limits, which is as follows. The 

market mechanism will bring on the uncertain electricity price of renewable energy, increase the 

investment risk of renewable energy, and induce the unjust competition among the renewable energy 

enterprise with the different scale and different technology. 

In addition, the biomass heating utilization can be involved in the range of incentive policy by RPS 

in the theory. But the policy range need be decided by the policy maker. The first, the object type need 

be confirmed. There are two objects to be selected. The one is the share of renewable energy power 

generation in the total electricity consumption. The other is the share of renewable energy 

consumption in the total electricity consumption. Secondly, the measure of object need be confirmed 

whether biomass-heating utilization can be involved. At present, the electricity from renewable has 

been confirmed as the energy object of RPS in Australia. But the calculation method can be 

promulgated; such as the supply production of solar heating is converted into the electricity output. 

However, the RPS of other countries only pays attention to the renewable energy power generation. 

Presently, some countries have begun to implement RPS, such as Australia, UK, Sweden, Italy, and 

some states of USA and so on. 

− In Italy, Feed-in tariff was launched in 1991 and the fixed price was set, In 1999, Green 

certification/quota system (GC) was launched to meet the national renewable energy objective, 

which is at least 2% of electricity should be produced from renewable sources. Now, the price for 

green certification is 6.7ct/kWh, plus the market electricity price 5 ct/kWh, the total price for 

biomass electricity is 11.7ct/kWh. And, according to the national regulation, the RE source 

producers that already benefit from the energy feed-in tariff provide could not obtain green 

certificates. 

40 
− In Sweden, the electricity certificate trading system was established in May 2003. The objective 

is to achieve a 16.9% share of RES-E in electricity consumption in 2010 from 7.4% share in 2003. 

The price for Green certificate is estimated to be around 0.55ct/kWh. The certificate price will be 

set on the market. However, there is a minimum price and a penalty level. 

• The minimum price is the buy-out price at which the government promises to buy 

certificates from producers. This starts at 60 SEK/MWh (about 0.66 ct/kWh). The 

guaranteed price are: for 2004 €6.6152 per certificate, for 2005 €5.5127 per certificate, 

for 2006 €4.4101 per certificate, for 2007 €3.3076 per certificate and for 2008 €2.2051 

per certificate. 

• A penalty for non-compliance is set at 175 SEK/MWh (1.93 ct/kWh) in 2003 and 240 

SEK/MWh (2.63 ct/kWh) in 2004. 

− In UK, the objective of UK is that the share of renewable energy electricity of total electricity 

consumption increases to 10% in 2010 from 2.8% in 2000. The Renewable Obligation was 

implemented on April 1, 2002 to replace the Non Fossil Fuel Obligation (NFFO) in order to meet 

this objective. The Renewable Obligation requires electricity companies to supply an increasing 

proportion of their production form renewable sources. In return, they will receive Renewable 

Energy obligation Certificates (ROCs), which can be traded domestically. A penalty is set for 

non-compliance: 30 GBP/MWh (about 4.5 ct/kWh). This penalty will be set annually in line with 

the retail prices. 

− Australia: the Renewable Energy Act 2000 sets the framework for the Mandatory Renewable 

Energy Target (MRET). The government’s renewable energy target seeks to raise the contribution 

of renewable energy sources in Australia’s electricity mix by 9500 GWh per year by 2010 and 

maintain this requirement until 2020. Under this measure, tradable Renewable Energy 

Certificates (RECs) are used to demonstrate compliance with the objective. In order to meet their 

obligation, liable parties (wholesale purchasers) surrender Renewable Energy Certificate to the 

Renewable Energy Regulator. A Renewable Energy Certificates represents 1 MWh of electricity. 

The penalty payment for non-compliance is AUS$ 40 per MWh (non-tax deductible). The Office 

of the Renewable Energy Regulator administers the MRET. 

