Absolute Ecosystem for Biogas Success: Biofuels Policy Can Be the Game-Changer
22 Oct 2018
Better cooking fuel choices
Energy use, a key indicator of living standards across the world, is also instrumental in raising it. The choice of cooking fuel in households (especially rural) has a huge impact on living conditions especially for women & children. On an average in India, household spending on cooking fuel accounts for around 5-6% of its total expenditure. Factors such as socio-economic (availability & easy access, also determined by household income & price of fuel, education & awareness), culture or lifestyle, and, to a large extent, govt. policies also influence cooking fuel choice. Affordable, reliable & clean energy for cooking is essential not only for reducing health & environmental impacts but also helping women to do more productive work & developing rural economy. Among various fuel options available biogas accounts for the lowest effective greenhouse gas emission; PNG & then LPG are next. An assessment of annual life cycle emissions of various fuels per household per annum is based on the estimation of life cycle emissions, feedstock processing, fuel processing, distribution & cook-stove use. Further, a comparison of the levelised cost of various fuels (non-taxed & not subsidized), annual life cycle emission per household (kg/CO2 equivalent) & extent of in-house air pollution for various cooking fuels suggests that biogas & PNG are the best cooking energy options. Cooking fuels emit substantial amounts of toxic pollutants (respirable particles, carbon monoxide, oxides of nitrogen & sulphur, benzene, formaldehyde & polyaromatic compounds) which contribute to indoor air pollution. In households with limited ventilation common in rural household & semi-urban areas these pollutants could lead to severe health problems. Among the various options available for cooking fuel, firewood & pellet are the most polluting, LPG & kerosene are moderately cleaner, & biogas & natural gas are cleaner fuels for combustion. National level program’s to ensure that most switch to clean cooking fuels have been initiated since the 1980s, NPBD being an e.g. But the program has been hampered by mala fide practices, poor construction material, a lack of maintenance, misrepresentation of achievements & a lack of accountability & follow-up services. Once again, in order to ensure access to clean energy a key focus area for poverty alleviation the govt. launched a flagship programme, PMUY in May’16. With a cumulative target of providing LPG connections to more than eight Cr families. Further, the PNGRB has been holding auctions across cities for distribution of gas for cooking through PNG. However, since conventionally, govt’s have been subsidizing LPG & as such a consumption-based subsidy is not available for biogas & PNG, it has led to a preference for LPG over other cleaner, safer, more cost effective & locally available options (biogas in rural areas). Further, LPG imports along with large subsidies are a drain on govt. resources which hamper the focus on other social development programs.
To promote biogas in rural & semi-urban areas, adopting the service-based enterprise model with suitable resource availability offers a sustainable approach. It will also help self-drive the programme. The model is being successfully implemented in Hoshiarpur, Punjab using a 100 cubic meter biogas plant. The plant supplies clean & piped cooking biogas to 44 households & a school every day. Such models can also generation employment significantly at the grass-root level an important additional benefit of running a biogas programme. However, there is a need to provide financial support & facilitate capacity building in order to promote enterprise-based models for community-level plants. The cost-competitiveness of natural gas (including imported re-gasified LNG) calls for scaling its penetration in urban & semi-urban/rural areas. PNG needs to be promoted in urban areas beginning with the densely populated Tier-I & Tier-II/III cities, making LPG just one of the options to choose from rather than it having an edge over others. For this, the cost of LPG must be set as the upper-cost ceiling & the PNGRB could focus only on the setting up of safety regulations, with distribution rights being given to distributors. To further enable a consumer to freely make cooking fuel choices, consumption-based subsidies need to be replaced with a functional subsidy that is provided on the basis of household income levels & local variables. Possibility of leakages must also be eliminated by ensuring that subsidies of any kind are provided only through direct benefit transfer. Such an approach will provide a neutral thrust & promotion to different types of cooking fuels on the basis of their original virtues. As India takes a long-term view on sustainability & energy security, it is important to create an environment where its citizens are aware of the options & make their energy choices based on the nature of the fuel & not because of socio-economic constraints.
Biofuels policy can be the game-changer
Biofuels policy that will help India’s efforts to cut energy imports & carbon emissions. The policy will also help improve farmer income & has expanded the scope of raw material for ethanol production to include sugarcane juice, sugar beet, sweet sorghum & starch containing materials such as corn, cassava, & damaged grains. This comes in the backdrop of the central govt.’s plan to double farmer incomes by 2022. Farmers are at a risk of not getting appropriate price for their produce during the surplus production phase. Taking this into account, the policy allows use of surplus food grains for production of ethanol for blending with petrol. The policy, which aims to provide financial & fiscal incentives specific to a biofuel type, categorized biofuels as first generation (1G), second generation (2G) & third generation (3G) fuels. The first generation category of biofuels includes bioethanol & biodiesel. The second generation comprises ethanol & municipal solid waste. The third generation includes bio-CNG. With a thrust on advanced biofuels, the policy indicates a viability gap funding scheme for 2G ethanol bio-refineries of Rs. 5,000 Cr in six years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels.
