The state of Uttar Pradesh rolls out its bioenergy policy with an aim to nurture bio-economy and decrease dependence on fossil fuels. The policy certainly looks promising on paper; however, implementing the policy on ground might be a bit tricky. Let’s take a look at some of the major aspects of the policy and the challenges that wait for the implementation part.
There are 4 key bioenergy constituents of the policy- Ethanol, CBG, biodiesel, and bio-coal. The policy eyes at generating as much as 1,000 tons of compressed biogas every day by the year 2026-27, which is certainly great news for companies manufacturing compressed biogas plants.
That’s not all!
4,000 tons of bio-coal and 2,000 kiloliter bioethanol and biodiesel per day is also part of the plan. The body implementing this new policy across the state of the U.P will be UPNEDA- Uttar Pradesh New and Renewable Energy Development Agency. The policy has a subsidy provision of Rs. 75 lakhs per tonne of CBG, Rs. 75,000 per ton of Bio-coal and Rs. 3 lakh per kiloliter of biodiesel. The cap for all subsidies would be Rs. 20 crores per project.
The subsidy can be utilized to set up infrastructure, plant, machinery, and other key aspects including transmission and power supply systems. It cannot be utilized for land costs and administrative building expenses.
Feedstock storage is one of the key areas and the policy very well addresses that aspect. The state’s revenue department offers non-transferable leases at just Rs. 1/acre of land for a maximum period of 30 years to feedstock aggregators and bioenergy plant establishers.
Typically a CBG plant of 10 tons per day capacity needs 10 acres of land for installation purposes and about 25 acres to store feedstock. Speaking of bio-coal plants, one needs 2 acres of land. Similarly, a plant producing 100 kiloliters of biodiesel per day requires 1.5 acres of land.
The policy also includes a 30 percent subsidy by the state government on purchasing equipment with a cap of Rs. 20 lakh. One can avail of the subsidy on buying equipment such as trolleys, balers, and rakers. The scheme aims at encouraging agricultural mechanization as there is a provision of subsidies as high as 40 to 50 percent on particular equipment needed for agriculture. Companies producing biogas cleaning systems welcome the subsidy and call it quite encouraging.
Slow approvals have always been a sore point of India’s government offices. To counter this problem, a project officer will be deployed in each district to make things easy for the investors. The deployment of project officers will also help them get quick approvals from the office of the district magistrate.
For enhanced transparency and an easy application process, an online portal was launched last month (October 15th, 2022). The portal ensures that the district officials understand their responsibility. The aim here is to provide bioenergy project-related clearances well in time to avoid unnecessary delays.
The state nodal agency will shoulder the responsibility of coordinating with key state departments such as animal husbandry, rural development, town development, and agricultural marketing. Whether it is receiving key data for the timely sanctioning of projects or marketing by-products.
Companies producing carbon dioxide scrubber say that the government is taking all key measures to ensure that the oil and gas companies as well as the financial institutions are briefed about the scheme properly. This will also help them get a fair market with equal opportunities to compete. Besides, there will be a district-level committee that would make sure economic viability remains intact at all times and feedstock supply chain management is taken care of.
The committee is also going to shoulder the responsibility of establishing proper coordination between farmers, bioenergy plant owners, and feedstock aggregators. To facilitate better communication a mobile application will also be developed.