India

Biogas as a fuel had a topsy-turvy journey. It has struggled long to get its due recognition in the renewable energy mix. A plethora of initiatives have already been laid out from different Ministries but, the sector is far-off from exploiting the immense potential, the country has on offer. At least, the on-field results portray that way.

Recently in a meeting called upon by NITI Aayog through Video Conferencing on 24th Sept 2020, IBA represented the industry and addressed the stimulus requirement through rationalization of several existant policies from different Ministries. The called upon meeting saw participation of several Ministries and its bodies (like MNRE, MoPNG, PESO, and IREDA) and several industry stakeholders. Hereby is a gist of the suggestions and recommendations provided to NITI Aayog on interventions sought from the Govt. to further the prospects of Compressed Biogas (CBG) projects in India.

1. Launching ‘Biogas-Fertilizer Mission’.

2. Launching ‘Biogas-Urja-Khad Abhiyan’.

3. Launching ‘Bio-urja-khad Parks’ Scheme on the pattern of ‘Solar Parks Scheme’, taken up on 12.12.2014 for the years 2014-15 to 2018-19’ and CFA be provided for the development of ‘Bio-urja-khad Parks’.

4. Reverse bidding process be adopted for getting competitive and sustainable price for Bio-CNG/ CBG, as adopted in Solar Mission, with the condition that Bio-CNG/ CBG projects would be ‘zero discharge’ projects, following BIS standards for Bio-methane, FCO for ‘Fermented Organic Manure’, pollution prevention rules, and other relevant regulatory requirements.

5. Provisions of the ‘Bio-urja-khad Parks’ Scheme to be such that all the bulk waste generators/ captive waste producers, like, sugar mills, agro-food processing industries, poultry farms, gaushalas, fruit & vegetable mandies, local/ municipal bodies, STPs and energy parks/ complexes/ centres/ community biogas complexes/ urjagrams ,set up over a period of time in different MNRE schemes are recognized, supported and transformed to become ‘Bio-urja-khad Parks’. Thus shall to avoid unnecessarily occupying additional land and setting up Bio-CNG/ CBG plants nearer to the biomass waste generation areas in a highly decentralized manner, thereby reducing carbon-foot-print in transporting biomass waste to long distances for centralized large plants and transporting fermented organic manure and Bio-CNG/ CBG back to the villages/ utilization locations and making the whole project cost ineffective and unsustainable in the long run.

A succinct roster towards furthering prospects of CBG in India

6. ‘Bio-urja-khad Parks’ to be nucleated with Bio-CNG/ CBG plants and supplemented with production of liquid fuels, namely bio-diesel using oil seeds & burnt oil, bio-ethanol using 2G technologies, processing woody materials and biomass solid fuels in the form of pellets/ briquettes.

7. This will establish the most sustainable concept of ‘Hybridization’ of a set of suitable bio-energy and other renewable energy technologies, generally nucleated around bio-energy (including bio-methanation) technologies, for a location is to be the ‘mantra’ for sustainable energy supply for sustainable and environment friendly development. This way the Solar Parks and Wind Farms will also become hybrid energy/ urja and khad producing centres.

8. Instead of competing for each other, strengths of one technology is to be used for overcoming weaknesses of the other renewable energy technology. Like Bio-CNG/ CBG, bio-ethanol, bio-diesel and biomass pellets/ briquettes to work as storage foe supplying energy when Sun does not shine and wind does not blow, instead of going for costly and environmentally dangerous battery and other storage systems of energy.

9. Introducing policy for formulation and implementation to actuate: ‘Biomass Waste Mining Area Allotment/ Auction Concept’ to ensure availability of Biomass feed-stock for BioCNG/ Bio-fuel plants and establishing highly decentralized ‘Biomass Waste Resource Banks (BWRBs)’.

10. Providing Generation Based Incentive GBI @ Rs. 20/- per Kg instead of capital subsidy over and above Rs. 46/- declared by OMCs and increased with inflation. It is arrived at largely for cattle dung based Bio-CNG/ CBG plants and the cost estimated by IBA is Rs. 73.76 per kg.

11. Fixing different prices for Bio-CNG/ CBG price, produced from different biomass wastes, namely, bulk waste generators like sugar mills, agro-food processing industries, municipalities, poultry etc. and that for agro-residue (collected from fields in different seasons and stored). It is required to internalize the cost of biomass wastes, as raw materials for energy fertilizer production, similar to coal plants. It has already been done in the case of bio-ethanol, wherein different rates have been fixed for C-heavy molasses, B-heavy molasses and sugar juice.

