Indian Biogas Association pitches for ₹30k crore investment for compressed biogas plants Nishant Krishna February 11, 2024

Indian Biogas Association pitches for ₹30k crore investment for compressed biogas plants

“Utilising agricultural residues for bioenergy production and soil enrichment, provides renewable energy sources while enhancing soil health,” – Indian Biogas Association Chairman Gaurav Kedia

Indian Biogas Association has recommended an investment of ₹30,000 crore for machinery and equipment required for biomass supply to compressed biogas plants to ensure 12 MMTA of LNG import reduction.

“Utilising agricultural residues like paddy straw for bioenergy production and soil enrichment instead of burning those, offers a dual benefit as it provides renewable energy sources while enhancing soil health,” said Indian Biogas Association Chairman, Gaurav Kedia.However, he pointed out some obstacles to procurement, such as unappealing economics, which make farmers prefer to burn, rather than sell off the field straw promptly.Due to the low density of straw, which increases the expenses associated with its collection, storage and transportation, he stated, “Improving logistics is not a feasible solution. Government intervention is essential to encourage the adoption of necessary equipment, such as subsidising combine harvesters capable of efficiently gathering straw”.“Additional support for balers and storage units will make efficient transportation and storage possible”, Kedia noted.He suggested that the government should also release the operational guidelines for crop residue management to provide financial assistance for the procurement of crop residue management machinery, establish custom hiring centres, create a supply chain for crop residue/paddy straw and promote awareness on crop residue management.As per the ASCI (Administrative Staff College of India’s) assessment of biomass potential in India, the country has a total crop production area of 198 MH with a total crop production of 775 million tonnes, generating 754 million tonnes of biomass and 230 million tonnes of surplus agricultural residue.Most of this surplus biomass, is burnt, because farmers lack proper collection equipment and motivation. In the first phase, the government should prefer the states with the largest share in biomass generation like, Punjab, (10.6 per cent), Uttar Pradesh, (9.8 per cent), Gujarat, (9.3 per cent), Maharashtra, (9.2 per cent), Madhya Pradesh, (8.8 per cent) and Andhra Pradesh, (7 per cent). Machinery and equipment over ₹30,000 crore would be needed to address the issue in these states.With this investment, the government will be able to ensure a smooth substrate supply for CBG plants, attracting an investment of ₹170 thousand crore.“It will also be significant for the economy and help the government achieve its green energy goals by saving almost 12 MMTA of LNG import,” Kedia added.“While the Union Budget of 2024, made a significant progress toward renewable energy, some significant obstacles still remain,” he opined.He adds that even with the additional funding, the Budget must provide long-term financing options to close the investment gap for major renewable energy projects. Along with PLI programmes, more incentives are needed, to increase the domestic production of essential components and to be independent of imports, Kedia noted.“The Market Development Assistance scheme has pushed for Fermented Organic Manure (FOM), produced from biogas plants”, mentioned Kedia.Under the MDA scheme, the Government is providing support of ₹1.5 per kg of Fermented Organic Manure (FOM).

Interim Budget takeaways

Finance Minister Nirmala Sitharaman, while presenting the Interim Budget, announced financial assistance for supporting the upstream side i.e., the biomass supply chain for Compressed BioGas (CBG) as well as the downstream side by phased mandatory blending of CBG with natural gas to be used as fuel for vehicles and domestic supplies.


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