41 
Table 5-2-3 Information about RPS in selected countries 

Country Market 

electricity price 

Green certificates price Fine Implementation 

time 

Italy €0.117/kWh €0.067/kWh 1999 

Sweden 2003: 60 SEK/MWh 

(about 0.66 ct/kWh) 

2004: €6.6152/MWh 

2005: €5.5127/MWh 

2006: €4.4101/MWh 

2007: €3.3076/MWh 

2008: €2.2051/MWh 

2003: 175 

SEK/MWh (1.93 

ct/kWh) 

2004: 240 

SEK/MWh (2.63 

ct/kWh) 

2003 

UK 15-18 

GBP/MWh in 

2003-2004 

45-48 GBP/MWh in 

2003-2004 

30 GBP/MWh (about 

4.5 ct/kWh) 

April 1, 2002 

Australia AUS$ 40 per MWh 

(non-tax deductible) 

April 1, 2001 

5.2.3 Bidding system 

Bidding procedures can be used to select beneficiaries for investment support or production support 

(such as through heed-in tariffs), or for other limited rights such as sites for wind energy. Potential 

investors or producers have to compete through a competitive bidding system. The criteria for the 

evaluation of the bids are set before each bidding round. The government decides on the desired level 

of electricity from each of the renewable sources, their growth rate over time, and the level of 

long-term price security offered to producers over time. The bidding is accompanied by an obligation 

on the part of electricity providers to purchase a certain amount of electricity from renewable sources 

at a premium price. The difference between the premium and market price is reimbursed to the 

electricity provider, and is financed through a nondiscriminatory levy on all domestic electricity 

consumption. In each bidding round the most cost-effective offers will be selected to receive the 

subsidy. The mechanism therefore leads to the lowest cost options. 

In order to maintain a differentiation in renewable energy sources, the bidding may be differentiated 

in bands of different technologies and energy sources. This means that biomass projects compete 

against other biomass projects but not against, for example, wind projects. The marginal accepted bid 

sets the price for the whole technology band. 

42 
Ireland is one of few countries using bidding system. The Alternative Energy Requirement (AER), a 

bidding system, was launched to promote renewable energy development combining with a corporate 

tax relief since 1994. The AER mechanism is the only dedicated subsidy system for production of 

renewable energies and it combines grant aid from the European Regional Development Fund 

(ERDP-subsidies) with price support above avoided fuel costs. The objective of an AER competition 

is to compete for rights to generated electricity and sell it to the ESB at agreed rates over a fifteen-year 

period. Prospective generators are invited to compete based on a price per unit of electricity. The six 

AERs have been conducted by 2003. Biomass/waste projects and Combined Heat and Power (CHP) 

projects are included in these six bidding projects. All these projects have 15 years operational period. 

According t to the results of AER VI (2003-2005), the electricity price for biomass (8MW) is 

6.412ct/kWh, for biomass –Anaerobic Digestion (2MW) is 7 ct/kWh, for Biomass-CHP is 7ct/kWh. 

5.2.4 Investment subsides 

Investment subsides can help to overcome the barrier of a high initial investment. This type of 

subsidy is commonly used to stimulate investments in less economical renewable energy technologies. 

Investment subsidies are usually 20-50% of eligible investment costs, but in some case subsidy is 

given over the total eligible investment sum. The advantage of investment subsidies is effective to 

stimulate the activities of investors and enlarge the production scale, the disadvantage is that it can’t 

promote technology improvement and reduce the cost since the subsidy has nothing to do with the 

operation of the enterprises. 

Loans with a low interest rate are available for renewable energy including biomass, which is also 

very effective to reduce the total investment and the burden of the investment and interests for the 

enterprises. The disadvantage is that the government has to collect some money as discount or interest 

reduction subsidy. 

For example, Sweden paid out € 36 million from government budget to support biomass 

combustion and transfer technology since 1975, which is used in the RD&D and demonstration 

project in commercialization prophase. During 1997 to 2002, the share of investment subsidy for 

biomass CHP project was 25%, and the total subsidy was €48.67 million in five years. In addition, 

during 2004 to 2006, the government of Sweden provided the subsidy with €1350 per household for 

biomass supply heat system for resident living( use biomass solidified fuel). 