12. On the basis of calorific value of the ethanol fuel and its current price, Bio-CNG will have to be genuinely priced at Rs 119.3/kg (post-tax) i.e. 2.47 times higher than its present price of Rs 46/- per Kg under SATAT to be at par with fixed ex-mill

Table I

S.No Fuel Name Calorific value (MJ/Kg) Applicable Market Price (incl. taxes)

Eq. Price per unit of Energy value (in Rs./MJ)

I. Bio-fuels

1

2

3 Bio-Ethanol*

Bio-Diesel**

Bio-CNG***

II. Petroleum Fuels

1 CNG

2

3

4 LPG (commercial)

Petrol

Diesel 29.6

37.3

54.0

54.0

49.8

43.6

44.4 Rs.51.6/Litre

Rs.71.5/Litre

Rs.48.3/Kg

Rs.43.1/Kg*****

Rs.63.70/Kg****

Rs.75.1/Litre*****

Rs.71.5/Litre***** 2.21

2.20

0.89

0.80

1.28

2.30

1.89

* Revised ethanol price (from C-heavy molasses) as per the Ethanol Blended Petrol (EBP) Programme for supply to Public Sector OMCs. ** Price considered to be at par with Diesel prices. ***As per sepecification of biomethane mentioned in BIS standard IS 16087 (2016). ****As per prices declared by Public Sector OMCs in Dec, 2019. ***** Average of last one year (Oct, 2019- Sept 2020) prices in Delhi.

price of bio-ethanol derived from C-heavy molasses. Energy value base pricing of various petroleum fuels and biofuels can be deciphered from the Table-I wherein Bio-CNG is priced as one of the lowest, although it gives highest delivered calorific Bio-CNG to ‘City Gas Distribution (CGD)’ agencies and envis-

value/ Energy Value.

13. Setting-up a ‘Biogas-Fertilizer Fund’. For harnessing the total generation potential of 62.2 million tonnes per annum of Biogas/ Bio-CNG/ CBG/ RNG in India, the proposed “Biogas-Fertilizer Fund” will have an estimated financial corpus requirement of Rs. 9,44,664 crores, of which Rs. 97,392 crores will be pegged towards the ‘Credit Guarantee scheme’ and remaining Rs. 8,47,272 crores towards ‘Generation based Incentive (GBI)’ @ Rs.20/- per kg of Bio-CNG (produced as per BIS Standards) for 15 years of a tentative plant life. To begin with meeting, creating ‘Biogas-Fertilizer Fund’ of Rs.1,39,173 crore for five years for GBI, Credit Guarantee and Bio-CNG & organic fertilizer Infrastructure is required. 22. Introducing per unit of delivered calorific value/ Energy

14. For the above, outlay of Rs. 9,44,664 crores for Bio-CNG/ CBG sector is , it will bring an enormous overall return to the govt. in the form of savings from reduction in crude oil import, come of the farmers. The agricultural universities/ institutions

subsidy savings on chemical fertilizers, and meeting the GHG emission reduction target as per the Nationally Determined Contributions (NDCs).

15. The consolidated savings on above accounts are estimated at Rs.11,02,200 crores in 15 years span (useful life of a typical biogas/ Bio-CNG plant). Thus, the net value creation, Exchequer, through harnessing of total Bio-CNG/ CBG/ RNG potential in India and is certainly not a loss making investment. 16. The inclusion of CBG under ‘Domestic Pool Price Mechanism’ for natural gas procurement and price fixation is required to be induced. 17. Introducing policy for defining a ‘blending quota’ (5%/10 %) for statutory mixing of Bio-CNG/ CBG/ bio-methane in the natural gas mix is required.

18. Introducing policy for facilitating injection and selling of aged ‘Village Gas Distribution (VGD)’.

19. Launching scheme for ‘Village Biogas Grid (VGD)’ for replacing LPG cylinders.

20. Integrating VGDs and CGDs with the Natural Gas Grid infrastructure over a period of time is required.

21. Including Bio-CNG in the list of petroleum fuels/ auto-fuels for deciding domestic production and purchase strategy and policy by PNGRB and DGH of MoPNG is required.

Value of different types of ‘Bio’ and ‘Petroleum’ auto-fuels, has to be the basis of deciding procurement/ selling prices.

23. Creating Bio-CNG plant based ‘Organic Fertilizer distribution and utilization infrastructure’, through replacing/ reducing existing chemical fertilizer usage is required for doubling inestimated to be Rs.1,57,536 crore, is a net surplus for the Govt.

to come out with the prescription for dosages of ‘Fermented organic Manure’ for different crops, similar to chemical fertilizers.

