By Vinod Jagan
It is estimated that India generates an average of 62 million tonnes of municipal solid waste every year. Most of the waste ends up in landfills without proper segregation or scientific treatment. This vast amount of waste is now proving to be a major headache for the government and the local municipal bodies. As a result, the government is looking at introducing new policies to tackle this issue and is now also exploring at the potential of the waste-to-energy sector contributing to economic growth.
The biofuel industry remains among India’s most underdeveloped. Although there are many private players in this space, the industry has not reached its full potential due to the government’s low interest. But things look to be changing, as evidenced by recent developments which indicate a bright future for India’s biogas and biofuel industry.
The 2018 National Policy on Biofuels, which was approved by the Union cabinet last month, is one such government effort, with an aim to reduce carbon emission by 40%. This policy, if implemented properly, will enable cut in oil imports by Rs 4,000 crore this year alone.
The policy is also keen to encourage the extension of financial incentives to the ‘basic biofuels’ (first generation bioethanol and biodiesel) and ‘advanced biofuels’ (second generation ethanol, municipal solid waste third generation biofuels and bio-CNG) categories. The policy also encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil and short gestation crops. The policy is also expected to give a push to the newly launched Gobardhan Yojana.
The National Investment and Infrastructure Fund of India (NIIF) recently signed a MoU with the UK to set up a Green Growth Equity Fund. The NIIF and the UK government have committed £120 million to the fund, which will be managed by EverSource Capital, a joint venture of home-grown private equity firm Everstone Group and Lightsource BP. The NIIF plans to raise Rs 8,000 crore from various sources to fund projects worth Rs 16,000 crore for the current fiscal.
Indian oil and gas companies are not far behind in reaping the opportunities of this sector. State-run oil companies Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation plan to spend nearly Rs 10,000 crore to set up bio-CNG plants across the country to promote clean fuel and reduce India’s fuel import bill.
Encouraging a green fuel revolution
Under the National Biogas and Manure Management Programme (NBMMP), the government aims to set up 65,180 family type biogas plants to provide biogas for cooking and electricity purposes. To execute this project effectively, the government is also providing subsidies to set up the biogas plants. The subsidy amount varies from Rs 5,500 to Rs 17,000.
Meanwhile, the Gobardhan Yojana also aims to achieve the twin objectives of ensuring cleanliness in villages and producing bioenergy.
India’s biofuel industry is ripe with opportunity, making it a win-win situation for private players and the government. Developments in this industry will reduces India’s dependency on fossil fuel, reduce carbon emissions and help tackle air pollution, and generate employment opportunities.
Vinod Jagan is co-founder and managing partner at Quantum Green, a Bangalore-based biogas and waste-to-energy start up.