Demark provides €4 million investment subsidy for biomass energy enterprise every year since 

1981. At present, the electricity price of biomass on grid is only 8ct/kWh in Denmark. 

During 1991 to 2001, federal government gave €295 million investment subsidy for biomass 

energy in German. Since 1990, KfW bank offered the loan with low interest for the private enterprise 

of biomass energy. The interest rate is 50% of the market interest. The farmer can acquire subsidy with 

DEM1000/ha for plant biodiesel feedstock (rapeseed). The enterprise producing biodiesel also can 

acquire the exemption form tax. 

During 1991 to 1995, Italy provides 30% to 40% investment subsidy for biomass utilization project. 

43 
Japan supported the private enterprise to invest the renewable technology and utilization since 

2003. The investment subsidy for biomass utilization project has accounted for 30% of investment 

cost and provided guarantee for 90% of total loan. 

Europe provides subsidy with €45/ha. For the farmer planting energy crop to promote biofuel 

produce. 

In Greece, Law 2364/95, published in 1995, provided tax exemptions to households buying 

renewable equipment, 75% of the purchase value of renewable equipment can be deducted from 

taxable income. It has been estimated that this benefit can yield a real reduction in installation cost of 

up to 30%. Aid to Market penetration of Renewables - New Development Law 1998 provide a 

maximum 35% grant for investments in power generation and maximum 75% deduction form taxable 

income for the residential and service sectors. 

In Portugal, the subsidies are provided to public and private organizations for investments projects 

in four categories: renewables for electricity generation, energy management measure and 

co-generations, green fuels for transport fleets, fuel switching to natural gas. Subsidies vary according 

to renewable-type and projects economic feasibility, but in general correspond to approximately 40% 

of the investment. 

Spain plans to increase ethanol production and to expand biodiesel plant capacity. Both national 

and regional governments provide subsidies for plant construction and for promoting ethanol use. 

Spain is the largest producer of fuel ethanol in the EU. Total biofuel production in 2001 was 80 000 

tones and it s estimated to have increased to 187 000 tones in 2002. 

5.2.5 Tax incentive policy 

Tax incentive policy is a very important measure for promoting renewable energy development in 

the United States, EU and other developed countries. Incentive tax policy includes two types. One 

type is to give a favorable tax rate for renewable energy industry including reduce tax rate or exempt 

part taxes of custom tax, capital investment tax, VAT and income tax (both for enterprise and 

residents). Another type is to undertake force tax on non-renewable energy such as consumption tax 

and environment tax, which will increase the cost of non-renewable energy and increase the 

competition of renewable energy. It is proved by practices in many countries that the carbon tax, 

especially with high standard and high rate, is a perfect way to accelerate the clear energy 

development and application and encourage the enterprises to apply advanced technology and improve 

technical level. 

The countries in EU levy the higher tax for energy consumption. The tax type includes energy tax, 

carbon tax and sulfur tax, especially the tax on oil consumption with higher levy, which accounts for 

tow third of gasoline and diesel price. Each country in EU exempts renewable energy utilization from 

all kinds energy tax. 

44 
Expect for proposing definite quota, the main policy measure to support biomass liquid fuel is 

exemption form fuel tax in EU. At present, the oil price is about €1/litre in EU, among which two 

third is fuel tax. However, using biomass ethanol will be exempt from fuel tax. Though the cost of 

ethanol fuel was twice as high as the gasoline cost, the biomass ethanol rapidly developed through this 

tax policy. 

In Sweden, there is high-energy tax. The tax includes fuel tax, energy tax, carbon tax, and sulfur tax. 

If all energy tax are exempted from, the electricity price can be provided €2/kWh preferential price. 

Therefore, the tax incentive policy is main policy in Sweden for promoting the biomass development 

and utilization. Namely, the biomass energy project is exempt form all kinds of energy tax. 

