Jio-bp, a fuel retail joint venture between Reliance Industries and British oil major BP, will shortly begin retailing compressed biogas (CBG) and bio-CNG (B-CNG), both of which can be used in place of compressed natural gas in CNG-powered vehicles.
To begin with, the company will retail CBG and B-CNG at its outlets in western India, and later expand to other outlets, people in the know said.
“Jio-bp is actively working on setting up CBG/bio-CNG retailing at its collocated fuel retail outlets and our first outlet is likely to come up soon,” Jio-bp told ET in an emailed response.
The company said aligned with its sustainability policies, Jio-bp will convert more and more customers to B-CNG.
“We are in advanced stages of integrating our supply chain network for supply security,” it said. “Rates will be governed under the contracts to be executed with all the CBG suppliers on a long-term basis considering end-to-end benefits to all stakeholders in the value chain.”
Compressed biogas is a green fuel produced from waste/biomass sources. When this mixture is further purified and processed, it is called bio-compressed natural gas or bio-CNG. Both have calorific value similar to CNG and can be used for automotive, industrial and commercial uses.
India currently has nearly 30 CBG plants under operation. Industry players expect the sector to attract more than USD 2 billion investments in the next 5-7 years.
Last August, ET had reported that Reliance Industries is planning to invest up to INR 600 crore in setting up 40 million metric tonne per annum (mmtpa) of biogas plants in Uttar Pradesh and Gujarat. Early this month, RIL chairman Mukesh Ambani said the company will start a new bio-energy business in Uttar Pradesh.
One of the critical factors for pricing of CBG is availability of feedstock at right prices on a sustainable basis. Currently, in many parts of country, CBG is being sold at par with CNG, which is in line with the policy promoted by the Centre’s Satat, or Sustainable Alternative Towards Affordable Transportation, scheme.
Under Satat scheme, the government announced an ambitious plan of producing 15 million metric tonnes of CBG per annum, which is roughly 40,000 tonnes per day. To achieve that, considering an average plant size of 8 tonnes, 5,000 plants are needed in the country.
Indian Oil Corpo ation (IOCL) is the nodal agency for CBG plant development in the country. The state-owned refiner has signed initial agreements with companies including Adani Gas, Torrent Gas, and Petronet LNG among others for 1,550 CBG plants. IOC has begun the of CBG in select cities under the brand name IndiGreen, and has issued LOIs for setting up 325 plants for supplying 0.78 mmtpa of CBG.
Biogas contains up to 60% methane, 40-45% carbon dioxide, and traces of hydrogen sulphide. It is purified to remove carbon dioxide and hydrogen sulphide gases to prepare CBG, which is then transported through cylinder cascades or pipelines to retail outlets.
In the FY24 budget, finance minister Nirmala Sitharaman said the government will introduce a 5% CBG mandate for all organisations marketing natural and bio gas. CBG has also been provided a central excise duty exemption when blended with natural gas.
“Introduction of 5% CBG is a welcome step by the government to ensure supply security assurance, encourage energy security, less import of fossil fuel-based energy, like LNG in addition to taking the nation towards Atmanirbhar Bharat,” Jio-bp added in the emailed response.
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