Clean Energy Revolution: India Mandates Bio-Gas Blending for CNG and PNG

India’s roadmap to a greener future is being significantly advanced through the mandate for bio-gas blending, an initiative that propels sustainable energy practices. Here’s a detailed overview of this development:

Background and Implementation

  • Announcement and Scheme: Finance Minister Nirmala Sitharaman announced the establishment of 500 new ‘waste to wealth’ plants under the Galvanizing Organic Bio-Agro Resources Dhan scheme (GOBARdhan) in the Union Budget 2023, presented on February 1, 2023. This includes 200 compressed biogas (CBG) plants and 300 community or cluster-based plants, with a total investment of Rs 10,000 crore​​.
  • Expansion of GOBARdhan Scheme: The new GOBARdhan scheme is an upgraded version of the one launched in 2018. The initial scheme was more limited, focusing on community-level biogas plants​​.

Financial and Policy Support

  • Mandate for CBG Blending: A 5% CBG mandate will be introduced for all organizations marketing natural and biogas. Additionally, fiscal support will be provided for biomass collection and distribution of biomanure​​.
  • Investment Encouragement: The decision aims to encourage an investment of around Rs. 37,500 crores and facilitate the establishment of 750 CBG projects by 2028-29​​.
  • Tax Exemption: To avoid cascading taxes on blended compressed natural gas, excise duty on GST-paid compressed biogas contained in it will be exempted​​.

Objectives and Benefits

  • Reducing LNG Imports: The primary objective is to stimulate demand for CBG, which will help reduce imports of costly Liquefied Natural Gas (LNG) and save foreign exchange. This is also in line with achieving net-zero emission targets​​.
  • CBG Utilization: CBG, being different from biogas in terms of utilization and constituents, will play a crucial role in renewable fuel, especially in the vehicle sector​​.

Blending Obligations and Phases

  • Phased Implementation: CBG blending obligation will be voluntary until the financial year 2024-2025 and will become mandatory from 2025-26. The blending obligations are set at 1%, 3%, and 4% of total CNG/PNG consumption for FY 2025-26, 2026-27, and 2027-28, respectively, reaching 5% from 2028-29 onwards​​.
  • Monitoring: A Central Repository Body (CRB) will monitor and implement the blending mandate based on operational guidelines approved by the Minister for Petroleum and Natural Gas​​.

Additional Initiatives and Future Plans

  • Promotion of Ethanol Production: Discussions were held to promote the production of ethanol from maize, with efforts to develop high starch yielding varieties and improve the quality of maize Dried Distillers Grain Solids (DDGS)​​.
  • Sustainable Aviation Fuel (SAF) Targets: Indicative blending percentage targets for Sustainable Aviation Fuel in aviation turbine fuel were set, starting with 1% in 2027 and increasing to 2% in 2028​​.

This comprehensive approach, encompassing investment, policy support, and phased implementation, demonstrates India’s commitment to sustainable energy and its efforts towards a greener future. The initiative is expected to have significant positive impacts on the environment, economy, and energy security of the country.



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