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.

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.