Financing for Compressed Bio-Gas Plants Will be Priority Sector Lending: Dharmendra Pradhan

The Government is in the process of including Compressed Bio-Gas under Priority Sector Lending.  Speaking at the online inauguration of the CBG Plant at Namakkal in Tamil Nadu and CBG Fuel Stations at various places in the state, the Petroleum and Natural Gas & Steel Minister Shri Dharmendra Pradhan said that this will provide ease in the financing of CBG Plants. He further added that Central Financial Assistance or Subsidy for setting up CBG plants has been extended to 2020-21 to promote new projects. Shri Pradhan said that CBG projects are viable and have an attractive rate of return for new entrepreneurs. He said “A new package for MSME shall also assist to fund CBG Plants across India. We are also exploring global funds to fund CBG projects.”

The 'SATAT' (Sustainable Alternative Towards Affordable Transportation) scheme on CBG was launched on 1.10.2018 which envisages targeting production of 15 MMT of CBG from 5000 plants by 2023. The Government of India has taken various enabling steps to ensure the success of the SATAT scheme. Oil Marketing Companies have offered long term pricing on CBG to make projects bankable and have agreed to execute long term agreements on CBG. The Minister said that Bio-manure, an important by-product of CBG Plants, is also in the process of being included in Fertilizer Control Order 1985. This will make it easier to market and provide an opportunity for organic farming across the country as the 5000 CBG Plants are expected to produce 50 MMT Biomanure.

On the CBG potential of Tamil Nadu from existing waste and biomass sources, Shri Pradhan said that utilizing about 2.4 MMTPA of it shall result in setting up of around 600 Plants across the State which would result in the investment of about Rs. 21,000 crore and direct employment potential of about 10,000. Regarding the 15 TPD capacity IOT Biogas Plant at Namakkal, state of the art Plant inaugurated today, the Minister said that CBG produced from the Plant can fuel more than 1000 vehicles per day in Salem – Namakkal region. The Biogas Plant shall also fuel 2 industries with green alternative fuel. Under SATAT scheme, IOT Biogas decided to divert part/full biogas production to Compressed Biogas (CBG) generation. The Compressed Biogas procured from IOT Biogas plant shall be sold through Retail Outlets (ROs) and Institutional Business (IB). This is the first time an alternative to natural gas is being sold by Oil Marketing Companies. The numbers are to increase manifold in the coming years. The Minister said that it is for the first time that we are inaugurating facilities that provide an environment friendly gaseous fuel from natural sources in Tamil Nadu, as regular CNG fuel stations are not yet available in this State.

The Minister said that there is immense potential in India's Oil and Gas sector and the projects that have been initiated in the recent past would go a long way in ensuring India’s energy security. Biogas production is growing steadily, as more people are setting up biogas plants to produce biogas. Biogas is a renewable, as well as a clean, source of energy. The gas generated through bio-digestion is non-polluting and it reduces greenhouse emissions. He said “Harnessing the full potential of biofuels to generate alternative energy in various forms, including Compressed Biogas or CBG, ethanol, 2G ethanol, and biodiesel will help achieve our PM Modi's vision of reducing import dependence of oil and ensuring sustainable energy future in the country.”

Shri Pradhan said that the Government of India has been promoting Biofuels including CBG to increase the green-energy mix, reduce import dependence, create employment especially in semi-urban & rural areas and reduce pollution. Usage of CBG shall assist in achieving climate change goals of India as per the Paris Agreement 2015. This shall also be in alignment with schemes of Government of India like Swachh Bharat, Atmanirbhar Bharat and Make in India.

Chief Minister of Tamil Nadu, Thiru Edappadi K. Palaniswami, speaking on the occasion, said that the State supports clean energy initiatives. He also thanked Shri Pradhan for helping in commissioning of the CBG Plant in a very short time.

Ministers from Tamil Nadu, Secretary, Petroleum & Natural Gas, Chairman, Indian Oil, and senior officials of the Tamil Nadu Government, MoP&NG and OMCs had joined for the inauguration.