In Germany, the federal government promotes the use of liquid biofuels for use in motor vehicles 

through tax exemption amounting to Euro 0.77/litre for rapeseed methyl ester. In November 2003, the 

government proposed changes to the tax law in accordance with a new EU Directive. The Change 

would entail a 100% tax exemption for biofuels for petrol taxes for a period of six years. The 

exemption would be granted to blends of up to 5% bio-ethanol, and exclusively for undenatured 

alcohol. According to the Eco-tax reform, the biofuels were exempt from the oil tax until the end of 

2008. 

In UK, the Climate Change Levy is designed to promote energy efficiency and stimulate 

investment in new energy technologies and applied since 2001. The levy is a tax on energy use in 

industry, commerce, agriculture and the public sector. It applies to gas, electricity, LPG and coal. The 

levy is based on the primary energy content of the various fuels, not the carbon content. Levy rates are 

₤0.43/kWh for electricity; ₤0.15/kWh for gas, ₤1.17/kg for coal; and ₤0.96/kg for LPG. In 2002, VAT 

rates on the biofuel have been reduced from 17.5% to 5% to correspond to the rate for domestic 

fuels.。

In Portugal, the reduced VAT rate for renewable energy technology is 5% (compared to the 

normal VAT rate of 17%). Due to European fiscal harmonization this measure was revised in 2001 to 

the present rate of 12%. 

Sweden: Sweden levies three different taxes on energy products: an energy tax, a CO2 tax and 

sulphur tax. The small-scaled renewable energy based electricity production is partially or totally 

exempt from the energy tax levied on households and the service sector, this gives a tax benefit of 

10-20 ct/kWh. Furthermore, producers and consumers of biomass-based electricity are exempt from 

various environmental taxes, such as the CO2 tax, sulphur tax and NOx levy. 

Spain: The Law 24/2001 on Fiscal, Administrative and Social Measures offered corporate tax 

deductions for investment in renewable energy. Eligible investments entitle firms to a 10% tax 

deduction on installations or equipment using biomass form agricultural or forestry waste, solid 

municipal waste and biofuels. All ethanol and biodiesel producers are exempt from the hydrocanban 

tax. The percentage of ETBE in gasoline is exempt from the tax. 

45 
Dutch government set up regulating energy tax in 1997. In 2003, the energy tax on fossil 

electricity for small consumers (<10 000 kWh) was further raised to 6.39ct/kWh, with a partial 

exemption of 2.9ct/kWh for renewables. With this tax level, green electricity is on average as 

expensive as regular electricity. 

5.2.6 RD&D budgets 

The developed countries pay a lot of attentions on renewable energy RD&D. IEA countries’ 

renewable energy RD&D budgets totaled about US$ 23.55 billion, some 8% of total energy RD&D 

funding from 1974 to 2002, renewable energy RD&D was US$ 65 million. Expenditures for 

renewables RD&D grew rapidly in the late 1970s and peaked in 1980 at just under US$ 2 billion. 

Expenditures declined by about two-thirds in the early 1980s but have been relatively stable since the 

late 1980s, in the range of US$550 million to US$ 700 million. Annual expenditures on renewables 

RD&D for all IEA countries averaged about US$ 650 million from 1990 to 2002, 7.7% of total 

government energy RD&D budgets. 

The United States, Japan and Germany accounted for about 66% of total renewables RD&D 

funding period 1990 to 2002. Italy, the Netherlands and Switzerland accounted for an additional 15%. 

These six countries combined invested US$ 531 million per year on average for renewable energy 

RD&D. The United States had the highest average renewables RD&D budget of US$ 236.9 million 

per year. The average annual budget in Japan was US$ 110.9 million and in Germany US$82.8 million 

during 1990 to 2002. 

Renewable Energy RD&D funding priorities usually reflect resource endowments. In Austria, 

Canada, Finland, Hungary and Sweden, biomass accounts for more than 40% of the renewable energy 

RD&D. 

United States and the Netherlands have highest biomass RD&D input in the world. The average 

biomass RD&D budget during 1990 to 2002 reached US$ 60.3 million and US$ 7.7 million, and 

accounted for 25.5% and 23.4% of total national renewables RD&D budget in United States and the 

Netherlands respectively. 

