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Mandating Compressed Bio-Gas (CBG) Blending in CGD Sector

By Amigos IAS

Why is it in the news?Top of Form

 

  • The Ministry of Petroleum & Natural Gas has introduced a significant policy mandating the blending of Compressed Bio-Gas (CBG) in the City Gas Distribution (CGD) sector, covering both the transport (CNG) and domestic (PNG) segments.
  • The move is part of a strategic initiative to promote sustainable practices, reduce dependence on conventional fuels, and contribute to environmental conservation.

 

CBG Blending Obligation (CBO) 

About

  • The CBG Blending Obligation (CBO) is a phased approach designed to promote the production and consumption of CBG while displacing traditional petroleum-based fuels.
  • CBO aims to stimulate demand for CBG in the CGD sector, offering a sustainable alternative for both transportation and domestic use.
  • The policy is expected to attract significant investments, estimated at around Rs. 37,500 crores, and facilitate the establishment of 750 CBG projects by the fiscal year 2028-29.

 

Objectives of CBO

  • Stimulating CBG Demand in CGD Sector: Encourage the integration of CBG into the City Gas Distribution sector, fostering its use in both transportation and domestic applications.
  • Import Substitution for LNG: Promote the use of CBG as a substitute for Liquefied Natural Gas (LNG), contributing to reduced dependence on imported fossil fuels.
  • Foreign Exchange Savings: Achieve savings in foreign exchange by utilizing domestically produced CBG instead of importing LNG.
  • Circular Economy Promotion: Foster a circular economy by encouraging the production of CBG from biomass sources, such as agricultural residue, cattle dung, and municipal solid waste.
  • Assisting in Achieving Net Zero Emissions: Align with environmental goals by promoting CBG as a cleaner and sustainable fuel option, contributing to efforts aimed at achieving net-zero emissions.

 

CBO Roadmap

  • The CBO will have a voluntary phase until the fiscal year 2024-2025, after which mandatory blending obligations will come into effect.
  • The mandatory blending percentages are set at 1%, 3%, and 4% of total CNG/PNG consumption for the fiscal years 2025-26, 2026-27, and 2027-28, respectively.
  • Starting from the fiscal year 2028-29, the mandatory blending obligation will be set at 5% of the total CNG/PNG consumption.
  • A Central Repository Body will be responsible for monitoring and implementing the blending mandate.

 

CBG Composition

·       CBG is an energy-rich gas primarily composed of methane (around 90%), with low levels of carbon dioxide, hydrogen sulphide, and ammonia.

·       It is produced through the anaerobic decomposition of biomass sources, including agriculture residue, cattle dung, sugarcane press mud, and municipal solid waste.

 

Other Biofuel Initiatives

  • The government has undertaken various initiatives to promote biofuels, including setting initial indicative blending targets for Sustainable Aviation Fuel (SAF) for international flights.
  • Schemes like SATAT (Sustainable Alternative Towards Affordable Transportation) and GOBAR-DHAN (Galvanizing Organic Bio-Agro Resources Dhan) aim to further promote the use of biofuels in various sectors.

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