India produces a significant amount of agricultural residue which is usually burnt in the absence of required processing infrastructure and logistical support. The agricultural residue supply chain has so far been unorganised as farmers and aggregators have not been adequately incentivised and financed. However supportive schemes such as the Guidelines for Crop Residue 2020 (revised in 2023) and solid waste management rules under the Swachh Bharat Mission have laid the ground for creating a new value chain of energy. Reliance Industries, identifying this as an important element in their net zero road map, has plans to invest across the country to produce CBG as an alternate to imported CNG and other fossil fuels making India a prominent source of bio-fuel.
Though the technology for CBG has evolved, commercialisation requires new infrastructure and value chain engagement involving farmers across the states. In addition to being an alternative fuel to meet the growing domestic demand for gas, it also benefits the local agricultural economy of India by providing farmers with an additional revenue stream and helping them avoid penalties linked to the burning of residue. Reliance has planned to set-up around 100 CBG plants over the next 5 years which would consume more than 5.5 million tonnes per annum of agricultural residue and organic waste and lead to projected reduction of nearly 2 million tonnes of carbon dioxide emissions annually.
The CBG industry is highly fragmented in nature and predominantly dependent on agriculture that is affected by seasonal variations. These modalities required DBS Bank India to introduce significant customisations to the standard supply chain financing model to meet the requirements of the project. The financing will enable the ecosystem development for vendor partners to aggregate agri-residue as inputs for the Reliance Compressed Biogas production plants across India. The funding structure will ensure that the logistics are designed in a way that this new stream remains competitive and achieves enhanced commercial scale.
Rajat Verma, Managing Director and Head of Institutional Banking, DBS Bank India, said, “India's green energy sector, which includes solar and wind, as well as emerging areas like biogas, will be one of the key pillars of the country’s net-zero strategy. Bold initiatives like the Compressed Biogas plants, spearheaded by Reliance Industries, are an important step forward to reduce dependance on fossil fuels. Transition financing plays a crucial role in enabling businesses to identify and scale new technologies that can accelerate the path to decarbonisation. DBS Bank India is proud to partner with Reliance Industries to empower the journey to a sustainable future through innovative, responsible banking solutions.”
Harindra K Tripathi, Head Bio-energy Business, Reliance Industries Limited said, “Compressed Biogas plants are one of the key ways to utilise the massive organic waste that our society produces, the burning of which is one of the major contributors to air pollution. In addition to the mitigating effect on carbon emissions, the Reliance CBG plants will also contribute towards the production of Fermented Organic Manure (FOM) which will enhance soil fertility and reduce consumption of chemical fertilizers over a period.”
Soumyo Dutta, Head of Treasury, Reliance Industries Limited said, “As a company, Reliance Industries has accelerated plans to deploy bioenergy projects and we are proud to have DBS Bank India partner with us in our larger goal of sustainable development and in the clean energy transition of our nation.”
The movement towards biofuels aligns with the country’s clean energy shift and is further enabled by regulations that have incentivised demand for biomass to help meet international emission reduction commitments. Launched during India's G20 presidency, the Global Biofuel Alliance aims to cultivate markets for sustainable biofuels, with the goal of replacing coal and oil. The Reliance CBG project is poised to play a pivotal role in this strategy, contributing significantly to the development of sustainable energy alternatives.
Reliance Industries Limited is setting up world class biogas facilities at multiple locations at Uttar Pradesh by using surplus agro residue and organic waste. These facilities will be linked to a network of biogas dispensing stations operated by Reliance Jio BP. A flagship CBG production facility has been set up in Barabanki, a city with historical significance in Uttar Pradesh. The Barabanki plant alone is expected to cut down CO2 emissions by 40,000 tonnes annually, an effect comparable to the carbon absorption of a 15,000-acre rainforest, highlighting Reliance's commitment to spearheading India's bioenergy transformation.
DBS Bank is renowned for its expertise in supply chain financing and goes beyond traditional banking to enable responsible solutions for large enterprises, their supplier networks as well as small and medium businesses that empower them to streamline operations for enhanced efficiency. The bank's extensive Asian network and deep expertise in customising sustainable solutions enable businesses to mitigate risks and seize growth opportunities.