The government has asked the industries and stakeholders in the compressed biogas (CBG) sector to share ideas to fast track setting up of manufacturing facilities, including creation of a fund to address financing issues.

Advisor to Prime Minister Tarun Kapoor, in his address at the World Biogas Association’s India congress 2024, on Wednesday exhorted the industry to share suggestions on avenues to accelerate the process of setting up and running CBG manufacturing facilities.

“We all must work as a team and try to find solutions. There are risks. People must take the risks. Financial institutions, lending, is a little bit of a problem. We are willing to intervene there also, so that we can either set up a fund or something. You have to come up with ideas to push lending in this area, because financial institutions are reluctant to lend,” the former Oil Secretary said.

Carbon market will take some time to develop in the country, but it’ll provide some kind of financial strength, he added.

Under the Sustainable Alternative Towards Affordable Transportation (SATAT), a total of 2,212 active letters of intents (LoIs) have been issued as of September 1, 2024. A cumulative 75 CBG plants have been commissioned across the country, and around 72 plants are under various stages of construction. As per the SATAT portal, around 11,883 tonnes of CBG has been sold in FY25.

SATAT encourages entrepreneurs to set up manufacturing facilities to produce and supply CBG to oil marketing companies (OMCs) for sale as automotive and industrial fuels.

Finding solutions

“From the government side, whatever support you people (industry) have asked for, we have tried to provide,” Kapoor emphasised.

He spoke about various schemes offered by the Ministry of New & Renewable Energy (MNRE), Ministry of Petroleum & Natural Gas (MoPNG) and Fertiliser Ministry to accelerate the use of CBG in the country.

“We are trying to push everyone in the government to support this sector, but we are still not moving at the pace we should. So, what do we need to do? You will have to tell us. In the next one and a half years, can we do at least 500 plants? For this, what are the steps required?,” he asked the industry members and other stakeholders at the event.

Kapoor informed that CBG is one of the favourite areas of Prime Minister Narendra Modi. “He constantly asks about the developments (in this sector) because he thinks that this is a sector where everyone stands to benefit,” he noted.

“So all areas that need intervention from the government, please tell us. But the industry also must gear up and give us some targets about your plans — that we will do so many plants — and we will run them also. Because what I also find is that out of the total 70 or so plants which are commissioned… Only 40 or some numbers are producing. Others are not running,” he pointed out.

Sector woes

Speaking about the issues faced by the CBG industry, GAIL Executive Director SN Yadav pointed out that the biggest challenge is finding land and feedstock. “It is a State government subject. Though Centre is supporting, equal support from the State governments is not coming, and that should be addressed,” he added.

On feedstock, he said CBG producers are not sure whether they will get the right quantity or quantity of the feedtock for their plants.

“As an offtaker, we have apprehensions on the quality of CBG, What should the quality of CBG be? Of course, there are standards and they are being revised. Once the quality of CBG is ensured at par with the piped natural gas (PNG) or the safety of the steel pipeline, then certainly, there will be no issues,” Yadav said.

Another issue is to sell the fermented organic manure, he said adding that India imports 25 per cent of its requirement of urea.

“We shall be generating huge quantities of fermented organic manure. How this manure will substitute urea or potash or phosphorus is a matter of research, awareness and discussion,” he said.

Related Topics