Current status of Bioenergy Generation in India

Introduction

India is the third-largest energy consumer in the world. Every year, the demand for fuel increases due to a rise in population, industrial growth, and transportation. To fulfil this growing demand, the country heavily relies on importing fossil fuels such as petroleum and natural gas. This not only causes pollution and raises energy security concerns but also makes energy more expensive. Due to these issues, India is looking to reduce its dependence on fossil fuels by increasing the use of cleaner and renewable energy sources. Compressed Biogas (CBG) has emerged as a biofuel in recent years. CBG is produced from organic matter that is broken down by microorganisms. This process produces a gas known as biogas, which is then purified and compressed to make CBG. CBG is a substitute for Compressed Natural Gas (CNG) and can be used as a fuel for vehicles and industrial applications. To promote the production and adoption of Compressed Biogas, the Government of India has launched several initiatives. However, these plans have not been able to deliver benefits as quickly as anticipated. Some Compressed Biogas projects are still in the planning stage, while others are facing implementation issues. These issues are due to a lack of raw materials, shortages of funds, and long delays in obtaining approvals. This report tries to analyze and determine where India stands with respect to biofuels, particularly Compressed Biogas. It also provides insight into what the Government is currently doing to address the factors preventing more Compressed Biogas from entering the market and how its production can be ramped up in the years ahead (International Energy Agency, 2024; Ministry of Petroleum and Natural Gas, 2023).

Government Policies for Biofuels at the National Level

Government of India has taken many initiatives for the creation of production & consumption of Biofuel, particularly Compressed Biogas. These projects are expected to reduce dependence on fossil fuels produced outside while increasing alternative energy sources, including waste disposal. One such major scheme is the SATAT (Sustainable Alternative towards Affordable Transportation), promoted by the Ministry of Petroleum and Natural Gas. The overall purpose of this plan is to explore incentives for the private sector and entrepreneurs to construct CBG plants to supply the gas to current CNG stations. The government hopes that a steady market will bring more investment into CBG. Similarly, the National Bioenergy Programme is another major initiative launched by the Ministry of New and Renewable Energy (MNRE). The government said it wanted to ramp up the domestic production of bioenergy with this programme. It had several major objectives that include supplying 15 million metric tonnes of CBG derived from approximately 5000 plants annually by 2030. India too had done a lot to promote biofuels at the global level. During the G20 Summit 2023, the country announced a Global Biofuel Alliance with partner countries and global bodies. There are primarily two goals for such an alliance—to achieve greater global deployment of biofuels and create clean energy jobs and livelihoods, and secondly, to maximise synergies across nations working in this space. (Ministry of Petroleum and Natural Gas, 2023; Ministry of New and Renewable Energy, 2022)

Both the central and state governments have also launched different forms of financial support to promote investments. These include subsidies on capital, tax exemptions, low-interest loans and other inducements to establish CBG plants. These steps are aimed at reducing the cost burden on investors, making biofuel projects more attractive.

Current Status of CBG Projects in India

Despite a slew of schemes introduced by the government to promote CBG, the outcome on the ground has not been up to the mark. While it plans to operate 5,000 CBG plants by the year 2030, by July 2024 only around 97 were functioning. There is no doubt that the sector has expanded, but not at even half the rate originally thought possible. The GOBARDHAN portal, too, reflects this in its numbers. There were a total of 677 registered CBG projects, of which 408 had yet to begin construction on site, and 172 were still under construction. Out of these, only 97 plants were operational. However, when examining the numbers, some projects indeed end up in limbo even before their full implementation. There are many reasons for this, including three major types of delays. Starting a CBG plant requires significant investment, and many developers need time to arrange the required funds. The approval process is also slow, involving clearances from different departments. Moreover, maintaining a steady supply of raw materials, including crop residue, animal waste, and organic waste, is not an easy task. Technical and operational issues can also affect the plant even after it is up and running (Department of Drinking Water and Sanitation, 2024).

