India mandates biogas blending in CNG, piped gas

Market: Natural gas, Oil products
27/11/23

India plans mandatory blending of compressed biogas (CBG) in domestic compressed natural gas (CNG) and piped natural gas (PNG) to cut its reliance on expensive imports of LNG.

Blending will initially be voluntary at 1pc for automobiles and households from the April 2024-March 2025 fiscal year and become mandatory from 2025-26, the oil ministry said on 24 November. Natural gas is mostly used in India's gas distribution network through PNG in households and CNG for automobiles.

The CBG blending obligation (CBO) will promote production and consumption of CBG in the country, oil and gas minister Hardeep Singh Puri said, adding that it will encourage investment of around 375bn rupees ($4.5bn) and help to establish 750 CBG projects by 2028-29. The CBO is to increase to 3pc during 2026-27 and to 4pc during 2027-28, after which it will rise to 5pc. A central repository body will monitor and implement the blending mandate based on operational guidelines approved by the oil minister.

The government last month launched its 12th city gas distribution bidding round offering areas in Jammu and Kashmir, Ladakh, Arunachal Pradesh, Meghalaya, Manipur, Nagaland and Sikkim states to connect to the natural gas pipeline network.

"At present about 23,500km-long gas pipeline network is under operation in the country and around 12,000km pipeline is approved/under construction," Puri had said.

India had 300 city gas distribution networks under the Petroleum and Natural Gas Regulatory Board as of August, covering 88pc of the country's geographical area and 98pc of the population.

The country has outlined plans to make India a gas-based economy, with the share of natural gas in its primary energy mix targeted to rise to 15pc by 2030 from around 6pc in 2022.

The government also aims to have 1pc sustainable aviation fuel (SAF) in jet fuel by 2027, which will double to 2pc in 2028, it said on 24 November. This would be done initially for international flights, as part of the country's effort to achieve net zero by 2070. Delhi initially targeted to have 1pc SAF blending in jet fuel by 2025, saying it would need 140mn litres/yr of SAF to achieve this.

Ethanol blending

India additionally plans to increase ethanol blending in gasoline to 20pc by 2025 as part of efforts to reduce dependence on foreign oil. Now the government is also in discussions to promote production of ethanol from maize. This comes as there has been an increase in maize cultivation area and yield per hectare in the past few years.

The government is working towards developing high-starch yielding varieties and quality of maize by removing aflatoxins, having faster registration of new seed varieties with high starch, along with a maize training programme for distillers and seed companies.

India's heavy reliance on crude imports and rising transport fuel demand have prompted the government to turn to ethanol blending in gasoline.

Indian oil companies had offered to pay more for ethanol produced from damaged food grains and maize to try to boost fuel ethanol supplies, after the government suspended production from surplus rice in July.

State-controlled upstream firm Oil India plans to set up a second-generation bio-refinery in Numaligarh to produce 50,000 t/yr of ethanol from non-food grade feedstock bamboo.

By Rituparna Ghosh

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