Dharmendra Pradhan & Tamil Nadu CM inaugurate compressed bio-gas plant and CBG stations

New Delhi: A compressed bio-gas (CBG) plant of IOT (IOT Infrastructure & Energy Services Limited), a joint venture of Indian Oil Corporation with Oiltanking GmbH of Germany, at Namakkal in Tamil Nadu together with five CBG stations for automobiles have been remotely inaugurated jointly by Chief Minister of Tamil Nandu Edappadi K Palaniswami and Union Petroleum Minister Dharmendra Pradhan in the presence of IndianOil's Chairman Sanjiv Singh and other senior officials on Tuesday.

A press release from the IndianOil said that the state-of-the-art plant is among the first to take off under the government's SATAT scheme (Sustainable Alternative Towards Affordable Transportation), and will produce CBG (compressed bio-gas) for supply to vehicles in the Salem-Namakkal region of Tamil Nadu, besides offering a green fuel alternative to local industries.

What is CBG (compressed bio-gas)?

The bio- gas is purified to remove hydrogen sulfide (H2S), carbon dioxide (CO2), water vapour and compressed as Compressed Bio Gas (CBG), which has methane (CH4) content of more than 90%. It is produced from bio-mass sources like agricultural residue, cattle dung, sugarcane press mud, municipal solid & liquid waste, etc., through anaerobic digestion. With calorific value and other properties similar to CNG, CBG can be substituted as a green renewable fuel in transportation, industrial and commercial sectors.

According to the Petroleum Minister, bio-manure, an important by-product of CBG plants, is in process of being included in the Fertilizer Control Order 1985. This will make it easier to market and provide an opportunity for organic farming across the country as the 5,000 CBG plants envisaged are expected to produce 50 million tonnes of bio-manure per year.

According to the IndianOil's Chairman, CBG has properties similar to CNG and hence can be used in vehicles that run on CNG fuel without any modifications. It is also suitable for industrial and commercial sectors, given the abundance of bio-mass in our country. IndianOil has already begun marketing of CBG in a small way Maharashtra under the brand name IndiGreen.

SATAT

The 'SATAT' scheme, launched on October 1, 2018, envisages targeting production of 15 million tonnes of CBG per annum from 5,000 plants by the year 2023. So far, the Oil and Gas Marketing Companies (OMCs) have awarded more than 500 Letters of Intent (LOI) for production and supply of about 1 million metric tonnes (MMT) of CBG. IndianOil has also initiated marketing of CBG from two of its fuel stations in Pune and Kolhapur in September 2019.

Speaking on the occasion, Pradhan expressed happiness that the OMCs, including IndianOil and HPCL, have already awarded 13 LOI  in Tamil Nadu state for production and supply of 30 thousand metric tonners per annum (TMTPA) of CBG. The estimated investment in these plants is likely to be about Rs 450 crore and the plants are expected to generate direct employment of about 200 and indirect employment across the value chain – from the collection of waste and bio-mass and plant operation to sale of CBG and bio-manure.

He further said that the total CBG potential in Tamil Nadu from existing waste and biomass sources is estimated to be about 2.4 MMTPA. The utilisation of this entire potential shall result in the setting up of about 600 plants across the state, at an investment of about Rs 21,000 crore, with the direct employment potential of about 10,000.

The Minister also disclosed that the government is in the process of including CBG under priority sector lending to ensure ease of financing in setting up CBG plants. The central financial assistance or subsidy for setting up CBG plants has been extended to the year 2020-21 to promote new projects. "The new package for MSMEs shall also facilitate funding of CBG plants across India. The government is also exploring global funds for CBG projects, which offer an attractive rate of return for new entrepreneurs," Pradhan added.

Pradhan expressed hope that the Namakkal plant of IOT shall function as a model plant which shall be replicated across India. He said that harnessing the full potential of biofuels to generate alternative energy in various forms, whether it is CBG, ethanol, 2G-ethanol or bio-diesel, will go a long way in achieving Hon'ble Prime Minister, Shri Narendra Modi's vision of reducing dependence on crude oil imports while ensuring energy security for the nation.

In line with Prime Minister's energy vision for India, with its four pillars – energy accessibility, energy efficiency, energy sustainability and energy security – the Government of India has been promoting all bio-fuel alternatives to increase the proportion of green fuels in the energy mix, reduce import dependence, create employment opportunities, especially in semi-urban and rural areas, and reduce pollution, Pradhan said.

Large scale use of CBG shall enable India to achieve its climate change goals as per the Paris Agreement of 2015. The initiative is also in alignment with the other schemes of the government like Swachh Bharat, Atmanirbhar Bharat and Make in India, he added. 

Palaniswami, during his address, mentioned that the state of Tamil Nadu leads nationally in the production of renewable energy with a total renewable energy capacity of 15876 MW. The major sources of renewable energy in Tamil Nadu are Hydel energy (2322 MW), Wind Energy (8523 MW), Solar Energy (4054MW), BioMass (266 MW) and other forms of Renewable energy (714 MW). During his address, he thanked Pardhan for having set up the CBG infrastructure in Tamil Nadu and hoped that more such projects would be commissioned in Tamil Nadu. He also assured full cooperation and support of the government of Tamil Nadu to any such initiative to be taken in the state of Tamil Nadu by the Ministry of Petroleum & Natural Gas.

Welcoming the virtual gathering, IndianOil's Chairman said that the IOT plant at Namakkal is a pioneering step in commencement of CBG sales under the SATAT scheme of the Govt. of India. Set up in 2012 with German technology, it has now been comprehensively refurbished and upgraded with the installation of a purification and compression system. Bio-gas is purified to remove hydrogen sulphide, carbon dioxide and water vapour, and then compressed to form CBG, which has methane (CH4) content of more than 90 percent.

IndianOil's Director (Marketing) Gurmeet Singh proposed the vote of thanks.

The Namakkal plant will process 290 tonnes per day of feedstock to produce 15 tonnes per day of CBG, which shall be sold for use in vehicles from five petrol pumps in Namakkal & Salem, besides two industrial units.

Among the 500 LOIs awarded by OMCs for the supply of CBG, IndianOil accounts for 309 LOIs for production & supply of about 0.7 MMT of CBG.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)