By Preeti Wadhwa
For Punjab, being an agrarian state is both a blessing and a curse. While it is a major producer of several crops, it also faces the issue of waste management from crop residue. This often results in stubble burning, leading to high levels of pollution. The high amount of waste generated can be beneficial if effectively utilised for generating renewable energy. The state produces approximately 20 million tonnes (mt) of paddy straw annually. While 11 mt of this waste is used in different applications, the remaining 9 mt needs to be disposed of scientifically. To this end, compressed biogas (CBG) offers a dual solution, addressing both waste management issues and renewable energy objectives in the region. Given this opportunity, in recent years, the Punjab Energy Development Agency (PEDA) has focused on CBG uptake.
Current status of CBG uptake
As of June 2024, Punjab’s total installed biopower capacity stood at 567.25 MW. Currently, four CBG projects with a total capacity of 85 tonnes per day (tpd) are operational, consuming about 180,000 tonnes of paddy straw annually. By December 2024, seven more CBG projects with a total capacity of 79 tpd are expected to be operational. Additionally, 27 CBG projects are in various pre-project phases. Once commissioned, these 38 CBG projects will consume about 1.56 mt of paddy straw annually and generate approximately 470 tpd of CBG.
In addition, PEDA has signed an MoU with GAIL Limited to establish 10 CBG projects in the state, with a total capacity of 150 tpd. These projects will consume about 500,000 tonnes of paddy straw annually and prevent stubble from being burnt in approximately 250,000 acres of land, will attracting investments of about Rs 6.5 billion. Furthermore, these projects are expected to create direct employment for over 600 individuals and indirect employment for about 1,500.
PEDA has also signed an MoU with Hindustan Petroleum Corporation Limited to set up 10 CBG projects with a total production capacity of 100 tpd. These collaborations are expected to consume a significant amount of paddy straw, prevent stubble burning and generate employment opportunities. These projects will consume about 314,000 tonnes of paddy straw annually, prevent stubble from being burnt in about 200,000 acres of land and fetch investments of about Rs 5 billion. Furthermore, direct employment for 600 individuals and indirect employment for approximately 1,500 will be generated through these projects.
Policy initiatives to promote CBG
To promote CBG projects, both Punjab and the central government have been offering various incentives. Currently, state incentives in Punjab include exemptions from land stamp duty and registration charges, electricity duty during construction and testing, and change of land use and external development charges, as well as the availability of panchayat land on long-term lease. To ensure ease of doing business, Punjab has launched a single-window clearance system for CBG projects. Furthermore, the state allocates command areas based on the capacity of the project, factoring in the normative consumption of biomass/agro-residue to avoid overlapping of command areas and ensure optimal utilisation of biomass/agro-residue.
To further promote biofuels, the Punjab government is aiming to launch the Punjab State Policy for Biofuels. It aims to efficiently utilise biomass waste for biofuel production. The need for this policy stems from the fact that out of the 20 mt of paddy straw produced in Punjab, about 9 mt is still available for burning to prepare fields for the next crop within a short time frame. The policy thus aims to set up approximately 300 CBG projects of 10 tpd capacity that can utilise the remaining paddy straw.
The draft policy proposes several more incentives to boost the CBG segment. It includes state financial assistance (SFA), offering approximately Rs 25 million per 4.8 tpd CBG project, with a maximum SFA of Rs 50 million per project. This assistance will be provided to new project developers on a first come, first served basis. Additionally, the policy proposes road tax exemptions for vehicles running on CBG. The exemptions vary based on the vehicle category, ranging from a 50 per cent exemption for one year for
four-wheelers to a 100 per cent exemption for three years for buses, three-wheelers and goods vehicles.
Challenges and the way forward
Despite the progress, the CBG segment in Punjab faces several challenges, including ensuring 100 per cent and long-term CBG offtake agreements for 25 years by oil and gas marketing companies. To this end, the expansion of the gas distribution network is necessary to further promote CBG uptake through the CBG-city gas distribution synchronisation scheme. Assured offtake and promotion of fermented organic manure (FOM) and liquid FOM is another key challenge. Financial closure of CBG projects also remains cumbersome.
Furthermore, due to a lack of awareness about the advantages of CBG projects, some locals oppose the setting up of these projects, which hampers project execution. Several CBG projects that have been commissioned are not able to operate at full capacity, which needs to be addressed going forward. All in all, Punjab is turning the issue of agricultural waste into an opportunity by converting it into CBG. However, it still faces several hurdles in the uptake of CBG that need to be addressed in a timely manner.
Based on a presentation by M.P. Singh, Director, Punjab Energy Development Agency, at Renewable Watch’s “Compressed Biogas in India” conference