There have been many recent efforts to enhance the biofuel (including biomass ethanol and 

biodiesel) RD&D in IEA countries. Most IEA countries set up special biofuel RD&D projects to 

promote the research and utilizations of biofuel. In the United States, Biomass Research and 

Development Act was launched in 2000 with US$ 49 million budget for biofuel and biomass RD&D 

during 2000 to 2005; and also in 2000, Funding for the Development of Ethanol announced to award a 

one year US$7 million grant for developing enzymes to convert wood chips, corn stalks and other 

biomass waste to ethanol. 

5.2.7 National protection measures 

For protecting the farmer’s benefit in USA and EU, these countries adopt the limitative measure for 

the import of biofuel because the developing countries in tropic area have obvious advantage of 

46 
competition in producing biofuel. For example, USA levies the tariff with 50 cent/ gallons on the 

import of ethanol from Brazil. The trade protectionism of developed country is of no avail for the 

development of biofuel. 

5.3 The suggest for Renewable Energy Law detail rule 

Renewable Energy Law has been promulgated by Standing Committee of the National People’s 

Congress in February 28, 2005 and enacted in January 1, 2006. The law proposed the legal frame for 

supporting the development of renewable energy industry. For implementing the law in effect, the 

main department of national government, such as energy, price, finance, construction and 

standardization, establishes the matched regulation in administration and technology standard, which 

will implement in company with Renewable Energy Law in January 1, 2006. 

At present, the following policies, management regulations and technical standards are being 

developed by central governments in order to ensure the smooth implementation of Renewable Energy 

Law: 

• National Long & Medium Planning of Renewable Energy Development in China (2020), by 

Energy Bureau, NDRC 

• National Guide Catalogue of Renewable Energy Industry Development, by Energy Bureau, 

NDRC 

• Management Regulation of Electricity Price and Additional Price Sharing System for 

Renewable Energy, by Department of Price, NDRC 

• Management Regulation of Renewable Energy Electricity on Gird 

• Management Regulation of Renewable Energy Fund 

• Loan and Subsidy Incentive Regulation for Renewable Energy 

• Technical Code of Solar Water Heating System in Civil Buildings 

Consulting biomass utilization experience from the other countries, and combining our status of 

economical and social development, the comments and suggestions for establishing these policies and 

management regulations are proposed to promote the biomass utilization and development in China, 

which is shown as follows. 

5.3.1 Enhance the recognition of biomass utilization and development, and establish definite 

long& medium targets for biomass development 

With the increasingly serious environmental problem from using fossil energy and gradually 

exhausted resource, the biomass energy is more and more important. Compared with traditional 

biomass utilization, the advance biomass technology has essential difference. The advance biomass 

technology is transferring the biomass to electricity, oil and gas. The utilization effect is the same as 

fossil energy. Therefore, on a long view and strategic development, it is very important to develop and 

47 
utilize the biomass. The targets and detail demand need be confirmed for biomass development and 

utilization. For example, EU claims the share of biomass liquid fuel, including biodiesel and ethanol, 

in fuel for vehicle should reach 2% in 2005, 5.57% in 2010, and 8% in 2015. 

We suggest: 

• The biomass development target, including the target for biomass generation, biomass 

heating, and biomass fuel respectively, should be identified in National Long & Medium 

Development Planning of Renewable Energy in China. Especially, the target of biomass 

heating, which is easy to be ignored, should not be missed in the national target. 

• The target of biomass development in National Long & Medium Development Planning of 

Renewable Energy Development in China (2020) is suggested to set as: 

− In 2020, the installed biomass generation capacity will account for 5% of the total 

installed generation capacity, which is about 50 GW; the production of biomass 

solidified fuel will be about 200 million tons (about 100 million tce); the biomass liquid 

fuel will account for 10% of the transportation fuel. 

5.3.2 Enhance biomass energy technology RD&R, pilot, and demonstration 

The biomass utilization has many types and different degree. For realizing biomass energy 

utilization, the government of each country devotes a lot of technology RD&R budgets to overcoming 

the problem and obstacle in the biomass utilization based on the resource status and technology and 

economy situation. At the same time, the government of each country provides the investment subsidy 

(usually account for 20%-30% of total investment), tax incentive policy for pilot, demonstration 

project of biomass technology, and support united utilities, private enterprise and residential household 

utilizing the biomass energy. 

