Government signs MoUs for 900 compressed biogas plants

The Ministry of Petroleum & Natural Gas (MoPNG) has signed MoUs with leading oil and gas marketing companies and technology providers to establish Compressed Bio-Gas (CBG) plants across India under the Sustainable Alternative towards Affordable Transportation (SATAT) initiative.

The MoUs have been signed with energy companies JBM Group, Adani Gas, Torrent Gas and Petronet LNG for setting up of CBG plants, and with technology providers in CBG sectors, Indian Oil, Praj Industries, CEID Consultants and Bharat Biogas Energy for facilitating availability of technology for the projects.

Commenting on the development, Dharmendra Pradhan, Minister of Petroleum & Natural Gas said, “Letter of intent for 600 CBG plants have already been given and with today’s signing of MoUs for 900 plants, a total of 1,500 CBG plants are at various stages of execution. Rs 30,000 crore of investment is envisaged in these 900 plants.”

The Indian government under the SATAT scheme envisages setting up of 5,000 CBG plants by 2023-24 with a production target of 15 MMT; this is expected to create both geener fuels and also new employment opportunities in rural belts. However, despite the ambitious goal, the implementation has been slow due to various reasons including unavailability of raw materials, shortage of storage space, segregation of wastes, and lack of established biomass pricing mechanism. Regulatory approvals and financing are other major hindrances.

What is CBG?

Compressed Biogas (CBG) is purified and compressed biogas, which is produced through a process of anaerobic decomposition from various waste/ biomass sources like agriculture residue, cattle dung, sugarcane press mud & spent wash of distilleries, sewage water, municipal solid waste (MSW), biodegradable fractions of industrial waste etc. Research suggests that CBG though similar to   CNG, it offers better calorific value and can thus  be used as green fuel in automotive, industrial and commercial sectors. The government has offered a procurement price of Rs 46 till the year 2024 with takeoff assurance of 10 years plus GST

India’s emission woes

As per a white paper released by SIAM in March 2019, there are growing concerns about the use of fossil fuels regarding burgeoning oil import bill, rising levels of air pollution, CO2 emissions and depleting stocks of mineral oils like gasoline and diesel. The Government of India, therefore has mooted a roadmap for reduction of import of crude oil dependence by 10% by 2021-22 and reducing the energy emissions intensity by 33%-35% by 2030 as per the Nationally Determined Contribution (NDC) targets agreed in COP21 at Paris, by increasing production of natural gas; promoting energy efficiency and conservation measures; giving thrust on demand substitution; capitalizing untapped potential in biofuels and other alternative fuels/renewables; and implementing measures for refinery process improvements.

Referring to a report on low carbon strategies for inclusive growth penned by  Kirit Parikh in 2014, the white paper reveals that the transport sector contributed 138 TMT of CO2 in 2007-2008, which was around 7% of overall CO2 from India. With the higher demand of fuels in future, it is expected that the contribution could rise to 346 TMT by 2022 in a business-as-usual case, an increase of about 150 percent.