According to the govt., there will be reduced import dependency, given that 10 mn litres of E10 (which contains 10% ethanol) saves Rs28 Cr of foreign exchange at current rates. The govt. aims to develop a Rs1 trillion biofuel economy. This assumes importance given that India is the world’s third largest oil importer, with oil imports increasing by over 25% in FY18 to $109 billion from a year ago. Also, GoI had in Mar’15 set a target of lowering import dependence in oil by 10 percentage points to 67% by 2022, when the country will celebrate 75 years of Independence. Other benefits include a cleaner environment, with 10 mn litres of E10 helping cut carbon dioxide emissions by 20,000 tonnes. With the govt. expecting an ethanol supply of around 1.5 billion litres in 2017-18, there will be a Rs4,000 Cr forex savings & carbon dioxide emission reduction by three mn tonnes. India, the biggest emitter of GHG after the US & China, plans to reduce its carbon footprint by 33-35% from its 2005 levels by 2030, as part of its commitments to the UNFCCC adopted by 195 countries in Paris in 2015. The other benefits include a reduction in 62 MMTs of municipal solid waste generated in the country, infrastructure investment in rural areas & job creation. Cabinet also approved the setting up of a Rs. 5,000 Cr dedicated micro-irrigation fund with the apex rural bank NABARD. The fund will be utilized under the Centre’s flagship scheme, PMKSY, to extend loans to state govt’s for the years 2018-19 & 2019-20. A govt. statement said that the dedicated fund, announced in the budget last year (Feb’17), can potentially bring mn hectares under micro-irrigation facilities, such as the use of sprinkler & drip to increase water use efficiency in farming.
Biofuels in India are of strategic importance as they integrate well with the govt.’s ongoing initiatives, such as Make in India, Swachh Bharat Abhiyan, & Skill Development. Considering the lasting impact this policy can have on India’s renewable success story, we see the various issues challenging the biofuels sector & the new policy can do to bring about change. Lack of govt. support & a decline in the farming sector are major reasons for the decrease. Finally, massive competition amongst biomass suppliers has taken a toll on the market. Our country has a massive potential of waste to energy. For a stat, our metros collectively produce close to 60 MT of waste per day. Even if the rest of the urban & rural areas contribute only 40 MT per day, we still contribute 100 MT per day of waste which gets land filled & erodes our soil. Soil erosion has a direct impact on agri. Additionally, it will pollute & expose us to decay, which could soon become a pandemic for the society. Hence, it’s imperative for us to gear up & protect ourselves by providing lucrative & environmental waste to energy projects. Renewable energy combined with waste to energy has a potential to address at least 30 percent of the country’s power demand. Let’s brace for a revolution. It depends on factors such as the type & size of the plant. We have commissioned a 50 ton/day biogas plant, which feeds on the fruit & vegetable waste, for a sum of approximately Rs. 50 mn. Organic waste plants differ from that of an inorganic waste plant such as plastic, metal & e-waste. This also includes the cost. & since India is a populous country, there is already a massive deficit in handling the waste it produces. Hence scalability will be enormous going forward.
Though the current central govt. has introduced very good initiatives such as Swachh Bharat Abhiyan, Gobhar Dhan, Smart Cities etc., movement on the individual state level has been dismal. Hence, we need to be more aggressive in implementation of these initiatives. Two reasons come to mind: the lack of awareness among farmers about the potential of agri waste, & the lack of govt. interest to encourage non-conventional fuel sources. Other reasons include an overall decline in agri, & the commercialization of agri lands. The biomass sector has taken off already, but needs more support. This can happen by encouraging farmers to grow such crops & make it financially viable for the farmers to create the biomass briquettes. Currently, none of the farmers see a profit, which is discouraging. Additionally, banks should offer attractive loans for new plants. Finally, the govt. should create a feasible pipeline for organizations in biogas & waste to energy sector. Ethanol bio refineries can be a viable option considering latest govt. incentives. Planned implementation is very much required for this to be a success.
It appears progressive & encouraging. No doubt, if it’s implemented in planned & strategic manner, Biofuels policy will be a game changer. The Importance of biofuels must be first be imparted to our country’s population. Farmers must be educated & incentivized to take up initiatives. On the business side, the ease of conducting business must be worked on. Some examples include: Financial institutions must give loans for waste to energy projects. Govt. should encourage organizations which are into biofuel & waste to energy projects through tax concessions, monetary aid, & by implementing encouraging business policy. If these things are addressed, biofuels can be a game changer in the country. Ultimately, it is not just about fuel economy, but also about waste management & environmental concerns (which in turn affects our health). Global warming issue due to the combustion of fossil fuel pushes the world to produce renewable & environmental friendly fuel from sustainable feedstock. There are several measures on different levels to reduce the global warming including clean energies from wind, solar, & biomass. There are different aspects in bringing these technologies into a reality including development of technology, economic feasibilities, environmental sustainability & finally, support from the govt. in the form of effective policies & public awareness. Adequate R&D efforts could overcome all the factors but only an effective policy could drive those efforts to reality. Therefore, in this connection this review initially addresses the present state of energy demand, progression of biofuel sources & the bottlenecks in micro algal biofuel production & commercialization. The biofuel policies are essential to change the world's dependence on fossil fuels for a better tomorrow. Hence, this review addresses the salient features of National Biofuel Policy of India that helps in regulating the biofuels production & their marketing. As a part of Policy implementation, govt. of India introduced several schemes & programs in last two-decades, which includes mandate blending of ethanol with gasoline, diesel with biodiesel, for the future clean energy vision, & incentivizing bio-based products/fuels. In addition, participation of both federal & state govt’s for clean energy initiatives, capital investments & tax credits were described in detail. Many policies lack easy outreach among public & industries, which needs marketing by the govt. that secures a clean energy future in India. Though India is in the process of evolution, it might be quite difficult to enact a dedicative legislation to deal with the challenges of biofuel marketing. Therefore, recent initiatives & scope were summarized in this review for future endeavors.