The Rs 23,731-crore GOBARdhan scheme is set to give a major push to the use of agricultural and organic biomass for energy, with the government targeting a tenfold increase in compressed biogas (CBG) production, The Hindu reported.
The scheme seeks to convert agricultural residue, animal dung, food waste and other forms of organic biomass into renewable fuel, while reducing India’s dependence on imported fossil fuels.
Launching the scheme, Petroleum and Natural Gas Minister Hardeep Singh Puri said the government would support CBG projects through capital assistance and assured offtake of the renewable gas produced from biomass.
The combined support is expected to increase CBG production from the current 0.4 million standard cubic metres per day (mmscmd) to 4-6 mmscmd.
The government estimates that the programme could replace around 10 million tonnes of fossil fuel with clean gas and help avoid more than Rs 40,000 crore in fuel imports. It could also reduce carbon dioxide emissions by more than 40 million tonnes and generate around 250 million tonnes of organic manure for farmers.
Puri said the initiative would create a new economic value for agricultural and organic waste, while helping farmers become “Annadatas to also being the Urjadatas”.
Incentives for biomass-based CBG plants
Under GOBARdhan, CBG projects will be eligible for capital assistance of up to Rs 30 crore under two capital-support components.
Greenfield plants will receive assistance of Rs 1.25 crore per tonne per day (TPD) of eligible CBG capacity. Brownfield projects will be eligible for support at 50% of the applicable greenfield rate for additional capacity created through fresh investment.
Existing biogas plants can also be upgraded to produce CBG using organic biomass. Such projects will receive assistance of Rs 0.60 crore per TPD, subject to a maximum project ceiling of Rs 5 crore.
To improve the viability of biomass-based CBG projects, the Centre will provide assured offtake of up to 100% of eligible output at an administered price of Rs 2,110 per million British thermal units (MMBtu), equivalent to around Rs 98 per kg.
The scheme is also expected to contribute to the wider expansion of natural gas in India’s energy mix. The government aims to raise the share of natural gas to 15% by 2030 from the current 6-7%.
With agricultural residue, animal dung, food waste and other organic biomass forming the feedstock base, GOBARdhan is intended to establish biomass as an important source of domestic renewable energy while creating additional value from waste.
