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Indian Biogas Association calls for fixed rate for CBG procurement

The Indian Biogas Association (IBA) is urging the government to establish a fixed procurement rate of Rs 90 per kg for biogas from oil and gas marketing companies, highlighting its environmental benefits and potential to stimulate sectoral expansion.

IBA plans to present this proposal and other recommendations aimed at advancing the biogas sector to Pralhad Joshi, the newly appointed Union Minister of New and Renewable Energy.

Gaurav Kedia, Chairman of IBA, emphasized the disparity in pricing between compressed biogas (CBG) and compressed natural gas (CNG). While CBG’s retail price matches that of CNG, its procurement price is tied to CNG’s retail selling price, currently Rs 75-80 per kg in New Delhi, leading to a CBG procurement price of Rs 59 per kg excluding GST.

Kedia argued that this pricing model fails to account for CBG’s environmental benefits, suggesting that CBG should ideally command a premium of Rs 10-15 per kg due to its green credentials, amounting to around Rs 90 per kg.

He underscored the potential of the SATAT (Sustainable Alternative Towards Affordable Transportation) initiative to reduce India’s import bill by approximately USD 15 billion, or about 10 percent, by promoting CBG as a sustainable transport fuel.

Kedia further critiqued the current discounted offtake price of CBG, linked to CNG’s retail price, as counterproductive to addressing climate change imperatives. He stressed the urgency of implementing a more rational and effective pricing mechanism to incentivize biogas producers and propel industry growth.

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