FUELLING CHANGE: HOW INDIA’S CBG MANDATE IS A GAME CHANGER FOR THE AGRI-WASTE BIOMASS AND BIOFUELS INDUSTRY

India’s commitment to a sustainable energy future has taken a significant leap forward with the government mandating the blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes. This strategic move is a step towards reducing the nation’s dependence on imported fuels and fosters energy self-reliance, supporting the ‘Make in India’ initiative.

This mandate aligns seamlessly with other initiatives such as SATAT (Sustainable Alternative Towards Affordable Transportation) and the National Bio Energy Programme, forming a comprehensive and supportive ecosystem. Together, these steps will help meet India’s commitment to ‘net-zero’ carbon emissions by 2070.

The mandate to blend CBG has the potential to reshape the landscape of biomass procurement and the demand for agri-waste in the generation of biofuels. Annually, India generates approximately 500 million tonnes of agricultural residue, presenting a significant business opportunity estimated at around Rs 50,000 crore. Of this, nearly 200 million tonnes are left unused and often burned, emphasising the untapped potential for biofuel conversion.

Biofuels Junction’s current production and sales volume of over 15,000 tons of biomass fuel per month positions the company as a key player in this market. With this evolving framework, Biofuels Junction is poised to play a significant role in driving the industry’s sustainable growth.

1. Phased Implementation Strategy:

The phased implementation strategy is a key element in the success of the CBG mandate. By initiating the process with voluntary blending and gradually scaling up to a 5% target over the next several years, the government is providing stakeholders with the necessary time to adapt. CBG blending obligation, which will be voluntary in the fiscal year 2024-2025, will become mandatory from the fiscal year 2025-2026 onwards, starting at 2.5% and gradually increasing to 5% by the fiscal year 2028-2029.

This gradual progression minimizes disruptions, allowing businesses to invest in infrastructure, upgrade technologies, and train personnel at a manageable pace. This approach recognizes the complexity of transitioning an entire industry and mitigates potential challenges that may arise from a rapid, large-scale shift.

The time and flexibility afforded by the phased implementation strategy are essential for the successful adoption of CBG technology. This technology represents a significant advancement in biofuel production, offering a cleaner and more sustainable alternative. With the mandate in place, businesses can now plan for the future with confidence, knowing that the government is committed to supporting the transition and providing the necessary runway for adaptation.

2. Net-Zero Emissions Goal:

The mandate’s alignment with the goal of achieving net-zero emissions is a significant driver for the adoption of biofuels. As the industry shifts towards cleaner energy sources, the demand for sustainable alternatives like CBG produced from agri-waste biomass becomes pivotal in meeting environmental targets. The mandate serves as a catalyst for businesses to invest in technologies that contribute to a more sustainable and environment-friendly energy mix.

3. Supporting Ecosystem Initiatives:

The alignment with initiatives like SATAT and the National Bio Energy Programme creates a supportive ecosystem for the biofuels industry. This encourages collaboration between different stakeholders, including the government, private sector, and technology providers, fostering a conducive environment for growth.

In addition to its intrinsic environmental benefits, the CBG mandate dovetails with other initiatives aimed at creating a supportive ecosystem for the biofuels industry. SATAT, for instance, focuses on promoting the use of CBG in the transportation sector. This initiative complements the CBG mandate by creating a demand base for the produced biofuels, ensuring a market for businesses investing in CBG technology.

The National Bio Energy Programme further strengthens this ecosystem, fostering collaboration between government entities, the private sector, and technology providers. This collaborative approach is instrumental in overcoming challenges and driving innovation in the biofuels sector.

4. Strategic Plant Locations:

Placing biofuel production facilities near biomass feedstock sources is a strategic move that enhances efficiency and reduces transportation costs. This strategic focus on plant locations positions companies like Biofuels Junction to play a significant role in the sustainable growth of the industry by ensuring a stable and reliable supply of agri-waste biomass for biofuel production.

5. Anticipation of Rapid Technology Adoption:

With the CBG mandate in place, there is an anticipation of rapid adoption of CBG technology across the industry. This, in turn, will drive the demand for agri-waste biomass as a feedstock for biofuel CBG production. Companies that are well-positioned to meet this demand are likely to experience substantial growth and contribute to the overall success of the biofuels sector.

6. Expanding the biofuels feedstock ecosystem:

CBG with the latest technology, has enabled the usage of a variety of residues and waste as feedstock for production. From municipal waste to paddy straw, waste that was not greatly used for any other usage is accepted in CBG. CBG may greatly help solve the pollution issue in the north as paddy straw is the well-accepted and proven feedstock for CBG. Whereas paddy straw is not very suitable and hence popular as solid biofuel.

This would help accelerate the collection and processing ecosystem for Paddy straw in the north and help lower crop burning incidences. Additionally, with waste separation being made mandatory by Municipal corporations in Metro and large cities, municipal waste-based CBG plants are expected to be set up. Also, some of the mill waste such as Press Mud also prove to be a good feedstock for CBG and hence the critical issue of disposal of the same has been solved with a win-win outcome.

The CBG mandate’s impact extends beyond environmental and economic considerations. It signifies a paradigm shift in India’s energy landscape, highlighting the government’s commitment to a future powered by sustainable and renewable sources. The mandate’s success relies on the collaborative efforts of various stakeholders, and Biofuels Junction, with its IT-enabled platform, “fleet on the street” and a strong team of 45 people employed across the supply chain, strategic focus, and alignment with the supporting ecosystem, is well-positioned to be a key contributor.

Biofuels Junction has expanded its presence by developing a strong supplier network closer to the demand clusters; we have our own manufacturing facilities at a few locations however our focus is to create a partnership network and empower our partners to be part of our growth. Biofuels Junction is the front for 1200 manufacturers and suppliers of biomass and biofuels apart from its own manufacturing unit. Supplier development has been part of our core strategy of expansion.

India’s CBG mandate is a game-changer for the biofuels industry, providing a clear and comprehensive roadmap for sustainable growth. The phased implementation strategy, coupled with alignment with supportive ecosystem initiatives and strategic positioning, positions Biofuels Junction as a key player in driving the transition to cleaner and more sustainable energy sources. The mandate’s success hinges on collaboration, innovation, and a collective commitment to building a greener and more resilient energy future for India.

The demand for agri-waste biomass is set to surge, creating a ripple effect that not only addresses environmental concerns but also catalyzes economic growth and job creation in the burgeoning biofuels sector.

 

Author

Ashvin Patil
Founder and Director
Biofuels Junction Pvt Ltd.

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