CBG blending at 1.7% in H1; pipeline connectivity key to achieving 3% target
India has a target of blending 3% CBG into D-PNG and CNG by the end of current fiscal, 4% in 2027-28 and 5% in the subsequent year.
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Context
According to the , India achieved a 1.7% blending of compressed biogas (CBG) with domestic piped natural gas (D-PNG) and vehicular compressed natural gas (CNG) in the first half of the current fiscal year. To meet the mandated 3% target for the full year, a significant acceleration in sales is required in the second half. The has identified a lack of pipeline connectivity as the primary bottleneck, noting that plants connected to pipelines utilize 65-69% of their capacity, compared to a national average of just 44%.
UPSC Perspectives
Economic
The was introduced to reduce India's reliance on imported natural gas and promote a circular economy. The phased implementation targets 1% blending in FY 2025-26, rising to 3% in FY 2026-27, 4% in FY 2027-28, and 5% from FY 2028-29 onwards. However, the current data reveals a classic infrastructure bottleneck. The highlights that out of 308 plants under construction, 247 lack plans for pipeline connectivity. This lack of assured offtake (a guaranteed buyer) severely impacts the financial viability of these projects, leading to low capacity utilization (the percentage of a plant's potential output that is actually being realized). Without pipeline access, independent producers face logistical challenges in transporting gas, making their operations less profitable and discouraging further investment. The regulator's call for larger entities to invest in captive plants and increase procurement emphasizes the need for a robust market mechanism to support the .
Environmental
The promotion of is a crucial component of India's energy transition strategy and its commitments under the goals to reach net-zero emissions by 2070. is produced through the anaerobic decomposition of waste or biomass sources like agricultural residue, cattle dung, sugarcane press mud, and municipal solid waste. By utilizing these waste streams, production addresses two major environmental challenges: reducing reliance on fossil fuels and providing a sustainable solution for waste management, thereby mitigating the harmful effects of stubble burning and landfill emissions. Furthermore, the byproduct of the production process, Fermented Organic Manure (FOM), can be utilized as a bio-fertilizer, promoting sustainable agriculture. Therefore, overcoming the infrastructure hurdles highlighted by the is essential not just for meeting blending targets but for maximizing the environmental benefits of the initiative, which aims to set up 5,000 plants.
Governance
The role of the is central to the development of the natural gas market in India. Established under the , its mandate includes protecting consumer interests, fostering competitive markets, and regulating the refining, processing, storage, transportation, distribution, marketing, and sale of petroleum, petroleum products, and natural gas. In the context of the , the 's observation regarding pipeline connectivity underscores a gap between policy intent and infrastructural reality. To bridge this gap, proactive governance is required to facilitate coordination between producers and City Gas Distribution (CGD) entities. The regulator's suggestion that larger entities establish their own blending targets and invest in captive plants points towards a need for a more decentralized and collaborative approach to achieving national targets, ensuring that the necessary infrastructure keeps pace with policy mandates.