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India launches initiative to promote compressed biogas as transportation fuel

In India, Shri Dharmendra Pradhan, Union Minister of Petroleum and Natural Gas & Skill Development and Entrepreneurship kicked off an innovative initiative in New Delhi with PSU Oil Marketing Companies (OMCs) inviting Expression of Interest (EoI) from potential entrepreneurs to set up compressed biogas (CBG) production plants and make available CBG in the market for use in automotive fuels.

On October 1, 2018, Shri Dharmendra Pradhan, Union Minister of Petroleum and Natural Gas & Skill Development and Entrepreneurship kicked off an innovative initiative in New Delhi with PSU Oil Marketing Companies (OMCs) inviting Expression of Interest (EoI) from potential entrepreneurs to set up compressed biogas (CBG) production plants and make available CBG in the market for use in automotive fuels (photo courtesy Markku Björkman).

Held on October 1, 2018, the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative is seen as a developmental effort that would benefit both vehicle-users as well as farmers and entrepreneurs.

According to Minister Pradhan, the initiative has the potential to boost the availability of more affordable transportation fuels, better use of agricultural residue, cattle dung and municipal solid waste (MSW), as well as to provide an additional revenue source to farmers. It will also help in tackling the problem of polluted urban air due to farm stubble-burning and carbon emissions.

Furthermore, the use of CBG will also help bring down dependency on crude oil imports and in realising the Prime Minister’s vision of enhancing farmers’ income, rural employment and entrepreneurship. The potential for CBG production from various sources in India is estimated at about 62 million tonnes per annum.

Part of 2108 National Policy Biofuels

According to a statement, CBG plants are proposed to be set up mainly through independent entrepreneurs. CBG produced at these plants will be transported using cylinders to the fuel station networks of OMCs for marketing as a green transport fuel alternative.

The 1 500-strong CNG stations network in the country currently serves about 3.2 million natural gas vehicles (NGVs). The Working Group on Biofuels, set up under the National Policy on Biofuels 2018, which was approved by the Union Cabinet in May 2018, is in the process of finalising a pan-India pricing model for CBG.

The entrepreneurs would be able to separately market the other by-products from these plants, including biofertilizer and carbon dioxide (CO2), to “enhance returns on investment” (ROI).

The plan is to roll out 5 000 CBG plants across India in a phased manner, with 250 plants by 2020, 1 000 plants by 2022 and 5 000 plants by 2025. These plants are expected to produce 15 million tonnes of CBG per annum, which is about 40 percent of current compressed natural gas (CNG) consumption of 44 million tonnes per annum in the country.

At an investment of approximately Rs. 1.7 lakh crore (INR 1 700 billion ≈ US$23.9 billion) this initiative is expected to generate direct employment for 75 000 people and produce 50 million tonnes of biofertiliser for crops.

Dried cow dung is a commonly used biomass fuel for cooking in India (photo courtesy Markku Björkman).

The National Policy on Biofuels 2018 emphasises the active promotion of advanced biofuels, including CBG. The Government of India had launched the GOBAR-DHAN (Galvanising Organic Bio-Agro Resources) scheme earlier this year to convert cattle dung and solid waste in farms to CBG and compost.

The scheme proposes to cover 700 projects across the country in 2018-19. The programme will be funded under Solid and Liquid Waste Management (SLWM) component of Swachh Bharat Mission-Gramin (SBM-G) to benefit households in identified villages through Gram Panchayats.

The Ministry of New and Renewable Energy has notified Central Financial Assistance (CFA) of INR 4 million (≈ US$56 000) per 4.8 tonnes of CBG per day generated from 12 000 Nm3 of biogas per day, with a maximum of INR 10 million (≈US$140 000) per project.

Furthermore, CBG plants can be integrated with city gas distribution (CGD) networks to boost supplies to domestic and retail users in existing and upcoming markets. Besides retailing from OMC fuel stations, CBG can at a later date be injected into CGD pipelines too for efficient distribution and optimised access of a cleaner and more affordable fuel.

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