Limited biogenic CO2 supply is creating a project bottleneck while uncertainty hangs over the market, writes Anmol Choubey
India's potential for biogenic CO2 sourcing may be large, but e-fuel project developers currently still face major hurdles in pursuit of long-term supply at scale.
For producers of e-methanol and other hydrogen derivatives that require carbon dioxide, biogenic CO2 could be of critical importance, especially if they target offtake opportunities in Europe. The EU's rules on renewable fuels of non-biological origin (RFNBOs) effectively require use of non-industrial CO2 sources for e-fuel production outside the bloc. This limits the options to CO2 from biogenic sources or direct air capture (DAC). As the latter remains a nascent and expensive technology, the focus is firmly on biogenic CO2.
India's large agricultural sector and push for biomass and biofuel adoption could provide ample scope for widespread biogenic CO2 capture and distribution.
But for now, securing biogenic CO2 remains highly challenging, industry participants tell Argus. Commercially available supply is still very small, developers say, with one describing the lack of biogenic CO2 as a "bottleneck" for project progress. The limited availability of RFNBO-compliant CO2 has become a key constraint for proposed e-methanol projects and could present a challenge in upcoming e-methanol supply tenders, a representative from hydrogen industry body Harit Molecules Foundation says.
Even where biogenic CO2 is available, a lack of long-term certainty is complicating plans. Projects typically require feedstock certainty for 15-20 years to support financing and investment decisions, but potential biogenic CO2 suppliers are often reluctant to commit to such long-term agreements because the market remains immature and future pricing remains uncertain.
Even for now, price estimates vary considerably and depend heavily on the source, required infrastructure and additional needs for purification and liquefaction. Compressed biogas (CBG) developer GPS Renewables says biogenic CO2 could be offered at around 3,500-7,000 rupees/t ($36.59-73.18/t), depending on location and quality requirements. Capturing CO2 in ethanol could cost around $25/t, estimates Rajnish Kumar, professor at the Indian Institute of Technology Madras, but transport and distribution could add further costs.
Supply source search
The hydrogen industry is seeking more clarity on available RFNBO-compliant supply, the Harit Molecules Foundation representative says, and government bodies are taking the initiative to provide this.
The Solar Energy Corporation of India (SECI) launched a consultation earlier this month to for e-methanol and green urea production under the National Green Hydrogen Mission, partly to support the upcoming e-methanol tenders and potential exports to the EU and other markets.
SECI says studies by organisations including GIZ and CSTEP indicate significant theoretical biogenic CO2 availability across India. The current exercise is intended to validate those estimates, identify commercially viable sources and assess their proximity to likely demand centres, the body says.
As part of its assessment, SECI is mapping potential CO2 resources against export infrastructure, including Deendayal port in Gujarat and VO Chidambaranar port in Tamil Nadu. Industry participants say transportation costs and port access could influence project competitiveness as much as overall resource availability.
Sectors with biogenic CO2 capture opportunities could see major growth in the coming years. Paris-based energy watchdog the IEA said earlier this year that CBG output in India could increase sevenfold until 2030. But as more and larger e-fuels plants are bound to start operations, demand will grow too.
