India Biogas Association (IBA) seeks Rs 30,000 crore investment to help CBG industry

The Indian Biogas Association (IBA) is advocating for an investment of ₹30,000 crore to procure the necessary machinery and equipment for biomass supply to compressed biogas (CBG) plants, with the aim of reducing LNG imports by 12 MMTA.

Gaurav Kedia, Chairman of IBA, emphasized the importance of utilizing agricultural residues like paddy straw for bioenergy production and soil enrichment rather than resorting to burning, as it offers a dual benefit of providing renewable energy sources and enhancing soil health.

A Meagre Beginning Support By Government

The Centre has released the “Scheme Guidelines For Providing Financial Assistance to Compressed BioGas (CBG) Producers For Procurement Of Biomass Aggregation Machinery” to support biomass collection for initial 100 CBG plants by providing financial assistance to CBG producers for procurement of biomass aggregation machinery (BAM). The total financial outlay is kept at Rs. 564.75 crore for the period of financial year 2023-24 to FY 2026-27. This means that the total outlay is for four years.

IBA highlights the economic challenges in biomass collection, which often lead farmers to prefer burning rather than selling off field straw promptly. Gaurav Kedia pointed out at the high cost associated with the collection, storage, and transportation of low-density straw and opines that improving logistics alone is not a feasible solution.

₹30,000 Crore Sought

Gaurav Kedia stressed the need for government intervention, suggesting subsidies for combine harvesters capable of efficiently gathering straw and additional support for balers and storage units to facilitate efficient transportation and storage.

Moreover, the IBA Chairman urged the government to release operational guidelines for crop residue management, provide financial assistance for the procurement of crop residue management machinery, establish custom hiring centers, create a supply chain for crop residue and promote awareness on crop residue management.

Ashvin Patil, Director of Mumbai-based biomass supplying firm Biofuels Junction, estimated that India generates roughly 500 million tonnes of agri-residue, presenting a business opportunity of around ₹50,000 crore. However, nearly 200 million tonnes of this resource remain unused, leading to environmentally detrimental burning practices.

Gaurav Kedia also highlighted the need for machinery and equipment worth over ₹30,000 crore to address the issue in key Indian states. He says that this would ensure a smooth substrate supply for CBG plants and attract an investment of ₹170 thousand crore.

The IBA Chairman mentions that this would ultimately help eliminate 12 MMTA of LNG imports.

In addition to Production Linked Incentive (PLI) programs, Kedia stressed the necessity for more incentives to increase domestic production of essential components and reduce dependency on imports. He noted India’s overwhelming reliance on foreign imports in the biogas sector, particularly from Europe, especially Germany.