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BioCNG in India – Benefits & Challenges

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BioCNG, or bio-compressed natural gas, is a renewable energy source derived from organic waste. It’s an emerging sector in India, with the government introducing blending mandates to stimulate its demand and adoption. The National Biofuels Coordination Committee has announced a phase-wise mandatory blending of biomethane in compressed natural gas (CNG), aiming to promote a circular economy and assist in achieving net-zero emissions. BioCNG can also be used as a cooking fuel and can generate bio-fertilizers, enhancing soil quality and crop yield. The government has created an enabling ecosystem to promote BioCNG, including various national-level programs.

BioCNG in India mind map

This topic of “BioCNG in India – Benefits & Challenges” is important from the perspective of the UPSC IAS Examination, which falls under General Studies Portion.

BioCNG: What & How

  • What is BioCNG? BioCNG, or bio-compressed natural gas, is a renewable and sustainable version of CNG (Compressed Natural Gas). It is derived from organic waste materials such as sewage treatment processing, waste processing, and green waste. BioCNG is also known as biomethane, which is produced by fermenting biomass into biogas, then purified and converted into grid quality gas.
  • How is BioCNG Produced? The production of BioCNG involves the breakdown of organic waste materials such as animal waste, food waste, and industrial sludge to produce biogas and digestate. This process is carried out in a sealed, oxygen-free tank, also known as an anaerobic digester. The biogas is then processed to get 95% pure methane gas. The process residue is a high-quality concentrated liquid fertilizer.
  • Steps in BioCNG Production: The production of BioCNG generally involves four steps:
    1. Extraction: Natural anaerobic decomposition of waste or biomass sources, such as agricultural residue, cow dung, sugarcane press mud, municipal solid waste, sewage treatment plant waste, etc., produces biogas. Methane (CH4), carbon dioxide (CO2), and hydrogen sulfide are all components of biogas.
    2. Desulfurization: If the hydrogen sulfide content in the biogas is greater than 1,500 ppm, the biogas is desulfurized.
    3. Upgrading: The desulfurized biogas is then upgraded to increase its methane content from 55-65% to 92-98%.
    4. Compression: The upgraded biogas is compressed and packaged in a cylinder to produce BioCNG.
  • BioCNG Properties: BioCNG contains about 92 to 98% methane and 2-3% carbon dioxide, which is a higher methane content compared to normal biogas that has about 55 to 65% methane. This increased methane content results in higher energy efficiency. BioCNG produces 52000 kilojoules (kJ) per kg, which is 167% higher than that of biogas.
  • Uses of BioCNG: BioCNG can be used directly or mixed with natural gas to produce a blended vehicle fuel. It is particularly suitable for passenger cars, light commercial vehicles, light trucks, and buses. It can also be used for power generation due to its high calorific value.

Benefits of BioCNG

  • High Calorific Value: BioCNG offers a high calorific value, making it an efficient fuel source for various applications.
  • Clean Fuel: As a clean fuel, BioCNG helps control air pollution by significantly reducing emissions such as carbon monoxide (70-90%), non-methane organic gas (50-75%), nitrogen oxides (75-95%), and carbon dioxide (20-30%).
  • No Residue Production: BioCNG combustion does not produce any residue, contributing to a cleaner environment.
  • Economical: It is cost-effective compared to conventional fuels, with production costs ranging from $0.65 to $1.15 per gallon of gasoline equivalent (GGE), and it qualifies for federal Renewable Fuel Credits (RINs).
  • Safety: BioCNG vehicles are very safe and so is filling them up with biogas. In fact, it’s safer than filling up with traditional fuels. BioCNG is less likely to catch fire, it’s lighter than air, and it evaporates when released.
  • Reduces Dependency on Fossil Fuels: BioCNG reduces the burden on forests and fossil fuels, providing a sustainable alternative energy source.
  • Convenient Ignition Temperature: It has a convenient ignition temperature, making it easy to burn and use in various applications.
  • Similar to Natural Gas: BioCNG is similar to natural gas in terms of composition and properties, allowing it to be used interchangeably in many applications.
  • Waste Management: It can help avoid problems associated with solid waste being dumped in landfills by utilizing organic waste to produce energy.
  • Reduction in Greenhouse Gases: Vehicles running on BioCNG can reduce CO2 emissions by 78% compared to petrol or diesel, contributing to the fight against climate change.

