India falls behind on biogas production plans

India is far behind in its plans to set up 5,000 compressed biogas (CBG) production plants, with only two so far operational and foundation stones laid for five others. The delay in replacing transport fuels with cleaner biogas imperils the country's energy security and makes it more dependent on imported crude.

Five plants are coming up in Gujarat, Uttar Pradesh and Punjab that will use agricultural residues — currently being burnt by farmers, raising pollution levels — cattle dung and municipal solid waste. Two CBG plants in Hyderabad and Punjab are operational, with state-run refiners opening CBG retail outlets in Hyderabad and Ludhiana in Punjab.

India's Satat scheme, launched in October 2018, aims to set up CBG plants with a production target of 15mn t by 2023. But the government will miss the target by a mile, as it is impossible to add 4,998 plants in two years when it has taken nearly 2½ years to commission two projects.

"The CBG programme under Satat has gained momentum but growth has to be exponential, not incremental," said oil minister Dharmendra Pradhan at an event launching the CBG plants. The government via state-controlled refiner IOC has signed initial agreements with companies including JBM, Adani Gas, Torrent Gas and Petronet LNG for 1,500 CBG plants in an effort to cut India's dependency of around 85pc on imported crude and over 50pc on imported LNG.

Pradhan claims there is a large potential to harness usable hydrogen from CBG. The government has allowed CBG to be shipped via natural gas pipelines to industrial consumers. The fuel will also substitute compressed natural gas (CNG) and auto LPG at retail outlets.

India's Covid-19 battle and resulting lockdowns have crippled economic activity since March 2020, with the ongoing second wave of the pandemic leading to record cases and casualties. The economy shrank by 7.3pc in the 2020-21 fiscal year ending in March, with growth expected to rebound by a little over 9pc this fiscal year, according to Moody's Investors Service, revising its forecasts downward from 13.7pc.

Ethanol blending with gasoline was 8.2pc in April at 247mn litres and 7.4pc in the December 2020-April 2021 period at 1.3bn l, according to the oil ministry. This compares with 5pc blending, or 1.73bn l, over the entire December 2019-November 2020 ethanol supply year.

India's gross gas production reached 2.65bn m³ in April, steady from March but up from 2.16bn m³ a year earlier.

Total gas consumption of 5.24bn m³ in April fell from 5.58bn m³ in March but rose from 3.9bn m³ a year earlier.