Then again, the situation needs to be examined separately across different states. Among the states, the highest share of registered CBG projects is in Uttar Pradesh, followed by Maharashtra, Punjab, Haryana, and Madhya Pradesh. However, in terms of the number of plants in operation, Gujarat leads the country, followed by Uttar Pradesh and Haryana. This means that registering a project is only half the equation. Completing and operating the project is equally important. Most importantly, these states have developed dedicated bioenergy policies. This highlights the significant role of effective policy support at the state level. Strong investor confidence and timely approvals also help ensure that projects are completed on schedule. CBG is still in its nascent stage, although India started on a promising note. With only 2–3 plants becoming operational at a time, the ambitious target of reaching 5,000 CBG plants by the year 2030 is unlikely to be achieved. The next major step for the sector will be resolving its financial, approval, and feedstock sourcing challenges.

State-Level Bioenergy Policies in India

CBG projects in India can become successful only if both the Centre and the States implement effective policies. The Centre has introduced several biofuel programmes, but the states have adopted different approaches towards them. While several states have started to incentivize CBG production, CBG projects are being promoted in states such as Uttar Pradesh, Gujarat, Haryana, and Bihar through separate bioenergy policies. These policies also provide support in the form of financial grants, tax exemptions or reductions (for up to 15 years), ease of land acquisition, and relaxed administrative approvals depending on the respective region's needs. Because of this support, these states have received significantly more investment for the development of CBG plants (NITI Aayog, 2023). In contrast, some states, such as Karnataka and Maharashtra, include biogas as part of their renewable energy policies, but most of the focus is on electricity generation from biogas rather than the development of CBG as a transport fuel. As a result, CBG projects in these states, or those relying on waste biomass as feedstock, tend to progress at a slower pace. To sum up, state governments play a critical role in the growth of the CBG sector. While central government schemes can provide direction, much depends on their successful implementation at the state level. With the introduction of practical and well-planned bioenergy policies across all states, India will be in a stronger position to achieve its biofuel targets in the coming years.

Major Challenges Facing the CBG Sector in India

But as much as this sector has significant potential in India, it faces many challenges that continue to hinder its growth. An effective implementation blueprint would probably have helped, but a record number of these government-supported projects (Department of Drinking Water and Sanitation, 2024) have not even started.

One of the biggest challenges in CBG production is the unavailability of adequate raw material, or feedstock, from which CBG can be produced. Most plants rely on crop residue, cattle dung, municipal solid waste, or other organic waste. However, ensuring a long-term and consistent supply of these materials is not an easy task. This is largely because there are not enough harvesting machines in producing areas, and many farmers lack proper storage and transportation facilities. Maintaining a continuous supply of feedstock, therefore, remains a major challenge for plant owners.

Environmental issues and waste segregation also create difficulties. Municipal solid waste treatment requires CBG plants to process wet and dry waste separately. Although waste segregation has been promoted for several years, effective implementation is seen only in parts of cities and towns. In many cases, households segregate their waste, but it gets mixed again during collection and transportation, reducing the quality of the raw material and, consequently, the quality of the CBG produced. Feedstock pricing is another concern. One example is press mud, a by-product of sugar processing. For many years, it was available at very low cost, but its price has increased significantly as industries have found greater commercial use for it. This has increased the operating cost of CBG plants and reduced their profitability.

Selling the gas that has been produced is also not an easy task. Most CBG plants are located in rural areas where the demand for CNG is relatively low. The sale of Fermented Organic Manure (FOM), a by-product generated during biogas production, is another challenge because it lacks an established market. FOM is still not widely known, and only a limited number of farmers are aware of its benefits as an organic fertilizer for crop management. As a result, many plant operators struggle to sell it and sometimes even distribute it free of cost. This eliminates an important source of revenue for the plants. Likewise, establishing a CBG plant is not an overnight process. Developers often wait for months, or even years, to obtain approvals from various government departments. This increases project costs and discourages new investment in the sector. Another challenge is the shortage of skilled manpower required to operate CBG plants. Since the sector is still developing in India, there is only a limited workforce with the necessary technical expertise. This calls for proper training programmes and continuous technical support to ensure sustainable growth of the sector. To sum up, these challenges show that developing the CBG sector involves much more than simply producing biogas. Equal attention must be given to feedstock management, waste collection, infrastructure development, marketing, faster project approvals, and skill development. Addressing these issues is essential for the faster growth of the CBG industry and will significantly contribute to achieving India's clean energy targets in the oil and gas sector.

