Mar 24, 2017

Start of Kompogas business in the U.S.

Hitachi Zosen Corporation (HZC) is to start first Kompogas business in the U.S. jointly with Hitachi Zosen Inova AG (HZI), its wholly-owned subsidiary engaged in EPC and service business of Energy from Waste (EfW).
Project SPC (Special Purpose Company) established by HZ group companies constructs a Kompogas plant in San Luis Obispo County, California, and will operate the plant generating electricity with compost sale for 20 years.

Summary of transaction:
HZI acquired the Kompogas EPC business of Axpo Kompogas Engineering AG (Komeng) in 2014. In order to promote Kompogas business in the U.S., Kompogas SLO LLC being the Project SPC is established by capital contribution of HZC group companies and starts the construction, operation and maintenance of the plant. Investment to be recovered by sale of electricity generated by gas engine and biogas produced from plant and sale of compost as by-product of methanation process. For HZC group companies, it is the first Kompogas business as well as the first waste treatment plant as DBFOO (Design, Build, Finance, Own and Operate) in the U.S.
The plant will handle around 30,000 tons of green waste and source separated municipal organic waste from SLO County and produce 2’907’000 Nm3 biogas by Kompogas technology every year. Electricity generated with biogas and gas engine is to be sold to the local electric company which will be capable of supplying electricity up to some 600 households, and compost produced as residue will be sold separately. This plant is maintained and operated by our group companies for 20 years.

Summary of Kompogas business:
1.SPC:                      Kompogas SLO LLC
2.Business:                Construction and operation of Kompogas plant
3.Total cost:              Approximately USD 22 million
4.Site:                       San Luis Obispo County, California, U.S.A.
5.Construction period: December 2016 to June 2018
6.EPC:                      Hitachi Zosen Inova U.S.A. LLC
7.Operation period:     20 years from July 2018

Summary of plant:
1.Capacity:                30,000 tons per annum (green waste and food waste)
2.Biogas generation:    2’907’000 Nm3 per annum
3.Gas Engine:             730kW
4. Residue:                20,000 tons per annum (solid compost and liquid fertilizer)


For the financing of the project, SPC receives the syndicated bank loan from JBIC, Japan Bank for International Cooperation and private commercial bank. For JBIC, this is the first financing for transactions related to waste processing project.
In the U.S., USDA and USEPA are calling for 50% reduction of food waste by year 2030. In California, state sets forth the ambitious goal to reduce 75% of solid waste by year 2020 as methane gas from landfill and dairies constitutes the second largest source of GHG. State of California is even considering the landfill ban of all organic waste.
North Eastern states as well as California are enforcing the environmental restriction as the part of its measures to curve GHG emission, thus Kompogas technology of HZC group is expected to make an important contribution.

Kompogas Technology of HZI:
Kompogas is one of the leading technologies for dry anaerobic digestion. Organic waste is treated under anaerobic conditions with temperature of 55℃ to produce biogas via fermentation process with microorganisms. The digestate is used as compost for agricultural and home gardening purposes. Kompogas technology of HZI is patented in more than 30 countries in the world with 82 reference plants located mainly in Switzerland, Germany and other European countries.

Kompogas business for HZI:
HZI’s business was mostly dominated by EPC and service related to EfW plant. In order to expand business, HZI acquired Kompogas business of Komeng in 2014 which enables HZI to offer integrated solution of EfW plant with Kompogas. HZI recently obtained Kompogas plant turnkey order in Scandinavian country. HZI is planning to expand its business capitalizing on the synergy of EfW and Kompogas technology.