From Butter to BioCNG: Amul marketer gets future ready

Amul doesn’t want to remain merely a part of the white revolution but aims to be an active participant in India’s go green story. After tasting success with its BioCNG pilot project in Banas Dairy, Gujarat, it is now striving to become a key player in representing the circular economy.

Four new plants are coming up in Banaskantha with an investment of ₹230 crore, said Jayen Mehta, Managing Director of Amul marketer Gujarat Cooperative Milk Marketing Federation (GCMMF), in a quick chat with businessline said.

The timing seems to be perfect as the Union government has just announced the mandatory blending of Compressed Bio-Gas (CBG) in CNG (transport) and Piped Natural Gas (domestic) segments of the City Gas Distribution sector. In a statement on Saturday, the Ministry of Petroleum & Natural Gas said that the “CBG Blending Obligation (CBO) will promote production and consumption of CBG in the country.”

Hardeep Singh Puri, Minister of Petroleum & Natural Gas and Housing & Urban Affairs, said that this is a major step towards enhancing the use and adoption of CBG. The National Biofuels Coordination Committee (NBCC), chaired by Puri, on Saturday, announced the introduction of phase-wise mandatory blending of CBG in CNG and PNG segments.

The key objectives of the CBO are to stimulate demand for CBG in the CGD sector, substitute imports for Liquefied Natural Gas (LNG), save on Forex, promote a circular economy, and assist in achieving the target of net zero emission etc., the statement said.

According to the statement, the CBO will be voluntary till FY 2024-2025 and mandatory blending obligation will start from FY 2025-26. The CBO shall be kept as 1 per cent, 3 per cent, and 4 per cent of the total CNG/PNG consumption for FY 2025-26, 2026-27, and 2027-28, respectively. From 2028-29 onwards, the CBO will be 5 per cent. A Central Repository Body (CRB) will monitor and implement the blending mandate based on the operational guidelines approved by the Petroleum & Natural Gas Minister.

“The pilot project, exemplified by the Banas BioCNG Plant initiated by Banas Dairy, has been successfully running for the past three years. It has supplied clean fuel to approximately one lakh CNG vehicles in the district and has become a prime example of a project benefiting multiple stakeholders,” Mehta said.

“This initiative not only provides farmers with an additional income source but also offers clean fuel and organic fertiliser. It helps reduce the government’s financial burden on chemical fertiliser subsidies and import of fuel. Processing over 3.4 crore kg of dung underscores the positive and sustainable impact of this project on both the agricultural and energy sectors,” he said.

Mehta had first shared this green initiative at the businessline Changemaker awards held recently.

On what kind of investment is required to set up a plant, he said it is similar to other initiatives like — land, plant, machinery, etc. Other investments required are: Raw material collection infrastructure, development and R&D for the production of gas at a cheaper cost by providing maximum benefit to farmers, farmer awareness of the fertiliser, and market development for the gas and fertiliser, he elaborated.

But how will this fuel be flown into the market? To this, Mehta said, “The introduction of BioCNG into the market follows a two-fold strategy. Firstly, BioCNG, being similar to CNG, can seamlessly be utilised as an alternative fuel for CNG vehicles, as exemplified by its current usage in Banas Dairy’s Dama Plant. This direct application in existing CNG vehicles ensures a smooth integration into the market. “

“Secondly, aligning with government mandates, there will be subsequently a mandatory introduction of a five per cent CBG mandate for all organisations involved in marketing natural and biogas. This regulation will create a structured framework for the inclusion of biogas into the market, promoting its adoption across various sectors.”

These combined approaches aim to establish BioCNG as a viable and regulated alternative in the market, catering to both existing vehicle fleets and the evolving regulatory landscape, he added.

On challenges that can come in way, he said: “Several challenges are anticipated in the implementation of the BioCNG project: like creating awareness among farmers about the benefits of organic products, such as the fertilisers derived from the BioCNG production process, poses a significant challenge. Educational initiatives and outreach programs will be essential to inform and engage farmers in adopting these organic alternatives.”

Also, the existing substantial subsidies on chemical fertilisers may act as a barrier to the widespread adoption of organic fertilisers produced from BioCNG plants, he said adding “Overcoming this challenge involves demonstrating the long-term benefits and efficiency of organic alternatives, potentially through targeted government policies or incentives.”

On the success of this initiative, he said, “Milk producers of five villages poured Gobar of 3.46 crore kg as on date in last 2.5 years. Cattle owners of one milk producers’ society of Banas dairy Namely Sherpura has earned ₹1,03,00,000 in the last 2.5 years. One dung pourer, Rajaji Magnaji Rajput of Yavarpura village, earned ₹5,88,000 from cow dung in last 2.5 years.”

Source: The Hindu Businessline Nov 26th 2023