Greater Use Of Biogas Can Help India Save US$29 Billion In Import Bills

The report adds that increasing biogas projects will provide a multi-pronged environmental solution as it helps manage waste, reduce greenhouse gas (GHG) emissions and increase renewable energy production.

“Biogas can substitute natural gas or other fossil fuels with high emissions. Removing carbon dioxide (CO2) and other impurities like hydrogen sulfide can also upgrade its methane content to 90%, making it equivalent to natural gas in calorific value. This upgraded biogas, also known as biomethane, is a pipeline-ready gas and can be injected into the gas grids as a non-fossil gas,” says the report’s author Purva Jain, Energy Analyst, IEEFA.

“By undertaking the right production processes and plugging methane leakages in the production, upgradation and supply stages, biogas can offer India a cleaner alternative to its dependence on imported natural gas,” she adds.

Despite its benefits, biogas has failed to gain prominence in India. The report finds that this is because the sector lacked a comprehensive market ecosystem in terms of pricing and offtake, it did not have the right incentives and systems for obtaining clearances and permissions for setting up projects were complicated.

Most importantly, government support and financial assistance to the sector was till recently disaggregated among multiple ministries and departments. 

“The government has started fix some of these gaps. In 2021, the government bundled different types of assistance under the National Bioenergy Scheme. Moreover, the introduction of the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme as an umbrella initiative of the Government of India will help in this consolidation. It covers the entire gamut of schemes/policies promoting organic waste conversion to biogas or compressed biogas (CBG),” said Jain.

The report also highlights that recent policy initiatives, such as revising the CBG rate to reflect the increase in global gas prices and plans to include a mandate on natural gas marketing companies to 5% CBG procurement, have reignited private sector interest in CBG, including from the likes of Reliance Industries Limited and the Adani Group.

Still there is more to do on the government’s part if biogas is to reach its full potential in India.

“The government is showing clear intent to develop the biogas sector but it needs to do more. It needs to encourage increased investments and private participation in the sector. It can increase the market viability of CBG and biogas slurry, ensure increased financial access for developing biogas plants and encourage feedstock mapping to ensure the availability of inputs,” says Jain.

This will also help in ensuring that there is no use of energy crops for biogas as that can lead to indirect land use changes as seen in case of ethanol and biodiesel in Brazil  which can have catastrophic impact on climate and environment through increased carbon emissions.

“A key step will be to ensure guaranteed offtake of CBG by different natural gas-using industries to expedite meeting decarbonization goals. Introducing take-or-pay arrangements will be an important step in this direction,” she adds.