24. GST, generally, it ranges from 5%-18% for Bio-CNG/ CBGequipment supply. Thus creating an ‘Under Inverted Structure’ - Unambiguous definition is required for CBG/ Bio-CNG/ Biogas plants and its Plant & Machinery (presently defined in 84, 85 and other sections), by putting an ‘exhaustive list’ as Annexure. Service Contracts rate of 18% should be reduced

to 5% for composite and individual projects. 5% GST on CBG and differential of CNG is to be streamlined through a Policy for CBG-CNG dispensing stations.

25. Tax Holidays: corporate tax exemption for 10 continuous years is required.

26. Streamlining accelerated depreciation is required.

27. Establishing Fair Remunerative price (FRP) for CBG/ BioCNG is required.

28. For CLU, issuing guidelines to State govts is needed to waive of this requirement for CBG/ Bio-CNG projects, being green projects.

29. Addressing the issue with regard to PESO approval. For this, PESO to issue detailed guidelines for execution of the CBG/ Bio-CNG projects and have post installation inspection and monitoring mechanism as per rules and guidelines, as against the present system of prior approval.

30. CBG/ Bio-CNG/ RNG/ Biogas/ Biomethane projects to be brought in the ‘White Project’ category of CPCB, with the mandatory requirement that these projects will be having zero discharge projects.

31. Facilitating Ease in CBG/ Bio-CNG Project Financing: Mandatory guidelines for facilitating loans from unwilling Banks/ Financial Institutions (FIs), ensuring implementation of ‘Priority Lending’ directives of RBI and disseminating awareness amongst Banks/ FIs is required by all the coordinating Agencies.

32. Market Development Assistance (MDA), available for ‘City Compost’ ia also needed to be extended for ‘Fermented organic Manure’ produced from CBG plants, with immediate effect.

33. Preparation and issuing FCO specifications for the digestate itself , liquid digestate fraction after solid extraction and upgraded ‘Fermented organic Manure’, as organic fertilizers.

34. Leveraging of gas pipeline Infrastructure for introducing CBG/ CNG/ RNG/ Biomethane injection quota in the CGD/ VGD/ Natural Gas Grids is required.

35. Creation of Renewable Purchase Obligation (RPO) ecosystem for CBG/ Bio-CNG is required similar to solar electricity.

36. Single window clearance for projects including identification of respective departments/ bodies, integration of other departments’, streamlining approval process, through MNRE/ SNA and other departments’ portals, integrated file tracking mechanism for corresponding clearance departments and systematic-two-way-communication between stakeholders 37. Formulating exhaustive Standards for Bio-CNG/ CBG/ RNG/ Biogas Industry: Customized standards for- Terms and Definitions, Safety, Operations, Technical Specs, Emission, etc. in line with global standards to create a better level playing field amongst different auto-fuels.

38. Creation of ‘Cross-functional Biogas/ Bio-CNG/ CBG/ RNG Task Force’ and scheduling/ holding periodical meetings, between the stakeholders with the Task force is required.

39. A ‘High Powered Committee’ is required to be set up for preparation of ‘Biogas-Fertilizer Mission’, ‘Bio-urja-khad Parks’ and guideline on Pricing, GST and ‘Biomass Waste Mininig Area Allotment’ concept, development and implementation of strategic policies etc., under NITI Aayog.

40. The said ‘High Powered Committee’ is required to be set up under NITI Aayog, because 4-5 Ministries currently involved as of now do not have the holistic vision, as it their mandatory limits to address the concerns of other ministries/ departments.

41. The Bio-CNG/ CBG sector is to be treated as ‘Social infrastructure sector’ with its four distinct outputs of waste treatment, energy generation, organic fertilizer production and highly decentralized and huge employment generation and reducing dependence on imported fossil fuels, solar systems and wind generators component.

42. The Bio-CNG/ CBG sector will also meet strategic energy needs, in a war-like-situation. The development of Bio-CNG/ CBG sector will make India ‘Atma Nirbhar’ in true sense.

43. It will be reducing huge drainage of foreign exchange, being done by the entire energy sector, like petroleum and solar. The MoPNG has knowingly/ unknowingly been draining foreign exchange every moment by not giving fair price for Bio-CNG/ CBG sector under the SATAT scheme.

44. There is a need to do immediate course correction by considering and implementing the suggestions and recommendations given above.

Dr. A. R. Shukla

President Indian Biogas Association