Blending of bio-gas in CNG, piped gas for households mandatory from FY26

In a bid to enhance the consumption of biofuels, the government has announced mandatory blending of compressed bio gas (CBG) with piped gas supplied to households and compressed natural gas (CNG) for the transpire sector.

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The mandate, CBG Blending Obligation (CBO), will promote production and consumption of Compressed Bio-Gas (CBG), Oil Minister H S Puri said.

The National Biofuels Coordination Committee (NBCC), chaired by Puri, announced on Friday the introduction of phase-wise mandatory blending of CBG in CNG (transport), and piped natural gas or PNG (domestic) in the city gas distribution (CGD) sector, the Ministry of Petroleum & Natural Gas (MoPNG) said on Saturday.

Blending obligation

The key objectives of the CBO are to stimulate demand for CBG in the CGD sector, import substitution for Liquefied Natural Gas (LNG), saving in forex, promoting the circular economy and assisting in achieving net zero emissions.

Puri said the order would encourage investment of around Rs 37,500 crore and facilitate establishment of 750 CBG projects by 2028-29.

The CBO will be voluntary till FY25 and mandatory blending obligations would start from FY26. It will be kept at 1 per cent, 3 per cent and 4 per cent of the total CNG/ PNG consumption for FY26, FY27 and FY28, respectively. From FY29 onwards, CBO will be 5 per cent.

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A Central Repository Body (CRB) will monitor and implement the blending mandate based on the operational guidelines approved by the Minister.

Welcoming the development, Mahesh Girdhar, who is the MD and CEO of CBG producer EverEnviro Resource Management, said that incorporating CBG into the energy mix, will not only reducing dependence on traditional fossil fuels but also promote efficient recycling of organic waste into a valuable resource.

“By encouraging the use of clean and renewable energy sources, the policy underscores the importance of mitigating climate change and minimising our carbon footprint. Furthermore, the expansion of CBG usage will stimulate investment in the renewable energy sector, thereby creating employment opportunities and driving economic growth. This move will provide the necessary stability for CBG developers to make substantial investments in infrastructure, ensuring a reliable and sustained supply of CBG,” he added.

Focus on Maize

Discussions on promoting production of ethanol from maize were conducted with all stakeholders, especially the Department of Agriculture and the Department of Food and Public Distribution (DFPD), MoPNG said.

The area under maize, yield per hectare and production had increased in the last few years. The ministry, in consultation with the Department of Agriculture and DFPD, had initiated efforts to develop high starch yielding varieties, improve the quality of maize DDGS (Dried Distillers Grain Solids) by removing aflatoxins, and faster registration of new seed varieties with high starch. Maize training programmes for distillers had been initiated with seed companies. 

Sustainable Aviation Fuel

In an important announcement on Friday, initial indicative blending percentage targets for Sustainable Aviation Fuel (SAF/Bio- ATF) were set by the committee.

This was based on comments received from the stakeholders, including the Ministry of Civil Aviation (MoCA), Niti Aayog and oil marketing companies (OMCs), the capacity of Sustainable Aviation Fuel plants coming up in the country and projected ATF sales.

The initial indicative blending percentage of SAF in ATF is 1 per cent in 2027 (initially for international flights) and 2 per cent in 2028 (initially for International flights).