Through effort for many years, in view of the technology capacity in the world, these technologies 

are mature, which including biomass solidified technology, biomass direct-fired generation power, 

ethanol and diesel using energy crop. 

At present, small biogas digester for resident, large & medium scale biogas project, landfill gas 

utilization, bagasse CHP, and biomass liquid fuel has some experience and foundation in China. 

Furthermore, crop straw generation power, biomass solidified technology and fuel technology is 

beginning just now. 

Because R&D, pilot and demonstration are foundation and ensure for the dissemination and wide 

utilization, the input on R&D, pilot projects and demonstration projects are very important Chinese 

biomass, which is just launched. For biomass technology R&D, pilot and demonstration, the report 

suggest: 

• In National Guide Catalogue of Renewable Energy Industry Development, the following 

technology should be listed in the priority technology: 

48 
− Small biogas digester for resident 

− Large & medium scale biogas project 

− Landfill gas utilization 

− Bagasse CHP 

− Crop straw generation power 

− Biomass solidified fuel 

− Biomass ethanol and biodiesel technology 

• In Management Regulation of Renewable Energy Fund, the following issues should be 

identified: 

− Clarify the support and input for biomass development, especially for the support and 

input for biomass technology R&D and demonstration projects. 

− Constitute to provide the financial support for biomass project in the rural area 

− Enhance the demonstration work to lay the good foundation of biomass technology 

utilization and spread in the large scale. 

− Expend the existing subsidy for domestic biogas digester and large scale biogas project 

in the rural area to more other biomass utilization 

5.3.3 Constitute and embody feed-in tariff to accelerate biomass generation power development 

Based on the implementing experience of incentive policy in the foreign country for ten years, the 

feed-in tariff, compared with the other incentive policy, is very adapted to the development of 

renewable energy in initial stages. The policy can effectively stabilize the market, reduce the risk of 

investor, and enhance the confidence of investor. At present, the feed-in tariff of renewable energy has 

been mature and recognized. 

The biomass generation power has many types of technology, including agriculture and forest 

residues direct-fired and gasification generation power, MSW combustion and landfill gas generation 

power, and biogas generation power. Because the biomass generation power has different resource 

availability, technology type and development standard, the tariff of biomass power is different in the 

power project with different type and scale. The classified tariff will effectively promote all kinds of 

biomass generation power project in proportion. 

The Renewable Energy Law has confirmed that the regulation of feed-in tariff, fixed price and full 

purchase should be implementing for renewable energy power. At the same time, the law defined that 

the electricity price of renewable power project should be confirmed according to different type of 

renewable power and different region status to promote renewable energy development and ensure the 

project benefit, and be adjusted with the development of renewable energy technology. Through effort 

49 
and communication, the department of government has been in accord with each other on the fixed 

price of biomass generation power. It need be paid attention to how to calculate the electricity price. 

Because there is little experience of biomass generation power in China, the all cost and risk need be 

fully considered when calculating the electricity price. The fixed price confirmed at the start should 

promote the development of biomass energy. The electricity price should been check termly to 

promote technology progress and reduce the cost. 

In theory, the fixed price of biomass generation power should be confirmed according to the 

different technology, installed capacity. However, in view of little experience of biomass generation 

power project in China, it is relatively difficult to confirm the fixed price according technology type. 

Therefore, the electricity price with preferential benefit can be confirmed at the beginning to 

accelerate the development and utilization of biomass energy. Through the practice for one or two 

years, after having some experience and data, the price can be evaluated and checked to establish the 

detail the price catalogue of biomass generation power. 

At present, Management Regulation of Renewable Energy Electricity Price and Additional Price 

Sharing System is being developed by Department of Price, NDRC. The regulation will very affect on 

the renewable energy generation power. The report suggests that the following content should be 

described in the management regulation. 

