Get Your Bio CNG Plant Up and Running in India

Bio-CNG plants utilize biomass to produce compressed natural gas (CNG) via anaerobic digestion method. Biomass includes agricultural waste, sewage sludge, and animal manure, which can be converted into energy.

Biogas, a renewable fuel, is primarily composed of methane (~60%), carbon dioxide (~40%), and small amounts of hydrogen sulfide. It can be used directly as fuel or purified to create Compressed Biogas (CBG) by removing carbon dioxide (CO2) and hydrogen sulfide (H2S). CBG contains over 90% methane, making it comparable to commercially available natural gas in composition and energy potential.

Advantages of Bio-CNG

Renewable Resource
Effective Waste Management Solution
Compatible with Existing Infrastructure
Versatile Applications
Carbon Neutral or Negative

Bio-CNG Market Demand and Why Now?

Bio-CNG serves as an alternative to traditional CNG for vehicle fueling, offering both cost savings and lower emissions. In India, Bio-CNG is notably cheaper than CNG, making it budget-friendly for middle and lower-income groups. Additionally, Bio-CNG serves as a substitute for LPG, providing a more cost-effective and eco-friendly option for cooking, especially in rural areas where biogas is commonly used.

India’s high energy consumption, largely fueled by petrol and diesel, coupled with extensive waste production, presents a significant opportunity for Bio-CNG. Through the SATAT policy announced in September 2018, the Indian government aims to establish 5000 Bio-CNG plants nationwide, producing 15 million tons domestically, thus fostering self-reliance and addressing waste management challenges.

Setting up a Bio-CNG plant in India involves several key steps:

1. Feasibility Study:
Conduct a thorough feasibility study to assess the market demand, availability of biomass feedstock, regulatory requirements, and financial viability of the project.

2. Business Plan:
Develop a comprehensive business plan outlining the plant’s design, capacity, infrastructure requirements, financial projections, and marketing strategies.

3. Location Selection:
Choose an appropriate location for the plant, considering factors such as proximity to biomass sources, transportation access, utilities availability, and regulatory considerations.

It is advisable that the plant should be situated within a 15-kilometer radius of the readily available biomass as they are not economically viable due to their low energy content per volume and huge quantity.

4. Obtain Necessary Permits and Licenses:
Obtain all required permits, licenses, and approvals from local, state, and central authorities, including environmental clearances and land acquisition permissions.

Following major approvals are required. However the list are not exhaustive and State / district Authorities may be approached for further clearances required (if any)

Approvals Required	Before Construction (New Factory )	After Construction but Before Production / Operation	Annual Renewal
Land conversion to Non Agricultural (applicable for non-industrial land)	Conversion and registration	Not Applicable	Not Applicable
DIC (District Industry Centre)	Registration as MSME(Micro , Small & Medium Enterprises)	Not Required	Not Required
Fire	NOC (No Objection Certificate)	License	Required
Health & Safety	NOC	License	Required
IOF( Indian Ordinance Factories) – Plan approval	NOC,BoCW Registration( Building & Other Construction Workers Registration)	License (Sub contractor License)	Required
DTCP – District Town & Country Planning	Plan Approval & Tax	Not Required	Not Required
Local Panchayat	Plan submission, NoC and Tax payment based on construction area	Yearly tax (if applicable)	Not Required. Tax to be paid (if applicable)
BDO( Block Development Officer) – Running License	Not Required	Running License	Required
PCB( Pollution Control Board)	Consent for Establishment	Consent for Operation	Required
PESO( Petroleum and Explosives Safety Organization)	Consent for Establishment	Consent for Operation	Required
MNRE ( Ministry of New and Renewable Energy)	CFA( Central Financial Assistance) Approval	CFA approval after 72 hours plant operation	Not Required

You can express your interest by submitting an EoI (Expression of Interest) directly to the Oil Marketing Company. Upon evaluation of your EoI, the concerned OMC will issue a LoI (Letter of Intent). There are no application fees, EMD, or security deposits required for submitting an EoI. However, upon receiving the Letter of Intent, the successful applicant may need to submit a BG (Bank Guarantee) of Rs. 5 lakh per plant for proposed plants yet to be set up, or Rs. 1 lakh per plant for existing plants.

5. Infrastructure Setup: Set up the necessary infrastructure for the plant, including storage tanks, processing units, purification equipment, and compression facilities.

6. Feedstock Procurement:
Establish reliable supply chains for biomass feedstock, such as agricultural residues, organic waste, sewage sludge, and animal manure.

The choice of feedstock for CBG production and the financial feasibility of a plant depend on factors such as input feedstock cost and plant location. Under the SATAT scheme, the responsibility for setting up a CBG plant lies with the entrepreneur. Therefore, applicants are encouraged to evaluate the CBG production and financial viability of their plant independently. The following tentative yield estimates for various feedstocks are based on discussions with existing and proposed CBG plants and technology providers. However, these estimates are only approximate, and actual yields may vary significantly depending on the quality of the feedstock.

Feedstock	CBG Production(Ton)	Feedstock requirement (Tentative)
Agriculture Residue	1	10 Ton
Press Mud	1	25 Ton
Spent Wash	1	10 KL
Bagasse	1	10 Ton
Municipal Solid waste	1	20 Ton
Cow Dung	1	50 Ton
Chicken Litter	1	25 Ton
Forest Residue	1	15 Ton
Napier Grass	1	10 Ton
Sewage Waste	1	15 MLD

7. Processing and Purification:
Implement the necessary processes for converting biomass into biogas through anaerobic digestion and then purifying the biogas to remove impurities such as carbon dioxide and hydrogen sulfide, resulting in Bio-CNG.

8. Storage and Distribution:
Set up storage facilities for storing Bio-CNG and establish distribution networks to supply the fuel to end-users, such as vehicle fueling stations or industrial users.

9. Quality Control: Implement stringent quality control measures to ensure the purity and safety of the Bio-CNG produced.

10. Compliance and Regulations: Ensure compliance with all relevant regulations, standards, and safety guidelines governing Bio-CNG production and distribution.

11. Operations and Maintenance: Establish effective operational procedures and maintenance schedules to ensure the efficient and reliable operation of the plant.

Who will Buy the Bio-CNG?

OMC shall execute a Commercial Agreement of 15 years with the CBG Plant owner, to be extended on mutual consent.

According to the EOI, OMCs are offering a procurement price of Rs. 46/kg + taxes for CBG. The gas must be compressed to 250 bar pressure and delivered to OMC/GMC Retail Outlets within a 25 km radius from the CBG Plant.

The minimum procurement price will remain at Rs. 46/kg + taxes from April 1, 2024, to March 31, 2029.

Schemes and Benefits the Indian Government offer

The Reserve Bank of India has included CBG projects in Priority Sector Lending, effective September 4, 2020. Additionally, Bio-manure produced from CBG Plants is now recognized under the Fertilizer Control Order 1985, as per the Gazette Notification dated July 14, 2020.

The Ministry of New and Renewable Energy has extended the Central Financial Assistance (CFA) Scheme for CBG projects. Under this scheme, financial assistance is provided based on the CBG production capacity, with a maximum cap of Rs. 10 Crore per plant for those producing 12 Ton per Day or more.

Moreover, CBG projects are eligible for coverage under the Agriculture Infrastructure Fund of the Department of Agriculture of the Government of India. As per the AIF guidelines, CBG projects can avail of interest subvention at 3% per year for a period of 7 years, up to a Bank Term Loan Amount of Rs. 2.00 Crore.