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Making livestock waste into a source of income

Believe it or not, agriculture, including livestock breeding, affects the environment almost twice as much as the transportation industry.

Dmytro Anufriev, CEO Recycling Solutions, Member of board UMG Investments

What’s the biggest producer of greenhouse gases, the transport sector, or agriculture?

Believe it or not, agriculture, including livestock breeding, affects the environment almost twice as much as the transportation industry. According to reports of the Intergovernmental Panel on Climate Change, the livestock industry produces 24 percent of all greenhouse gas emissions. 

Moreover, in view of the expected growth of the world’s population from 7.7 billion to 9.7 billion people by 2050 according to the United Nations projections, the impact of agriculture will increase by 25 percent. And considering the growth of meat and milk consumption in countries with rising incomes, the environmental damage caused by livestock could grow even faster than that.

So the world economy faces three challenges in the further development of agriculture, and specifically livestock farming:

  • the first is to feed the world’s growing population;
  • the second is to minimize the negative impact agriculture on the environment;
  • the third is to maintain sustainable economic growth.

In this context, the transition from a linear model of the economy, including in the agriculture sector, to a circular one, is a global-level issue. In a circular economy, the waste from core production itself becomes a raw material for making other products. In the case of agriculture, waste can be harnessed to produce organic fertilizers, biogas, biofuels, bio-additives for traditional fuels (petroleum and diesel), as well as high-protein additives for animal feed.

Ukraine is only at the beginning of the process of switching to a circular economy.

Every year about 100 million tons of waste are generated by the country’s agro-industrial complex, but only a small part is recycled or repurposed. For instance, the installed capacity for producing electricity from biomass and biogas is 267 MW, which is only about 3 percent of the total generating capacity of the country’s renewable energy producers. In 2020, about 750,000 MW/h of electricity was produced from biomass and biogas, which is a mere 1.5 percent of industrial consumption in Ukraine, and only about 1 percent of the agriculture waste was used to generate this amount. 

But Ukraine could make much more of its waste: according to reports of the IFC and Bioenergy Association of Ukraine, more than 20 percent of agro-industrial complex’s waste could be used more efficiently. 

Animal feed production

Energy is not the only thing that can be generated from agricultural waste. As noted, in addition to energy, agricultural waste can also be used to produce fertilizers, components for animal feed, and biofuels.

A smaller but no less important segment is waste from slaughterhouses. In Ukraine, the amount of poultry stands at 234 million, cattle at 3 million and pigs at 6 million. The raw material potential of the waste from this industry is about 1 million tons per year.

Major chicken producers generate 270,000 tons of livestock waste. Some of these companies have already installed equipment and are recycling their own waste. But another 200,000 tons of waste generated by household farms goes unrecorded. In addition, small and medium-sized producers, and small poultry farms also produce such waste.

This kind of raw material is generated when animals are slaughtered for meat. It is a valuable component for the production of protein-based feed additives, as well as for the production of animal fats, which are used as bio-additives to diesel fuel to reduce harmful emissions.

Today, soybean meal is a leader among feed proteins, and is also a pricing driver for protein-based feed in Ukraine and in the world. However, the price of 1 ton of meat and bone meal in protein equivalent is 30-40 percent lower than that of soybean flour. In addition, global demand for protein feed is increasing – imports into Asia from 2009 to 2018 doubled from 1 million tons per year to 2 million tons per year.

So clearly there is a lot of potential for livestock waste recycling in the domestic agro-industrial complex. Harnessing that potential will not only make Ukraine’s economy greener, but also attract investments which, if properly managed, will yield a good profit.

First signs

Taking into account the market situation and the obvious surplus of raw materials in Ukraine, our company, Recycling Solutions, deals with strategic by-product management and has already become a co-investor in the construction of the Feednova Plant for recycling livestock waste into animal feed. It is a modern company, based on the principles of circular economy, producing high protein feed additives for livestock and domestic animals, and producing animal fats for bio-additives to diesel fuel.

The company collects, transports, prepares and recycles livestock byproducts not for human consumption. Importantly, the company buys raw materials (waste) from small and medium-sized livestock producers. We make recycling as convenient as possible for small and medium-sized businesses, and ecologically safe for local communities. And in doing so, we raise the level of economic culture in Ukraine.

Feednova is an example for Ukraine of European-style effective management of livestock waste. The plant’s raw materials capacity is 70,000 tons per year. We just need several more such enterprises at the domestic level. There are enough raw materials available to meet demand both in the domestic market, and abroad.

What’s next?

State support and the digitalization of the sector are also needed to further develop agricultural raw material recycling in Ukraine. And we need further harmonization of Ukrainian legislation with EU laws and regulations.

Today a policy to improve environmental friendliness has been declared at the state level. A national economic strategy has been adopted, which sets the goal of creating an environmentally neutral economy by 2060 in Ukraine through implementing the EU’s green policies. At the same time, the infrastructure for livestock waste recycling is not yet well developed. Of the 18 enterprises of the state animal waste utilization concern Ukrvetsanzavod, six are not operating.

What is needed to fix the situation is private investment – both Ukrainian and foreign. The Feednova plant is a prime example. The company is working on four to five potential investment projects for agricultural waste recycling, and other players are also developing in this area. A digital platform containing a comprehensive database on the generation, current availability, volume and location of such waste is needed for further progress – the reliability and availability of such information is a crucial necessity for potential investors.

The Ministry of Digital Transformation of Ukraine is working to create a digital platform intended to help solve this problem. The cooperation of farmers, processing companies, Ukrainian and foreign investors, combined with support from the state and the active participation of local communities in this process, will ultimately generate a synergistic effect, which will be translated into considerable added value, GDP growth, new jobs and additional revenues for the budget.

Moreover, a systematic solution to the recycling problem and the transition to a green, circular economy doesn’t stop at agricultural raw materials. Every year more than 400 million tons of waste are generated by Ukrainian industry as a whole. Only 20-30 percent of this is recycled or repurposed. 

So there is plenty of room for improvement in the response to this challenge, as well as to the challenge of CO2 emissions in general in the digital age. The European integration of Ukraine’s country’s economy and the country’s participation in the Fourth Industrial (Technological) Revolution will be one of the ways to meet these challenges.