Expressing displeasure over the slow pace of the government’s scheme on compressed biogas “SATAT”, the Parliamentary Standing Committee on Petroleum and Natural Gas has noted that it is “burdened by lack of clarity, procedural hurdles and has not enthused the investors and entrepreneurs to come forward to set up CBG plants”.
Having started with an ambitious target of setting up 5,000 CBG plants by 2023-24, as of now, only about 40 CBG plants have been set up, which indicates that lots of ground need to be covered under SATAT scheme, the panel has said in a report on the scheme, tabled in the Lok Sabha on Wednesday.
SATAT scheme encourages entrepreneurs to set up CBG plants, as well as produce and supply CBG to oil marketing companies (OMCs) for sale as automotive and industrial fuels.
The Parliamentary panel’s report has recommended that the government should ensure successful implementation of the scheme by reviewing the progress at regular intervals and address various impediments that pulls back achieving of targets set under this initiative.
Identifying procedural issues with the scheme, the panel noted that the same entrepreneur or investor has been issued a large number of Letters of Intent (LoIs) and the banks are not extending loans for more than one project to the entrepreneur who is holding multiple LoIs.
The committee has also recommended that the Petroleum Ministry should set up a panel to review the LoIs issued so far and also issue guidelines for fresh LoIs alongwith promotion of SATAT scheme in a more sustained and methodical manner.
The panel which is headed by BJP member Ramesh Bidhuri, noted that since April 2021, the Central Financial Assistance programme for biogas and CBG projects has been discontinued and this has served as a major setback to the industry.
It further observed that the CBG plants fall under new and renewable energy category and hence these plants are entitled for Central Finance Assistance.
The panel thus has recommended that the ministry should take up with the Ministry of New and Renewable Energy as well as the Finance Ministry, the issue of reintroduction of Central Financial Scheme to incentivise and enthuse entrepreneurs to set up CBG plants in the country.
While oil marketing company like Indian Oil has invested in five CBG projects and GAIL and Hindustan Petroleum in one each, upstream PSUs like ONGC and Oil India Ltd (OIL), which have a specific mandate relating to production of natural gas and marketing of natural gas respectively, have not invested in any project so far.
The panel therefore has suggested that all the energy PSUs should seriously look at the SATAT initiative and invest in CBG plants with their own funds.
