Is it beneficial to use biogas in the Danish transport sector?–An environmental-economic analysis

Rong-Gang Cong, Dario Caro and Marianne Thomsen

MPRA Paper from University Library of Munich, Germany

Abstract: Denmark is ambitious in the green transition of its transport sector. The biogas has potentials to substitute diesel as the vehicle fuel. In this paper, we examine the whole chain of biogas utilisation (biomass supply, biogas production and distribution, and fuel substitution) from both economic and environmental perspectives. We find that with low/high biomass supply potentials, the saved greenhouse gas emissions range from 0.89 to 1.66 million tons/2.19 to 4.27 million tons CO2e (carbon dioxide equivalent). The soil carbon stock could increase 52310/124770 tons with low/high biomass supply potentials (measured as remaining carbon in soil 100 years after application of digestate into soil). The biogas plant owners can obtain a return of investment ranging from 10.78% to 13.62% depending on biomass supply potentials and biogas production technologies. The farmers can save up to 717.93 and 1382.1 million DKK (Danish krone ) by substituting mineral P (phosphorus) and N (nitrogen) fertilisers in low biomass supply potential scenarios and 1.74 and 3.44 billion DKK in high biomass supply potential scenarios. Finally, the vehicle users have incentives to use biogas because of its cost advantage. However, there are also some potential barriers and uncertainties in achieving the green transition, e.g. initial investment for CO2 conversion equipment and diesel-vehicle users' sunk costs, which could require suitable policy supports. We suggest that using biogas in heavy-duty vehicles could be an effective way to reduce carbon emissions in the transport sector.

Keywords: Cost-Benefit analysis; Energy conversion; Energy substitution; Greenhouse gas emission; Renewable energy; Soil carbon stock (search for similar items in EconPapers)
JEL-codes: Q5 Q56 Q57 Q58 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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