Subsidy withdrawal will Impact India’s self-sufficiency in Fossil Fuels

Indian Biogas association condemns the Government’s decision on withdrawal of subsidy /CFA of all kinds of biogas plants- all categories- small, medium and bigger. The decision will impact almost 50 million farmers looking for energy security and natural farming along with the Government’s 5000 plant set up target under SATAT Scheme and will jeopardize Indian dream of becoming self-sufficient in fossil fuels.

Indian biogas industry can help Government reduce INR 1.1 lakh crore imports of fossil fuels, if the industry gets the right kind of support, which is impossible to achieve without Government’s support.

SATAT, an initiative of Ministry of Petroleum and Natural Gas (MoPNG) under the bio-fuel policy, targets to facilitate setting-up 5000 plants. This means subsidy requirement is of approximately INR 20,000 crores (considering each plant of avg. 5 Tons/day bio-CNG output capacity), over a five-year period.

The recently lapsed and withdrawn Central Financial Assistance (CFA) scheme for setting-up Biogas/CBG/bio-CNG projects- the scheme used to cover as much as INR 4 crores/ MWel.eq. (max.  up to INR 10 crore per project), which roughly encompasses 15-25 % of the Capital Cost of a typical large-scale bio-CNG project/plant. Also, as per the notification dated 28.02.2020, in FY 2019-20, around INR 478 crores for 257 MWeq. was allocated under the CFA grants. Unambiguously, this allocated amount was way too less than the CFA/subsidy needed to achieve the envisaged target under the SATAT initiative. The impact is well seen now in terms of withdrawal of CFA.