India is poised to introduce a transformative program aimed at boosting compressed biogas (CBG) production by increasing guaranteed purchase prices and offering subsidies for new plants. This strategic move by Prime Minister Narendra Modi's government seeks to mitigate carbon emissions and address the challenges posed by rising fossil fuel costs.
Policy Drivers
The urgency of this initiative is underscored by the ongoing conflict in Iran, which has highlighted India's vulnerability to global price fluctuations and supply disruptions. With the Strait of Hormuz largely closed, India, which imports about half of its gas needs, is seeking to make alternatives to imported oil and natural gas more viable.
Supply Side Dynamics
India's Ministry of Petroleum and Natural Gas will implement the program, dubbed Sampoorn, meaning "complete" in Hindi. The program aims to increase the number of operational CBG plants from 200 to 700 in the coming years. Currently, state-owned oil marketing companies and gas utilities pay around ₹72 ($0.76) to ₹74 per kilogram for CBG.
Demand Side Trends
The government incentives are expected to support projects utilizing agricultural residue and food waste, sourced through agencies like the Food Corporation of India. This aligns with India's goal to blend biogas with other natural gas to constitute 5% of total consumption by March 2029.
"India's biogas production has fallen short of earlier goals, but this new program aims to rectify that by making biogas a commercially viable alternative," said a source familiar with the matter.
Outlook
The program is expected to debut this month, with the government aiming to significantly increase biogas production to meet both environmental and energy security goals. Key upcoming data releases will include updates from the Ministry of Petroleum and Natural Gas on the progress of the Sampoorn initiative.
| Metric | Current | Target |
|---|---|---|
| Operational CBG Plants | 200 | 700 |
| Biogas Production (tons/day) | 930 | Increase to meet 5% of consumption |
India's renewed focus on biogas production represents a critical step in its broader strategy to enhance energy security and environmental sustainability.
