Indian Biogas Association demands Rs 90 per kg fixed rate for procurement of compressed biogas

The Indian Biogas Association (IBA) urges the government to set the biogas procurement price at Rs 90 per kg, recognizing its environmental benefits. The current price, linked to CNG rates, fails to reflect biogas's green credentials.

The Indian Biogas Association (IBA) is advocating for a fixed procurement rate of Rs 90 per kg for biogas from oil and gas marketing companies, urging the government to consider its environmental advantages and help boost sector growth.

The IBA plans to submit this proposal, along with additional recommendations aimed at enhancing the biogas sector, to the newly appointed Union Minister of New and Renewable Energy, Pralhad Joshi.

IBA Chairman Gaurav Kedia explained that while the retail price of compressed biogas (CBG) aligns with compressed natural gas (CNG), its procurement price is linked to the retail selling price of CNG. With CNG prices in New Delhi at Rs 75-80 per kg, the procurement price of CBG drops to Rs 59 per kg, excluding GST.

"This pricing structure fails to acknowledge the inherent environmental value of CBG. Ideally, CBG should fetch a premium of Rs 10-15 for its green credentials, totaling around Rs 90 per kg," said Kedia.

The SATAT (Sustainable Alternative Towards Affordable Transportation) programme, if successfully implemented, could reduce India's import bill by approximately USD 15 billion, about 10 percent. SATAT aims to promote CBG as a green transport fuel.

The current discounted offtake price of CBG, pegged to the retail price of CNG, is counterintuitive given the urgent need for climate change mitigation, Kedia added. He emphasized the necessity for a more rational and efficient pricing mechanism to incentivize biogas producers and propel industry growth.