Future Perspective or What should be done?

Other than targets, India has good potential to become a CBG power producer — but that will require much more. Now we can address the operational bottlenecks that are preventing scale. Successful accomplishment of these tasks would enable a greater number of CBG plants to commence operations and integrate into the nation, charting the course towards meeting clean energy targets. (International Renewable Energy Agency, 2023) Feedstock is the priority. Encourage farmers to connect with buyers via Farmer Producer Organisations (FPOs) and Self-Help Groups (SHGs). This will not only secure a continuous supply of feedstock for plant owners but also open another source of income for farmers. Keep a resource person following near collection and storage custom centres. At the same time, this can no longer be done without technology-induced efficient use of state resources. Areas rich in biomass resources can be identified from regularly mapping crop residue and other forms of biomass resources using satellites. This would allow investors to decide the most effective places to site new CBG plants if this information were published and updated on an as-needed basis.

Infrastructure is another important component. Due to the distance from CNG or PNG pipeline networks, this gas produced by these plants could not be sold. The continued expansion and funding of pipeline tie-ins for these networks would almost completely remove the barriers to CBG dissemination. If CNG-fuelled vehicles are promoted, especially in rural areas, this demand for CBG would also increase.

In addition, Fermented Organic Manure (FOM) is vital organic manure which is generated as a by-product from CBG plants, and it requires more attention. But till now, many farmers are unaware of how it is helpful as organic fertilizer. Many awareness programmes, demonstrations and assistance from agricultural institutions are essential for acceptance. This will not only provide an orderly market for FOM but also provide a second source of income for plant owners. The approval process is one of the things which need to be improved. Right now, the process of receiving all the needed approvals is pretty lengthy. Single window clearance, wherein all the approvals are processed through a single platform, will not only save time but also ease of doing business for investors looking at any new projects. Finally, CBG plants need skilled human resources, so it would be a market itself too. This industry can also be developed if a training programme could prepare an expert workforce. Likewise, easing access to carbon credit schemes and other financial incentives literature for plant owners can motivate the long-term sustainability of these projects. More specifically, India has both resource and policy backing to push the frontiers in the CBG sector. The task that needs to be done now is to enforce better measures. If properly applied, CBG can help to avoid the unfeasibility of fossil fuel dependence and waste issues while facilitating better sustainability in the coming years.

References:

1. International Energy Agency. (2024). India Energy Outlook 2024.

2. Ministry of Petroleum and Natural Gas. (2023). Sustainable Alternative Towards Affordable Transportation (SATAT) Initiative.

3. Ministry of New and Renewable Energy. (2022). National Bioenergy Programme Guidelines.

4. Department of Drinking Water and Sanitation. (2024). Gobardhan Portal Dashboard and Progress Reports.

5. NITI Aayog. (2023). Biofuels in India: Roadmap for Sustainable Development.

6. International Renewable Energy Agency. (2023). Renewable Energy Statistics 2023.

7. G20. (2023). Leaders' Declaration: Global Biofuel Alliance.

8. Food and Agriculture Organization of the United Nations. (2023). Bioenergy and Sustainable Development.

9. World Bank. (2023). India Country Climate and Development Report.

10. IEA Bioenergy. (2023). Biogas and Biomethane: Opportunities for India.

Disclaimer: The views expressed in this article are solely those of the author and do not necessarily represent the views, policies, or positions of the organisation.