Amul, following the success of its BioCNG pilot project at Banas Dairy, Gujarat, has announced plans to establish four additional BioCNG plants in Banaskantha with a substantial investment of ₹230 crore. Jayen Mehta, Managing Director of Gujarat Cooperative Milk Marketing Federation (GCMMF), revealed the expansion initiative, emphasizing the alignment with the government’s cleaner fuel agenda and the drive to reduce dependence on imported fossil fuels.
BioCNG, an advanced derivative of biogas produced from organic sources like animal manure and food waste, has gained prominence in India’s rural landscape. Amul’s strategic move coincides with the government’s recent mandate, announced on November 25, enforcing the blending of Compressed Bio-Gas (CBG) in both transportation fuel (CNG) and domestic cooking fuel (PNG) segments within the City Gas Distribution (CGD) Sector.
The CBG Blending Obligation (CBO) aims to boost the production and consumption of Compressed Bio-Gas, contributing to reduced Liquefied Natural Gas (LNG) imports, foreign exchange savings, and promoting a circular economy while working towards achieving net-zero emissions. The CBO will be voluntary until FY25, with mandatory blending obligations commencing from FY26, gradually reaching 5% by 2028-29.
While hailed as a positive step, industry insiders highlight challenges that need to be addressed for smooth project operations. The lack of an organized waste collection and disposal system stands out as a pressing concern, necessitating the creation of a structured waste management infrastructure.
Blending challenges are also on the forefront, with few project developers and technology availability posing obstacles. Long-term assurance of feedstock and the type of biomass procurement become critical factors for project success. Gaurav Kedia, Chairman of the Indian Biogas Association, acknowledges the challenges and stresses the need for infrastructure improvement, especially on the supply side, where the current capacity falls below one percent.
Infrastructure emerges as a key aspect, requiring substantial funding and awareness campaigns to involve bankers and institutions. The government’s measures, as communicated by Rameswar Teli, Minister of State in the Ministry of Petroleum & Natural Gas, include financial incentives, research and development support, and policy guidelines for effective project implementation. However, financial issues between the Centre and States, potential technical challenges, and the need for pricing adjustments post-blending pose additional hurdles.
Despite the challenges, the government’s push towards a greener fuel economy, coupled with Amul’s substantial investment, signals a positive trajectory for the BioCNG sector. An entire ecosystem, encompassing waste management infrastructure, funding support, and pricing strategies, must be developed to ensure the success of these initiatives.