The government has been offering a conducive environment to Indian developers in the bioenergy space towards the production of biofuels. To this end, in May 2018, the National Biofuel Policy was launched to achieve 10 per cent ethanol blending by 2022 and 20 per cent ethanol blending by 2030. To achieve this, 12 second-generation ethanol plants are going to be set up by oil marketing companies (OMCs), and in the first phase, five plants got approved. All the second-generation bioethanol plants are supported by a viability gap funding of Rs 1.5 billion under the Pradhan Mantri JI-VAN scheme. The government has also planned to replace 15 million metric tonnes of compressed natural gas (CNG) in the first phase. The Ministry of Petroleum and Natural Gas has launched the Sustainable Alternative towards Affordable Transportation (SATAT) scheme to set up 5,000 compressed biogas (CBG) projects by 2023 and ensuring an offtake price of Rs 46 per kg of CBG. Meanwhile, the Ministry of New and Renewable Energy has launched the financial support mechanism under the waste-to-wealth mission for CBG projects.
While the policy impetus is a positive step, some reforms and ideas that can transform the bioenergy segment further are discussed in this article.
Key reforms needed
The need of the hour is the implementation of decentralised farm-to-fuel projects by establishing an assured and sustainable supply chain model. To make this a success, OMCs need to ensure 100 per cent offtake of CBG from project developers. In addition, the infrastructure of the city gas distribution networks can be utilised to transport CBG. Further, projects such as 2G advanced bioethanol and CBG are a few alternatives to utilise straw more effectively. It will also help build a circular bioeconomy by producing transportation fuel and biofertiliser for farmers.
The key reforms needed in the bioenergy segment to manage crop residue are the formulation of a long-term policy for crop residue management, a minimum support price for crop residue to be utilised in advance biofuel production, establishment of a sustainable biomass supply chain by the state governments with the help of village-level entrepreneurs and greater mechanisation of agricultural practices to collect crop residue in a short period of time.
Some institutional-level reforms could be the creation of a carbon market for domestic biofuel industries, with binding targets and setting up of an apex biofuel board, which sets guidelines for state governments.
In the transportation sector, reforms are needed to facilitate the consumption of biofuels such as bioethanol and CBG for farm machinery (tractors, loaders, etc.) that are used in the rural supply chain and promotion of flex fuel vehicles, which are 100 per cent biofuels- and CBG-run vehicles.
Solutions to curb the stubble burning menace
India, being an agrarian economy, generates a lot of agricultural waste. This is a matter of both concern and opportunity. In northern India, stubble burning takes place during winter, causing pollution, which is a grave public health concern. On the contrary, the same stubble can be used to produce bioenergy. Around 178 million tonnes (mt) of surplus agricultural crop residue can meet India’s demand for biofuel (2G ethanol and CBG). This will help solve the menace of stubble burning. But first, it is important to understand why stubble burning takes place.
Most farmers use combined harvesters, which separate the grain leaving the paddy straw and stalk behind. After harvesting of paddy, there is a narrow window for farmers to harvest and sow wheat for the next cycle, usually 45 days. In this time period, the agricultural crop residue must be cleared. As there is no other efficient solution to collect the paddy residue, and a suitable supply chain model for it to be processed further, stubble burning becomes the most convenient method for farmers to get rid of paddy waste quickly and cheaply. This leads to pollution.
Therefore, it makes better sense to use agricultural crop residue towards the production of biofuel, instead of burning and destroying it and causing air pollution.
Globally, mandates such as Renewable Energy Directives II, low-carbon fuel standard and RenovaBio will continue to create market growth opportunities.
However, for that to happen, the following developments should take place. One, states need to ensure collection, storage and supply of agricultural residue to biofuel projects. Two, states need to build a sustainable biomass supply chain by developing village-level entrepreneurs. Three, agricultural mechanisation schemes of the central government need to be co-opted by the state governments to establish and promote mechanisation in the biomass supply chain. Four, institutes such as the National Bank for Agriculture and Rural Development and agricultural universities can play a key role in funding and extension work to make farmers aware of the utilisation of agricultural crop residue for biofuels. Last but not the least, a one-window clearance for bioenergy projects by state pollution control boards will help immensely.
All in all, the use of biodiesel can reduce greenhouse gas emissions by 35 per cent and the carbon footprint by 90 per cent against fossil fuels by 2032. Also, this application will generate additional income for around 80 million farmers per annum.
Emerging technology developments
Praj Industries has developed an in-house technology in India that converts biomass (crop residue) to second-generation bioethanol. Using our technology, OMCs such as Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited are setting up rice straw to ethanol projects of 100 kilolitre capacity per day each in Haryana, Punjab and Odisha. Each plant is going to consume around 200,000 tonnes of rice straw per annum. We have also developed a technology to produce CBG from agricultural crop residue and demonstrated it successfully.
To give a broader picture of the untapped potential in this space, let me share some facts. One tonne of rice straw can produce 150 kg of CBG and around 300 kg of biofertiliser. From 20 mt of surplus rice straw, around 3 mt of CBG and around 6 mt of biofertiliser can be produced in India. The latter will also give a boost to organic farming in the country.
The use of biodiesel can reduce greenhouse gas emissions by 35 per cent and the carbon footprint by 90 per cent against fossil fuels by 2032. Also, this application will generate additional income for around 80 million farmers per annum.
The way forward
Globally, mandates such as Renewable Energy Directives II, low-carbon fuel standard and RenovaBio will continue to create growth opportunities for the bioenergy segment. Leveraging global partnerships on the technology and market side, Praj Industries will be able to increase its global market footprint. The success of India’s first batch of four commercial 2G biorefineries will instil customer confidence and open market opportunities, especially in Europe.
Meanwhile, the aviation sector is considered a major contributor to greenhouse gas emissions and is under pressure to curb its carbon footprint. Several leading commercial airlines have committed to the adoption of sustainable aviation fuel, going forward. Isobutanol technology development by Praj Industries will provide a strong platform to service emerging opportunities in the aviation and defence sectors, strengthening our position in the advanced biofuel market globally.
Following the initial success of CBG projects in India, there will be greater interest among project developers that will pave the way for large-scale market opportunities. With rising concerns over energy security and greater focus on self-reliance and environment conservation, bioenergy developers expect an increased impetus to the blending programme and for it to take centre stage as it has socio-economic, energy and environmental benefits.