CBG blending at 1.7% in H1; pipeline connectivity key to achieving 3% target

Why in the News

Compressed biogas (CBG) made up only 1.7% of piped and vehicle gas sales in the first half of this fiscal year, short of the 3% blending share mandated for the year. The Petroleum and Natural Gas Regulatory Board (PNGRB) says sales must accelerate in the second half, and that linking plants to gas pipelines is the key to getting there.

What is the CBG blending mandate?

1. What CBG is: CBG is biogas from organic waste, cleaned and compressed to natural gas quality. It can be mixed into the same supply, like ethanol blended into petrol.
2. What is blended: The mandate covers domestic piped natural gas (D-PNG) supplied to homes and compressed natural gas (CNG) used as vehicle fuel.
3. Rising targets: The mandated blending share rises to 4% next year and 5% the year after.
4. The takeaway: The mandate demands a larger CBG share every year, so a shortfall now makes each later target harder to meet.

How far behind is India this year?

1. First-half sales: CBG sales were 115.9 million standard cubic metres (MMSCM) from April to September, against combined CNG and D-PNG sales of 6,800 MMSCM.
2. Full-year requirement: Combined consumption of the two fuels is projected at 13,600 MMSCM for the year, so CBG sales must reach 408 MMSCM to meet the target.
3. Second-half push: That requires an additional 292.1 MMSCM in October to March, about two and a half times the first-half volume.

Why are CBG plants running below capacity?

1. Low utilisation: India’s 210 functional CBG plants run at an average of just 44% of their capacity.
2. Pipeline advantage: Plants with a pipeline connection, or one being built, use 65-69% of their designed capacity. A reliable pipeline gives a plant a buyer every day of the year.
3. Plants without links: 247 of the 308 plants under construction have no plans for pipeline connectivity.
4. Regulator’s view: The PNGRB has stressed connecting CBG plants to gas pipelines to assure offtake, meaning a steady buyer for the gas produced, and better use of installed capacity.

Challenges

1. Missing pipeline links: Most plants now being built will start without a pipeline, so they risk the same low utilisation as existing plants.
2. Uncertain offtake: Plants without an assured daily buyer cannot run steadily, which leaves installed capacity idle.
3. Steep catch-up: The second half must deliver far more CBG than the first, with the target rising every year after.
4. Investment at risk: Idle capacity cuts plant revenues, which can deter fresh investment in CBG.

Way Forward

1. Pipeline-linked approvals: Require new CBG plants to plan pipeline connectivity before construction begins.
2. Connect existing plants: City gas distribution companies should give priority to linking functional plants to nearby pipelines.
3. Regulatory oversight: Bring CBG blending into city gas networks under PNGRB oversight, as the PNGRB (Amendment) Bill, 2025 proposes.
4. Half-yearly tracking: Track blending against the target every half year so that shortfalls are caught early.

Conclusion

The blending mandate is falling short less for want of plants than for want of buyers those plants can reach. Second-half sales, and whether plants under construction get pipeline links, will show if this year’s target and the higher ones after it are within reach.

Back2Basics: Petroleum and Natural Gas Regulatory Board (PNGRB)

1. Legal basis: Set up under the Petroleum and Natural Gas Regulatory Board Act, 2006. Appeals against its decisions go to the Appellate Tribunal for Electricity (APTEL).
2. Downstream scope: It regulates refining, storage, transport, distribution, marketing and sale of petroleum products and natural gas. Upstream exploration and production sit with the Directorate General of Hydrocarbons (DGH).
3. City gas role: It authorises entities to run city gas distribution (CGD) networks and determines pipeline network tariffs.
4. Common carrier access: It ensures equal, non-discriminatory access to pipelines and liquefied natural gas (LNG) terminals.

Matching Previous Year Question

“[2020] According to India’s National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels? 1. Cassava 2. Damaged wheat grains 3. Groundnut seeds 4. Horse gram 5. Rotten potatoes 6. Sugar beet Select the correct answer using the code given below: (a) 1, 2, 5 and 6 only (b) 1, 3, 4 and 6 only (c) 2, 3, 4 and 5 only (d) 1, 2, 3, 4, 5 and 6 ANSWER: (a)”