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Current State of BioCNG in India

  • Production and Consumption: India is currently experiencing a significant rise in energy demand, with the demand for oil and gas anticipated to triple by 2050. BioCNG, derived from organic waste, is being promoted as a renewable energy source to meet this demand. About 46% of the CNG used in India is presently imported, and the government aims to reduce this dependency through the production and consumption of BioCNG.
  • Government Initiatives: The Indian government has rolled out several initiatives to promote BioCNG. The Union Budget 2023-24 allocated INR 35,000 crore towards energy transition, including the installation of 500 new ‘waste to wealth’ CBG plants. The government has also introduced a 5% CBG mandate and exempted excise duty on CBG. The Sustainable Alternative Towards Affordable Transportation (SATAT) scheme aims to set up 5,000 bio-CNG plants.
  • BioCNG Plants: Several states in India have started producing BioCNG. Gujarat leads with 12 bio-CNG plants, followed by Punjab and Maharashtra. The Kaira District Co-operative Milk Producers Union Limited, popularly known as Amul Dairy, has also implemented successful BioCNG projects.
  • Economic Aspects: The Ministry of New and Renewable Energy (MNRE) estimates that India has a BioCNG production potential of approximately 62 million metric tons. The production of BioCNG aligns with the demand in the market, making it economically viable. The production costs are offset by the potential for renewable fuel credits.

Challenges and Opportunities

Challenges

  • Lack of Sufficient Feedstock: There is a shortage of suitable feedstock for biogas production, such as agricultural waste and sewage, which limits the potential for BioCNG production.
  • Limited Technology and Infrastructure: There is a limited number of biogas plants and the technology used in these plants often makes it difficult to achieve large-scale BioCNG production.
  • High Costs: The cost of building and operating biogas plants is relatively high, which can deter potential investors.
  • Distribution Challenges: There are challenges related to the distribution of BioCNG, including the need for a robust infrastructure for storage and transportation.
  • Inadequate Research: There is a lack of comprehensive research on BioCNG, which hinders its widespread adoption.
  • Regulatory Challenges: Currently, there is no single ministry that regulates and deals in the BioCNG sector, which can lead to policy inconsistencies and implementation issues.

Opportunities

  • Promoting Awareness: There is an opportunity to promote awareness of BioCNG as a cleaner and more sustainable alternative to fossil fuels, which can encourage more people to adopt it.
  • Learning from Global Examples: Countries such as Germany, Italy, UK, France, and Switzerland are promoting biogas usage through supportive legal frameworks, providing models that can be emulated.
  • Creating an Enabling Environment: There is potential to create an enabling environment by reducing barriers, promoting market-driven development, forming bankable offtake arrangements, and balancing risks for the public and private sectors.
  • Establishing Partnerships: There is an opportunity to establish and promote partnerships through well-defined public-private partnership (PPP) models.
  • Government Support: The Government of India has strong policy support for the BioCNG sector, including the Biofuels Policy, 2018 and the Sustainable Alternative Towards Affordable Transport (SATAT) Scheme.
  • Investment Mobilization: The BioCNG sector has the potential to attract significant investment, with programs aiming to mobilize an investment of USD 10 million towards BioCNG projects.
  • Carbon Credits: There is an opportunity to implement a formal mechanism to avail carbon credits generated using BioCNG units, which can provide additional financial incentives.

