Finance Minister Nirmala Sitharaman has announced the launch of a new scheme on bio-manufacturing and bio-foundry to boost renewable energy production and sustainable next-generation products.

The move will help in developing environment-friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs, to further advance India's sustainability mission to achieve net zero goals by 2070. Additionally, phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will be mandated, she announced.

''This scheme will also help in transforming today’s consumptive manufacturing paradigm to the one based on regenerative principles'', she said in the budget speech. Financial assistance also will be provided for the procurement of biomass aggregation machinery to support collection.

Sources say now less than 3% of the installed power generation capacity in India comes from biomass power, cogeneration and waste-to-energy projects.

''The announcement of a new scheme for propagating bio-manufacturing to introduce environment-friendly alternatives on regenerative principles is a welcome step for the inclusive growth of the farming community and will further boost bio-economy’s contribution to the nation’s GDP in times to come," says Pramod Chaudhari, Executive Chairman, Praj Industries.

Experts say the announcement of financial assistance for biomass collection and equipment as a part of the budget will help build a resilient feedstock supply chain and will ensure the availability, accessibility, and affordability of bio-based feedstocks, inspiring investors' confidence in setting up bio-refineries.

''Further, mandatory blending of CBG in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will help in greening the gas supply chain'', observes SN Goel, chairman and managing director of Indian Energy Exchange.

The International Energy Agency (IEA) estimates that once government policies are in place, bioenergy may produce 130 million tonnes of oil equivalent (Mtoe) of useful energy by 2040, or about 15% of India’s total energy demand at that time. The available biomass in India currently stands at 750 million metric tonnes (MMT)/year with surplus biomass availability of 230 MMT/year. At present, an estimated 32% of total primary energy use in India is principally derived from biomass and over 70% of Indians depend on biomass for their energy use across the value chain, says a PwC report.

Over 800 biomass power projects, bagasse cogeneration and non-bagasse cogeneration projects have been installed in the country with an aggregated capacity of 10,632 MW for power generation and 140 TPD for compressed biogas (CBG) production, say sources. There are close to 230 biomass pellet manufacturers and close to 1,030 briquette manufacturers spread across different states, supplying these products to power plants and industries.

The Ministry of New and Renewable Energy (MNRE) had notified the National Bioenergy Programme for five years from April 2021 to March 2026 with an outlay of ₹858 crore under Phase-I to boost bio-energy in India. It has three components, Waste to Energy Programme (Programme on Energy from Urban, Industrial and Agricultural Wastes /Residues), Biomass Programme (Scheme to Support Manufacturing of Briquettes & Pellets and Promotion of Biomass (non-bagasse) based cogeneration in Industries) and Biogas Programme. Central financial assistance is available to projects for setting up large biogas, bioCNG and power plants.

The SATAT’ (Sustainable Alternative Towards Affordable Transportation) scheme of the Ministry of Petroleum and Natural Gas on CBG, targets the production of 15 metric million tonnes (MMT) of CBG from 5000 plants. According to India’s National Biofuels Policy 2018, the target is to achieve an ethanol blending rate of 10% by 2022 and 20% by 2030, which is now advanced to 2025. Two years ago, India launched an “Innovation Roadmap of the Mission Integrated Biorefineries” developed by co-leads and active inputs from Brazil, Canada, EC and the UK at Global Clean Energy Action Forum-2022 at Pittsburgh, in the United States.

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