Indian Biogas Association (IBA) has urged the Ministry of New & Renewable Energy (MNRE) to double the central financial assistance under the waste to energy scheme to Rs 950 crore.
The government had earlier allocated a budget of Rs 478 crore.
"Indian Biogas Association has requested MNRE to double the Central Financial Assistance (CFA) to Rs 950 crore under 'Waste to Energy Scheme'," an IBA statement said.
As per the notification issued on February 28, 2020, in 2019-20 from the MNRE, around Rs 478 crore for 257 MWeq was allocated under the CFA grants.
This Rs 478 crore allocation is way less than the CFA/subsidy needed to achieve the envisaged target under the SATAT (Sustainable Alternative Towards Affordable Transportation) initiative, which is aiming to have 5,000 large-scale Bio-CNG/CBG plants, the statement pointed out.
Considering each plant has an average of 5 tonnes/day of bio-CNG output, it would attract a subsidy requirement of approximately Rs 20,000 crore over a five-year period, it explained.
Considering the inflation effect, the CFA amount needs upward revision, it noted.
The IBA is confident that the scheme will soon get the funds and subsidy revival will happen, as per the statement.
The IBA has also suggested that the government can release the funds on a pro-rata basis.
The adverse impacts of the removal of central financial assistance for biogas plants are already showing in India's energy transition, IBA pointed out.
The scheme was continued for the biogas plant, but no fund provision was made for the upcoming projects, it added.
The scheme used to cover as much as Rs 4 crore/MWel.eq (max up to Rs 10 crore per project), which roughly encompasses 15–25 per cent of the capital cost of a typical large-scale bio-CNG project/plant. The ministry should be prepared for this upfront, the IBA statement said.
The biogas industry can help the government reduce Rs 1.1 lakh crore of imports of fossil fuels if the industry gets the right kind of support, the statement quoted the IBA president as saying.
Such support will result in a win-win situation and shall encompass the work done by several ministries, including the MNRE and oil ministry, it added.
With crude prices almost doubling globally and CNG prices rising almost 70 per cent, the importance of producing its own BioCNG/CBG fuel should be of prime importance, IBA said.
