Govt may tweak low performing Compressed Bio Gas scheme in rural areas

Target of setting up 5000 plants till 2023 heavily lagging behind

The ministry of petroleum and natural gas is looking to tweak the sustainable alternative towards affordable transport (SATAT) scheme to incentive more small-scale projects, especially in semi-urban and rural areas.
 

Launched in 2018, SATAT aims to incentivise production of compressed biogas (CBG) from various biomass sources. But the initial target of having 5,000 CBG plants over the next five years has faltered and a fresh approach is required to fast-track the opening of facilities, officials have told Business Standard.
 

Case in point, only 35 plants have come up under the SATAT initiative till July, the ministry has informed Parliament. Since then, a single plant has gone live in Punjab’s Sangrur with a capacity of 33 tonnes of CBG per day. Constructed by leading German bio-energy company Verbio AG at a cost of Rs 220 crore, it will process 300 tonnes of paddy straw per day.
 

But despite the much-publicised launch of this latest plant, considered to be the largest of its kind in Asia, officials say setting up such high-ticket investment takes time.
 

“The setting up of large plants is expected to create many jobs and strengthen the waste-to-energy ecosystem. But a shift in focus is necessary to reach the committed goals of agri-based renewable energy production and reduction in stubble burning within the timelines planned by the government,” a senior official said.
 

A greater geographic spread is required to effectively combat the challenge of crop waste disposal nationwide, he said.

“Therefore, smaller plants in rural areas and in urban fringes can be incentivised more under the scheme. For this, the operational parameters of these plants have to be changed. We are looking into it,” he said.

High cost outlay
 

The high cost of settling up plants, low remuneration model, and other factors have led to low interest.
 

SATAT ensures that oil-marketing companies (OMCs) provide floor prices for the off-take of CBG for the first 10 years through upfront long-term agreements. CBG produced at these plants are transported through a cascade of cylinders to the fuel station network of OMCs for marketing as a green transport fuel alternative.
 

But industry insiders said these prices are too low, and the agreements provide them little room to alter the supply based on market conditions such as the seasonal availability of raw materials. They also argue that transportation remains a major difficulty.
 

The high cost of settling up plants, low remuneration model, and other factors have also dampened the interest of the industry.

On the other hand, the government is also discussing ways to encourage the construction of more CBG plants in urban areas. Given the high amount of trapped methane in municipal waste, and the potential of removing waste currently headed for landfills.
 

According to estimates from the ministry of new and renewable energy, India has the potential to generate 1.5 metric tonnes per annum (MTPA) of CBG or bio-CNG through the treatment of municipal waste. A 100 per cent segregation of waste at source is critical for the same. This has been achieved only in only a few cities, such as Indore.
 

More talks planned

Interministerial discussions are also planned for a more focused approach on biogas production, another official said.

“Research institutes working with the government have suggested the need for reinstating the New National Biogas and Organic Manure Programme, which had run till March 2021,” he said.
 

Run by MNRE, the programme helped producers in setting up biogas plants.
 

The government has till now undertaken a series of efforts to promote the setting up of CBG plants. These include the inclusion of CBG projects under white category’ by the Central Pollution Control Board on a case-to-case basis and inclusion of CBG projects under priority sector lending by the Reserve Bank of India.
 

The department of fertilizers has ordered fertilizer companies to mandatorily offtake fermented organic manure produced by CBG plants.

FEW TAKERS

• Launched in 2018, SATAT aims toincentivise production of compressed biogas (CBG) from various biomass sources
• The initial target of having 5,000 CBG plants over the next five years has faltered
• The high cost of setting up plants, low remuneration model, and other factors have led to low interest
• Only 35 plants have come up under the SATAT initiative till July, the ministry has informed Parliament
• Only one plant has gone live in Punjab’s Sangrur with a capacity of 33 tonnes of CBG per day