ArticleEvonik India Subcontinent

Compressed Biogas, an alternative fuel, & a promising investment opportunity By Mr. Vinod Paremal, Regional President, Evonik India Subcontinent

India’s energy demand is on a rise and seen at close to three times of the global average. The expanding economy, industrialisation, urbanisation, change in life patterns and population growth has put India on frontline in terms of its energy requirement.

Today, it is world’s third largest energy consuming country and has more than doubled its energy demand since 2002 (till 2020) with around 80% of it met by coal, oil and solid biomass, as per a report by IEA (International Energy Agency).

According to IEA, the energy demand of India was expected to grow by 50% between 2019 and 2030. Though it slowed down a bit due to the COVID pandemic, it is seen closer to 35% in the STEPS* (Stated Policies Scenario) and 25% in the Delayed Recovery Scenario * by IEA.

As India steadily recovers from the impact of COVID pandemic, it is entering into a dynamic period in terms of energy development and consumption. Over the years to come, more highways are to be built, more households to be powered and more industries look at cleaner and affordable energy to function. Above all, it needs to achieve its Net Zero Mission target by 2070.

While India stands tall in the world as one of the fastest growing economies in the world and its ambitious plans of cutting down carbon footprint, it faces two major challenges in front of it. These include one how to attain energy security in uncertain times and rising crude prices, and secondly to manage waste it generates every day to reduce carbon footprint and impact on climate change.

As per the data available on GIS Based Waste Mapping Tool, Ministry of New and Renewable Energy, India generates a total of 623 million TPA of solid waste and 20,395 million cu.m. of liquid waste. These are waste predominantly generated from farms, sewages, fruit and vegetable raw and processing, distilleries, and sugarcane mills, among others. This waste has the potential to create 43, 737 TPD of bio-CNG and 9116 MW of energy generation.

The government has been proactive in this regard and has been pushing towards strengthening its renewable energy supply. Among these, compressed biogas (CBG) is a strong contender as an alternative fuel. The CBG is a highly purified biogas that has 90% methane with high calorific value. It is a perfect green renewable fuel that can be used across sectors such as automotive, power generation, infrastructure as well as for household cooking gas. The CBG produces close to 60% less emissions compared to traditional fossil fuels. Therefore, it has great potential to be adopted as a mass fuel and replace CNG and other fossil fuels.

Since farm waste including cattle dung, crop residues, vegetable and fruits raw, among others, form a significant source for biogas and later the purified CBG, the vast farm lands in India and it being a predominantly agri economy comes as a strong advantage. It is in line with this underlying potential that the government has been encouraging private entrepreneurs and start-ups to setup CBG production units and contribute to the CBG economy. It has set a target to achieve 15 MMT (million tons) CBG production by 2023 from 5000 Plants. An investment of Rs. 1.75 lakh crore is expected to arrive via these plants.

In line with this, the government under the ‘SATAT’ (Sustainable Alternative Towards Affordable Transportation) scheme on Compressed Bio Gas (CBG) 2018 has been encouraging private entrepreneurs to setup CBG plants, produce and supply CBG to OMCs for sale as automotive and industrial fuels.

Moreover, the Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN) scheme launched by Government of India in Budget 2018-19 aims at converting cattle dung and solid waste in farms into CBG and compost. This would serve three key purposes. One, it will help organise and streamline waste management, and second create additional income for farmers and lastly contribute towards building CBG ecosystem. CBG is expected to boost farmer income, enhance infrastructure developing leading to rural development, promote organic farming, and create 75,000 potential direct jobs and lakhs of indirect job opportunities in the country.

Traditionally, coal has been the lifeline for sectors such as power. Of late, the scenario has been changing with the share of coal in the overall energy mix dipping and estimated to be at 34% in 2040 as against 44% in 2019.  The National Policy on Biofuels 2018 aims to increase the usage of biofuels in energy and transportation sectors.

Moreover, the government is also working towards improving its energy mix with more dependence on cleaner and greener fuels. India aims to be a ‘gas-based economy’ wherein it looks at building gas infrastructure (including CBG) that serves multiple industries and helps in meeting air quality, and emission goals.

CBG has the potential to hold large portion in country’s energy mix in the near future and be the force behind attaining the Panchamrit – the five nectar elements presented by India at Glasgow COP-26 conference. The elements include raising non-fossil fuel-based energy capacity to 500 GW by 2030, 50% of the country’s energy requirements to be met by renewable energy sources and reduce carbon intensity of the economy to less than 45% by 2030.