• The feed-in tariff and price sharing system of renewable energy generation power should be 

determined based on the principle of promoting development, advancing efficiency, 

enhancing management, and fair burden. 

• The investment return rate of renewable energy generation power should be higher than the 

average return rate of normal power plant. 

• The electricity price of biomass generation power can adopt the market price plus incentive 

price. 

− The market price is the normal price on grid of coal power plant in each province. 

− The incentive price should be established according to the incentive principle. Because 

of limited experience on biomass generation, each cost and risk should be fully 

considered. The report suggests that the incentive price can be 0.25Yuan/kWh 

temporarily. 

• The guarantee period for biomass incentive price should be 15 years since the operation. 

The incentive price will be cancelled after 15 years of operation. 

• The incentive price catalogue of biomass generation power should be evaluated and 

published every two years. The initial annual decrease rate of biomass electricity price is set 

as 2%. 

50 
• For the co-fired biomass generation project, the share of biomass feedstock in total fuel 

should meet a proportion to gain the incentive price. The report suggests that the biomass 

generation project, which proportion of biomass in total fuel should be more than 80%, is 

the eligible project to gain the incentive price. 

• According to relative regulation in China, the renewable energy project, which confirms the 

investor through bidding, will implement the direction price of government. The bidding 

price formed by market competition should be less than the published biomass electricity 

price in the local region. 

• For public generation power system off gird of renewable energy, the sale price for user will 

adopt the average sale price in the local electricity grid. If the maintenance cost of the 

system is higher than the average sale price in the local grid, the margin of cost can be 

acquired by the electricity additional price of renewable energy form user. 

5.3.4 Provide investment subsidy to accelerate the development of biomass gas fuel and supply 

heating 

There is widely utilization of biomass supply heating in some countries of Europe. For example, the 

heat from biomass solidified fuel accounts for 50% of total supply heat in the region. Most of 

countries support the biomass gas fuel and supply heat through providing investment subsidy, 

exempting from tax. 

Renewable Energy Law of China regulates the gas fuel and heat form biomass energy should be 

compulsively purchase according to feasible price with economical benefit. However, the price of gas 

fuel and heat is all audited and approved by the local government, at the same time, the market price 

and acceptability of user is very different in each city. Therefore, it is very difficult that the national 

government enacts the price catalogue for biomass gas fuel and heat and implement the compulsive 

purchase. 

Therefore, compared with biomass generation power, the government need pay more attention to 

the development and utilization of biomass gas fuel and heat. The technology isn’t only regarded, 

supported and supervised by the national government, but also managed and implemented in detail by 

the local government. 

The suggestion is as follows: 

• The central government should establish the special renewable energy fund to provide 

investment subsidy for renewable energy project, especially non-power renewable energy 

project, including biomass solidified fuel and biogas utilization. 

• The local government should enact the implementing regulation of compulsive purchase and 

price catalogue for biomass gas fuel and heating. 

51 
5.3.5 Enlarge the range of pilot and demonstration to promote biomass liquid fuel development 

As replacing oil, biomass liquid fuel has been regarded and supported by the government of each 

country in recent years. The government of each country adopts the all kinds of method to solve the 

technology problem, decrease the investment risk, reduce the production cost and develop market. The 

methods include providing RD&R fund and investment subsidy, exempting from tax, and 

compulsively using etc. 

The government of China began to build the pilot project of using ethanol of vehicle in Henan and 

Heilongjiang in 2002. In 2004, the range of pilot was enlarged into nine provinces, including 

Heilongjiang, Jilin, Liaoning, Henan, Anhui, nine cities of Hubei, seven cities of Shandong, six cities 

of Hebei and five cities of Jiangsu. In the pilot region, a series of incentive policies and measures were 

implemented, including compulsively using, investment subsidy, exempting from tax, confirming the 

bargain price and retail price of ethanol, which promotes the vehicle ethanol production, utilization, 

development. But these policies and measures are limited in the pilot enterprise and region. 

