Biogas is produced naturally through a process of anaerobic decomposition from waste sources such as agricultural residue, sewage treatment plant waste, sugarcane press mud, etc. This waste is collected and processed to produce a raw gas, which is then converted to electricity. After further mechanical, chemical and purification processes, the gas is compressed and this is called Compressed Biogas (CBG)

CBG has a pure methane content of over 95% and is exactly similar to the commercially available natural gas in its composition and energy potential. It can, therefore, be used as an alternative renewable automotive fuel. Given our country’s potential for the production of CBG, it is estimated that about 62 million tonnes can be produced per annum

There are multiple benefits to using CBG. It helps with a reduction in carbon emissions and pollution from responsible waste management, an additional source of revenue for farmers that can help boost the rural economy and employment. It also helps with a reduction in the import of natural gas and crude oil. This can act as a buffer against crude oil/gas fluctuations and can help the country achieve its climate change goals.

This very potential has been noticed by the Government of India (GoI), and in 2018, they launched the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme, which will benefit vehicle users as well as farmers and entrepreneurs. The idea is to get CBG plants set up through independent entrepreneurs and transport the CBG produced at those plants in cylinders to the fuel station networks of Oil Marketing Companies (OMCs). The OMCs will then market and sell the CBG as ‘green transport fuel’. Any by-products that are produced, like bio-manure and CO2, can be sold separately to the market to enhance returns.

With this scheme, the government plans to roll out 5,000 CBG plants across the country. This initiative is expected to generate direct employment for around 75,000 people and produce around 50 million tonnes (mt) of bio-manure for crops. Going forward, besides retailing from OMC fuel stations, CBG networks can be integrated with City Gas Distribution (CGD) networks as well to boost supplies of a cleaner and more affordable fuel (replacing LNG), to domestic and retail users. Not only the government but the private sector is driving momentum too.

IOT Infrastructure & Energy Services, a joint venture between the state-owned IOCL and Germany’s Oiltanking GmbH, is upgrading its biogas plant to manufacture CBG for vehicles. The plant, with an investment of Rs. 250 million and the implementation of a tech development team, was converted into a bio-CNG unite with a daily output of 12,000 kgs in July 2019. IOT is now looking to set up five greenfield projects for which they are in talks with agri-waste companies that can supply feedstock, and they are also in talks with OMCs to sell bio-CNG. Their idea is to set up manufacturing units in places where feedstock is available, and then sell the product in nearby areas.

Replacing imported LNG with farm-waste-based CBG will surely enhance energy security and foreign exchange outflow. In October 2018, Union Minister for Petroleum and Natural Gas, Dharmendra Pradhan, announced a target of 15 mt of bio-CNG. And to encourage the sector, the central government is offering a subsidy of up to Rs. 40 million and a guaranteed bio-CNG offtake price of Rs. 46 per kg.

However, there are still no legal standards or guidelines issued by the government over the use of CBG in vehicles as a substitute to CNG. There are also no guidelines for the injection of CBG into the natural gas grid. Hence, project developers will need regulatory approvals for grants and permissions from different government departments.

For the country to meet its estimated CBG production potential, clear guidelines and legal standards will have to be set to be able to transparently move from CNG markets to CBG markets.

Summarized from Powerline Magazine

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