One step closer to mandatory CBG blending
Despite industry concerns about investment costs, the oil ministry has finalised a proposal to roll out mandatory Compressed Biogas (CBG) blending with CNG and piped gas for homes.
On February 27 (2024), oil ministry deputy secretary Anand Kumar Jha issued a single-page office memo, which passed into law recommendations from the National Biofuel Coordination Committee on November 24 (2023). Oil minister Hardeep Puri chairs the committee, which recommended that the oil ministry's Petroleum Planning & Analysis Cell (PPAC) act as a Central Repository Body (CRB) to lay down CBG blending guidelines, subject to Puri's final approval.
Jha adds that from April 1 (2024) to March 31 (2025), CBG blending is voluntary, but from 2025-26, it must be 1%, rising to 3% in 2026-27, 4% in 2027-28, and 5% from 2028-29. Gas retailers have greeted Jha's order with concern.
"Setting up a CBG plant is not cheap," says a source. "Investment costs are high; setting up a five t/d facility costs approximately Rs25cr ($3m)."
With this in mind, the new and renewable energy ministry has announced several subsidy schemes to help, ranging from Rs4cr ($482,350) for a 4.8 t/d facility to Rs10cr ($1.2m) for a 12 t/d facility. In the run-up, gas retailers are announcing CBG alliances with local civic bodies to meet the government's targets.
In 2023, Mahanagar Gas (MGL) signed an MoU with Mumbai's BMC (Brihanmumbai Municipal Corporation). BMC will provide land for a CBG plant to process 1000 t/d of food and vegetable waste.
"We plan to invest Rs500cr ($60m) and are targeting commissioning by end-2025," says an MGL source. On March 31 (2023), Uttar Pradesh-based gas retailer Central UP Gas signed an MoU with the Kanpur Municipal Corporation to convert 1200 t/d of municipal waste to generate 42,000 cm/d of CBG, 40,000 cm/d of carbon dioxide and 300 t/d of compost.
Central UP Gas has set up a JV with Dutch CBG technology provider SusBDe.