Environmental and Economic Implications for India

  • Reduction in Fossil Fuel Imports: India imports about 50% of its compressed natural gas (CNG) needs. The government aims to use bio-CNG to reduce these imports and utilize most of the biomass waste generated in the country. Bio-CNG engines’ carbon emissions are 40% lower than those of natural gas, contributing to a reduction in carbon dioxide emissions.
  • Economic Benefits: Bio-CNG is economical as it can be produced locally from waste materials. This can help in saving transportation and storage costs, creating local jobs, and income opportunities. Bio-CNG can also reduce the energy import bill, as India imports about 85% of its crude oil requirement.
  • Climate Change Mitigation: The emission of greenhouse gases from vehicles accounts for about 27% of air pollution. Bio-CNG can help curb climate change by reducing these emissions.
  • Lower Greenhouse Gas Emissions: The greenhouse gas emissions of bio-CNG along its value chain (i.e., generation to utilization) are lower than other fuel options.
  • Job Creation: Transitioning to biogas can contribute to job creation for semi-skilled and skilled labor, providing rural employment, and boosting local economies.
  • Waste Management: Bio-CNG production facilities present a range of significant benefits, including efficient waste management. India’s abundance of organic waste resources provides a reliable and sustainable supply for bio-CNG production.
  • Environmental Sustainability: Bio-CNG significantly reduces greenhouse gas emissions compared to fossil fuels, contributing to environmental sustainability. It also improves air quality.
  • Energy Security: Bio-CNG replaces fossil fuels, reducing dependence on imported energy sources and enhancing energy security.
  • Bio-Fertilizers: Bio-CNG can also generate bio-fertilizers, which can improve soil quality and crop yield. Bio-fertilizers are organic fertilizers that contain beneficial microorganisms, such as bacteria, fungi, and algae, that enhance the nutrient availability and uptake by plants.
  • Carbon Credits: Bio-CNG projects are eligible for carbon credits, which can provide additional financial incentives for the development of these projects.

Government Policies and Schemes

Policies

  • CBG Blending Obligation (CBO): The government announced a phased mandatory blending of Compressed Bio-Gas (CBG) in Compressed Natural Gas (CNG). The blending obligation will be voluntary till FY 2024-2025 and then become mandatory, with targets set for subsequent years.

Schemes

  • Galvanizing Organic Bio-Agro Resources Dhan (GOBARdhan):
    • The GOBARdhan scheme is an umbrella initiative of the Government of India that aims to convert waste to wealth by promoting the use of cattle and agricultural waste for the production of BioCNG.
    • The scheme is being implemented in collaboration with state governments, the private sector, entrepreneurs, and societies.
    • The Department of Drinking Water and Sanitation (DDWS), Ministry of Jal Shakti, is the nodal department for GOBARdhan and has developed a portal for the initiative.
    • The scheme aligns with the nation’s endeavors to achieve the Sustainable Development Goals (SDGs), contributes to the circular economy, and supports the Government of India’s Mission LiFE.
    • The GOBARdhan initiative has been conceived to make a substantial contribution to India’s climate goals, particularly the goal of achieving net-zero emissions by 2070.
  • Sustainable Alternative Towards Affordable Transportation (SATAT):  Launched in October 2018, this scheme encourages entrepreneurs to set up CBG plants and supply CBG to Oil Marketing Companies (OMCs) for sale as green transport fuel. The scheme aims to establish 5000 Bio-CNG plants across the country by 2023-24.
  • National Bioenergy Programme: The Ministry of New and Renewable Energy (MNRE), Government of India, has notified the National Bioenergy Programme. This programme supports the setting up of small and large biogas generation plants for corresponding power generation capacity range. The programme has been approved with a budget outlay of Rs. 858 crore, which includes Rs. 100 Crore for the Biogas Programme.
  • Union CBG (Compressed Bio Gas) Scheme: Offered by Union Bank of India, this scheme provides financial assistance for setting up of Compressed Bio-Gas (CBG) plants under the SATAT scheme.
  • Biogas based Distributed/Grid Power Generation Programme (BPGP): This programme by the Ministry of New and Renewable Energy (MNRE) provides information on eligibility criteria, procedure for availing incentives, subsidy, pattern of releases, quality and content of reports of the schemes.
  • Waste to Energy (WTE) Programme: This programme supports the setting up of plants for generation of BioCNG from urban, industrial, and agricultural waste by providing central financial assistance (CFA). The programme has a budget outlay of Rs 600 crore for the period FY 2021-22 to FY 2025-26.

