India biogas plants scheme “lacks clarity”

The state government of New Delhi had an initial target of setting up 5,000 compressed biogas plants (CBG plants) by 2023-24 in its SATAT scheme, but only 40 CBG plants have been developed. A panel reviewing the scheme said that a lot of ground needs to covered, in a report tabled in the Lok Sabha on 21 December, according to Energy World.
The SATAT scheme is designed to encourage entrepreneurs to set up CBG plants, as well as to produce and supply CBG oil to marketing companies for sale as automotive and industrial fuels.
The parliamentary standing committee on petroleum and natural gas said it is "burdened by lack of clarity, procedural hurdles and has not enthused the investors and entrepreneurs to come forward to set up CBG plants."
The report said the government should ensure successful implementation of the scheme by reviewing the progress at regular intervals, and by addressing various impediments.
The panel added the same entrepreneur or investor has been issued a large number of letters of intent, and the banks are failing to extend loans for more than one project to an entrepreneur or investor in possession of multiple letters of intent.
It further noted that since April 2021, the Central Financial Assistance programme for biogas and CBG projects has been discontinued, bringing a major setback to the industry. CBG plants fall under the new and renewable energy category, and so these plants are entitled to Central Finance Assistance.
Consequently, the panel recommended the ministry should encourage the Central Financial Scheme to be reintroduced to incentivise investment.
Indian Oil has invested in five CBG projects and GAIL and Hindustan Petroleum in one each. However, upstream PSUs like ONGC and Oil India - which have a specific mandate relating to production of natural gas and marketing of natural gas respectively, have not invested in any projects so far.
The panel thus suggested that all energy PSUs should seriously look at the SATAT initiative, and invest in CBG plants with their own funds.