Compressed Biogas (CBG) production will get a boost from the financial assistance the government has promised in the budget for the collection of biomass, industry executives said.
The inability to collect biomass at an economically viable price has been one of the key reasons holding back the expansion of compressed biogas plants in the country.
“In continuation to the earlier announced phased blending target of 1-5%, the budget announcement of incentive for biomass collection is a positive, considering that the cost of aggregation also affects the viability of CBG projects,” said GAIL chairman Sandeep Kumar Gupta, adding that the policy details will provide more clarity on its impact.
Finance minister Nirmala Sitharaman on Thursday said the government will provide financial assistance “for procurement of biomass aggregation machinery to support collection.” The government has allocated Rs 150 crore for the biomass collection scheme.
“The incentive will benefit both biogas producers as well as farmers,” said Indraprastha Gas Ltd (IGL) managing director Kamal Kishore Chatiwal. IGL is the country’s largest city gas distributor.
Biogas producers usually source biowaste from farmers either directly or through aggregators. But with increasing demand for such waste, farmers in some areas have begun to ask for higher prices, making the collection unviable. The transport and storage also add to the cost.