Financial Assistance

  • Central Financial Assistance (CFA): The Ministry of New and Renewable Energy (MNRE) has notified CFA of 4 crores per 4,800kg of CBG per day generated from 12,000 cubic meters of biogas per day, with a maximum of Rs.10 crore per project.
  • Priority Sector Lending: Bio-CNG has been included in the list of priority sector lending by the Reserve Bank of India, which can help in attracting investment for these bioenergy plants.

Regulatory Measures

  • Bioenergy Programme Guidelines: Under new guidelines of the programme for the period of 2021-22 to 2025-26, Central Financial Assistance shall be made available to projects for setting up of large Biogas, BioCNG and Power plants.
  • Bio-CNG Blending Mandates: The National Biofuels Coordination Committee (NBCC) announced the introduction of phase-wise mandatory blending of biomethane in compressed natural gas (CNG) from FY 2025-26 onwards.

Other Measures

  • Training Centers: Eight Biogas Development and Training Centers (BDTCs) have been established at India’s premier Institutions to provide technical assistance and training for the development of Bio-CNG.

Way Forward

  • Infrastructure Development: There is a need to develop infrastructure for injecting CBG into the existing gas grid, including compression and transportation facilities. The government has also been urged to build robust gas pipeline infrastructure.
  • Carbon Credits: Bio-CNG projects are eligible for carbon credits, which can provide additional financial incentives for the development of these projects. A formal mechanism to avail carbon credits generated using Bio-CNG units should be implemented.
  • Research and Development: More research and development is needed on technologies for Bio-CNG production to make it more economically viable.
  • Supply Chain Enhancement: The government has been urged to prioritize initiatives that enhance the supply chain for Bio-CNG.
  • Interest Rates: Attractive interest rates need to be announced to augment the development of bioenergy plants.
  • Corporate Social Responsibility: The government needs to motivate industries to channelize their corporate social responsibility towards the development of Bio-CNG plants.

Case Studies

  • Ranebennur Taluk, Karnataka: A case study was conducted to evaluate the performance of bio-CNG in Ranebennur taluk, Haveri District of Karnataka. The study highlighted the potential of bio-CNG in contributing to the economy of India.
  • Indore Bio-CNG Plant: The Indore Municipal Corporation operates a bio-CNG plant that fuels the city’s buses. This plant is considered a successful example of bio-CNG production and utilization.
  • Bengaluru, India: The Global Green Growth Institute (GGGI) conducted a study in 2018 in three municipalities of Bhopal, Ghaziabad, and Bengaluru to understand the solutions around organic wet waste management. The study identified bio-CNG as the most promising option for managing organic wet waste in municipalities.
  • Indian Sugar Mills: Indian sugar mills play a significant role in the transition to cleaner fuel by producing bio-CNG from waste. There is a standalone bio-CNG plant in Pune that uses municipal waste to produce bio-CNG.
  • Primove Engineering Private Limited: This company operates India’s first bio-CNG plant, which generates CNG using agricultural waste.
  • Indore’s Gobar Dhan Plant: The Gobar Dhan plant in Indore operates 400 city buses and 1,500 small vehicles on bio-CNG every day. This plant is part of the government of India’s Gobardhan Waste to Wealth scheme under the Swachh Bharat mission 2.0.
  • VERBIO India: VERBIO India operates India’s largest bio-CNG plant, which is also the largest of its kind in Asia. The plant processes up to 100,000 tonnes of agricultural residues per year.

Conclusion

BioCNG in India represents a promising avenue for sustainable energy production, offering environmental and economic benefits such as reduced greenhouse gas emissions, decreased reliance on fossil fuel imports, and local job creation. While challenges in feedstock availability, technology, and infrastructure persist, government initiatives and schemes are actively promoting its adoption. Successful case studies demonstrate BioCNG’s potential to contribute significantly to India’s energy security and environmental goals.

Practice Question

Discuss the potential of BioCNG as a sustainable energy source in India, considering its environmental, economic implications, and the challenges it faces. (250 words)

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