It is being promoted for blending with CNG and PNG. However, infrastructure issues need to be sorted out
amul will soon set a template for a circular economy.
After tasting success with its BioCNG pilot project in Banas Dairy, Gujarat, Amul is now looking at four more such new plants in Banaskantha with an investment of $230 crore, Jayen Mehta, Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), had shared recently.
BIOGNG Is an advanced version of biogas produced from organic sources such as animal manure (farm yard manure and food waste. Biogas has been traditionally used in India’s rural landscape.
Amul’s move is also in sync with the Centre’s initiative to promote cleaner fuel as well as bring down the country’s dependence on imported and expensive fossil fuel. In fact, on November 25, the Centre announced mandatory blending of CBG (Compressed Bio-Gas) in CNG (Transportation fuel) and PNG (Domestic cooking fuel) segments of City Gas Distribution (CGD) Sector.
CBG Blending Obligation (CBO) will promote production and consumption of Compressed Bio-Gas in the country, Hardeep Singh Puri, Minister of Petroleum & Natural Gas and Housing & Urban Affairs, had said. A decision to introduce phase-wise mandatory blending of CBG in CNG (Transport) and PNG (Domestic) was taken by the National Biofuels Coordination Committee (NBCC), chaired by Puri.
The key objectives of the CBO are to stimulate demand for CBG in CGD sector, reducing Liquefied Natural Gas (LNG) imports, saving in forex, promoting circular economy and to assist in achieving the target of net zero emission among others.
The CBO will be voluntary till FY25 and mandatory blending obligation would start from FY26. CBO shall be kept as 1 per cent, 3 per cent and 4 per cent of total CNG/PNG consumption for FY26, 2026-27 and 2027-28 respectively, the official statement had From 2028-29 onwards CBO will be 5 percent. A Central Repository Body shall monitor and implement the blending mandate based on the operational guidelines approved by the Minister for Petroleum & Natural Gas.
This is definitely a step in the right direction, albeit a bit late. Besides, for smooth operations and implementation of the projects certain hurdles need to be cleared.
According to industry players, there is no organised system of collecting waste and disposing it. There is an urgent need to create a proper collection system.
CBG Blending Obligation scheme is to boost demand for compressed bio-gas in City Gas Distribution sector, reduce LNG imports and save on forex
Currently, there are few such project developers and availability of technology is also a challenge. For the project to succeed there has to be long-term assurance of feedstock, said an industry player, adding a lot will also depend on the kind of biomass that can be procured.
According to Gaurav Kedia, Chairman, Indian Biogas Association, “As such blending is possible and it is also being done. But, you need to upgrade the biogas and take out the undesirable components like C02, hydrogen Sulphide and Ammonia etc.
There are standards prescribed by BIS. Yes, blending will create a fuel which is also a lot cleaner than typical CNG and PNG. It can reduce greenhouse emission by at least 30 per cent or so and it will also help reduce the air pollution if we look at it on a life analysis basis.”
Kedia agrees that among the existing challenges there is a need to improve infrastructure. While there is no worry on the demand side, there could be issues on the supply side given the current capacity is less than one per cent.
According to him, there could be some technical challenges from the promoter as well as seller side, but it will not create a major hurdle. But this policy will be a boost to the sector and will attract investors. In fact, 5 per cent blending of biogas with natural gas will reduce LNG import $1.17 billion.
Infrastructure, clearly is the key aspect, as not all plants will be located near the CNG network and pipelines will be required. Besides, infrastructure, funding of such projects will also need a boost with larger awareness campaigns to sensitise bankers and other institutions.
On December 4, Rameswar Teli, Minister of State in the Ministry of Petroleum & Natural Gas, in a written reply in Rajya Sabha, informed about the government steps including incentivisation and supporting research and development, promoting production CBG from various feedstock, including agricultural and municipal waste, and its use in transportation sector.
These measures include: Central financial assistance for setting up of plants for generation of Biogas/Bio-CNG from urban, industrial and agricultural waste; Concession on custom duty for import of machinery and components required for initial setting up of projects for generation of Power and Bio-CNG; Additional Central Assistance for Municipal Solid Wastes (MSW) based CBG plants under Swachh
Bharat Mission Urban 2.0; Remunerative CBG procurement price and indexing the same with CBG Retail Selling Price; Policy guidelines for co-mingling of CBG with Natural Gas in CGD network for improving offtake; among others.
As in the case of electricity, here too financial issues between the Centre and States can crop up. Promoters may have to deal with States directly for payments.
Then there is also issue of pricing that will need to be reworked after blending – CNG price and CBG price.
Therefore, an entire eco-system needs to be developed to make it a success.