New Delhi: The Indian Biogas Association (IBA) has called on the government to introduce tax holidays for compressed biogas (CBG) production in the upcoming Union Budget. The proposal aims to encourage investment in renewable energy and support India’s efforts to reduce pollution and promote sustainable development, reported The Times of India.
In a letter to Finance Minister Nirmala Sitharaman, IBA suggested a complete tax waiver for CBG producers, especially in the early years of operation. The association said this measure would help attract businesses to the sector, enabling them to scale up production and contribute to cleaner energy generation.
With approximately 100 CBG plants operational in the 2024-25 financial year, the industry generated an estimated ₹1,200 crore in sales. The association noted that a this is a short-term loss, but it will help the renewable energy industry flourish in the long run. This move will help India meet its renewable energy goals, draw in private investment, and generate new employment.
The IBA explained that such tax incentives would help CBG producers offer their products at competitive prices, encouraging wider use of biogas in the country’s energy mix. Additionally, it highlighted the environmental advantages of using agricultural residues like paddy straw and crop waste in biogas production, which would reduce harmful emissions from burning these materials.
The association suggested that the success of Haryana’s measure, where ₹1,000 is provided to each farmer per acre not to burn paddy straw, could be replicated all over. It recommended major agricultural waste-generating states like Punjab and Haryana should be prioritized first for its implementation. Uttar Pradesh and Bihar should be the other states considered for the program.
IBA also proposed grants to help cover the transportation costs of moving crop residues from farms to biogas plants. It recommended developing a framework to allow biogas producers to sell carbon credits on domestic and international platforms, creating new revenue streams while helping India meet its climate goals.
The association called for fast-tracking legislation that would enable the trading of renewable energy and carbon credits. It proposed the implementation of systems whereby industries which were over the limits set for greenhouse gas emissions would buy green certificates. In addition, it advocated for subsidies for kick-starting such a process.
Implementing such measures, IBA said, would lead to encouraging clean energy production, increasing incomes for farmers and significantly reducing emissions which would finally help in achieving India’s environmental and economic goals.
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