As a result, the report suggest: 

• Increase the investment for technology R&D, especially the biomass ethanol from non-grain 

production, to exploit a suitable technology roadmap for China 

• Increase the investment for the technology R&D of vehicle using biomass liquid fuel to 

enlarge utilization range of biomass ethanol and biodiesel. 

• Expand the pilot and demonstration range and applicable range of incentive policy and 

measure to attract the more investor and expand the market. 

5.3.6 Research RPS and implement RPS in small range and suitable time 

As a very effective incentive policy of renewable energy, RPS can develop the renewable energy 

with the least cost under the market mechanism. Because of without the relative RPS articles in 

Renewable Energy Law, it is impossible to implement RPS in the whole country recently. But because 

the RPS has strong restriction for the enterprise, China Government hope to enact the RPS for the 

large power companies at suitable time to supervise the large power companies investing renewable 

energy project. 

Therefore, the suggestion is as follows: 

• Continue to research the feasibility and implementing scheme of RPS, and carry out the 

pilot and demonstration project in small range to make ready for implementing RPS in the 

whole country. 

52 
5.3.7 Reduce and exempt the taxation to support biomass energy development 

The tax reduction and exemption is an effective incentive policy widely adopted by many countries. 

The tax exemption covers income tax, fixed asset tax and VAT. Furthermore, Environment tax in 

Europe, which has a high rate for fossil fuel and exempt for renewable energy, is also a very useful 

incentive policy to encourage the development and utilization of clean energy, as while as to promote 

enterprise using the advance technology and improving the technology standard. 

China has adopted some tax incentive policies for some biomass technology utilization, including 

landfill gas utilization (full refund all of VAT), biogas project (13% VAT rate), biomass ethanol in pilot 

provinces and cities (full rebate all of VAT, exemption of consumption tax). But, the applicable range 

of these incentive policies is limited to demonstration regions and enterprises, and limited 

technologies are beneficial from these tax policy. 

Therefore, the report suggests that the Loan and Subsidy Incentive Regulation for Renewable 

Energy should be identified: 

• Consulting VAT rate of wind power, the VAT of biomass project can be levied on 8.5%, 

including biomass heat supply and generation power; and for some special biomass projects, 

which is well contributed for environmental protection, such as landfill gas utilization, large 

& medium scale biogas project, and biomass liquid fuel, the VAT should full refund. 

• The VAT refunds policy for biomass liquid fuel should be extending the whole country and 

whole related enterprises. The consumption tax for biofuel will be exempted. 

• Research the feasibility and scheme of levying carbon tax in order to enact the carbon tax in 

suitable time. The fossil energy will be levied upon the carbon, but the carbon tax of 

renewable energy, including biomass energy, will be exempted from. 

53 
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1. REPORT DATE (DD-MM-YYYY) 

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Subcontract Report 

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4. TITLE AND SUBTITLE 

Biomass Support for the China Renewable Energy Law: 

Final Report, December 2005 

5a. CONTRACT NUMBER 

DE-AC36-99-GO10337 

5b. GRANT NUMBER 

5c. PROGRAM ELEMENT NUMBER 

6. AUTHOR(S) 

Center of Renewable Energy Development, Beijing, China; Energy 

Research Institute, Beijing, China; National Development and 

Reform Commission, Beijing, China 

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NREL/SR-710-40625 

5e. TASK NUMBER 

IGIN.6031 

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Center of Renewable Energy Development, Beijing, China; Energy 

Research Institute, Beijing, China; National Development and Reform 

Commission, Beijing, China 

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ACO-4-44015-01 

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NREL Technical Monitor: Debra Lew 

14. ABSTRACT (Maximum 200 Words) 

Final subcontractor report giving an overview of the biomass power generation technologies used in China. Report 

covers resources, technologies, foreign technologies and resources for comparison purposes, biomass potential in 

China, and finally government policies in China that support/hinder development of the using biomass in China for 

power generation. 

15. SUBJECT TERMS 

International Programs; China; Biomass; agricultural waste; forest waste; municipal solid waste; animal manure; 

China Renewable Energy Law; renewable policy in China 

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