India Plans To Start 5,000 Compressed Biogas Plants In Four Years

India plans to start 5,000 compressed biogas plants over the next four years to curb oil imports and improve farm incomes.

“Setting up compressed biogas plants across the country will require an investment of nearly Rs 1.75 lakh crore,” said Dharmendra Pradhan, minister for petroleum and natural gas, at the launch of Sustainable Alternative Towards Affordable Transportation scheme in Delhi today.

To achieve this, public-sector oil marketers like Indian Oil Corporation Ltd. and Bharat Petroleum Corporation Ltd. have sought expression of interest from potential entrepreneurs to set up the plants and source the fuel produced from them. “Oil marketing companies will guarantee offtake for the biogas produced at Rs 46 per kg exclusive of GST,” Pradhan said.

The move is in line with government's target of reducing crude oil imports by 10 percent by 2022—by when Prime Minister Narendra Modi has also promised to double farm incomes in India. The government is promoting the use of alternative fuels for national commitments in achieving climate change goals, apart from creating a buffer against crude oil price fluctuations.

The plants are expected to produce 15 million tonnes of compressed biogas per annum—40 percent of India's current annual consumption of compressed natural gas of 44 million tonnes, according to a ministry statement. The government expects this initiative to generate direct employment for 75,000 people and produce 50 million tonnes of bio-manure for crops.

The Working Group on Biofuels, set up under the National Policy on Biofuels 2018, is finalising a pan-India pricing model for compressed biogas. Entrepreneurs who set up the compressed biogas plants would be able to separately market its by-products, including bio-manure and carbon dioxide.

Biogas is produced naturally through anaerobic decomposition from waste or biomass sources like agriculture residue, cattle dung, sugarcane press mud and solid waste. It's then purified and compressed, which produces a fuel with methane content of over 95 percent. The biogas will be transported through cascades of cylinders to fuel station networks of oil marketers for marketing as a green transport fuel alternative.

The government, according to the statement, also plans to integrate compressed biogas networks with city gas distribution networks to boost supplies to domestic and retail users in existing and upcoming markets.