There appears to be a definite anomaly in OMCs’ offtake price for bio-CNG (for which crop residue can be a feedstock) as compared to that offered for 1G bioethanol or biodiesel. This matter requires serious consideration by the MoP&NG and the earliest revision of bio-CNG offtake rates as well as issuing ‘bankable’ offtake agreement for 15 years, to facilitate low-cost project financing.
Task forces made recommendations on farm waste to advanced biofuels.
By Kolluru Krishan & Deepak Gupta
Come September, with monotonous regularity, the discourse on stubble burning starts, reaching a crescendo in October, till Diwali crackers provide an alternate discourse, and then the north-west winds blow away the pollution as well as the topic. More regrettably, the discourse is largely on 24×7 TV or the social media, with an emphasis on ‘instant solutions’, with people tending to pontificate or sensationalise rather than reason. This is not to say that there have not been serious deliberations, nor that solutions have not been formulated, but, we venture to suggest, with inadequate involvement of non-biased stakeholders. The purpose of this article is, hence, to articulate issues as well as suggest actionable programmes for addressing the problem of stubble burning, comprehensively and sustainably.
We feel more than a twinge of regret as, during the co-author’s tenure as the Secretary, the Ministry of New and Renewable Energy (MNRE), a decade ago, ‘task forces’ were constituted to evaluate techno-economic viability, as well as develop business models, for farm waste to energy, with ‘stubble burning’ being the focused area.
Regrettably, not much fructified from these efforts. The Central Electricity Regulatory Commission (CERC) issued tariff orders for biomass gasifier/biogas power, which became inconsequential with solar and wind power tariffs declining to 33% that of biomass power. The MNRE supported ‘pilot projects’ of manure to bio-CNG. Task forces made recommendations on farm waste to advanced biofuels. It was only in 2018 that these morphed into the Galvanising Organic Bio-Agro Resources Dhan (GOBAR-DHAN) scheme and the National Policy on Biofuels, albeit with lacuna related to offtake agreements and financing instruments, which is impeding capacity creation.
The issue: Paddy stubble poses major challenges in north India, as the quantity is humongous and the collection window is minuscule, necessitating mechanisation with a high degree of efficiency and efficacy. With the availability of wheat straw for cattle fodder, farmers have no incentive to collect the stubble.
In 2019, governments of Punjab and Haryana announced Rs 2,500 per acre as bonus to small farmers who avoid burning stubble, but there was negligible implementation in 2019 or 2020, for reasons that need no enumeration. We only flag that annual cost of Rs 2,500 crore (for 4 million hectares of paddy cultivation area) could find better application.
Options for stubble management are, broadly, on-field management, alternate cropping and processing to biofuels. On-field management: It envisages mulching into fields deploying customised machinery. Significant subsidy is available for equipment purchase, but this alleviates only 20% of the cost and farmers are burdened with costs and time for machinery mobilisation and operation & maintenance. Furthermore, mulching carbon-rich stubble impacts soil’s carbon-to-nitrogen ratio, necessitating proper nitrogenous fertiliser management, apart from potential surface accumulation of potassium (which is less mobile than nitrogen). The Punjab Agricultural University (PAU) definitely has solutions, but adoption by millions of farmers requires calibrated implementation and enormous extension services.
Alternate cropping: The country has surplus grains, and grain cultivation has scaled up in Uttar Pradesh, Madhya Pradesh, Chhattisgarh and Bihar. However, Punjab’s farmers, having toiled hard to feed the nation, would not adopt alternate crops without income protection. The option could be cultivation of silage crops (hybrid sorghum, hybrid napier grass, maize). They have a high yield, helping meet the feedstock needs of cattle and biofuels plants, as well as permit part use of farmland for horticulture (with biofuels facilitating cold chain infrastructure).
Processing to biofuels: The full spectrum of solid, liquid and gaseous biofuels would take reams to describe, so we will restrict to commercialised technologies across the full value chain.
Biomass depots: It is essential to undertake on-field baling of stubble, aggregate bales in a depot, and enter into ‘bankable’ agreements for supplies to bio-energy plants. There should be fiscal incentives (capital subsidy from the MNRE and interest subsidy from state governments) that allow green entrepreneurs to function under a commercial framework.
Biomass power plants: The Punjab Energy Development Agency (PEDA) actively supported the biomass power sector, including high feed-in tariff above Rs 8 per kWh, but capacity creation as well as stubble consumption is relatively low. Sharp decline in solar and wind tariffs is a binding constraint. The cost of establishing year-round ‘bankable’ supply chain for paddy straw bales is another deterrent.
Solid biofuels: These comprise briquettes and pellets. Briquettes are fired in industrial boilers or combustors, but the demand in Punjab and Haryana is not high. Pellets can be co-fired in utility-range boilers, and the NTPC has issued Expression of Interest (EoI) for 5 million tonnes of pellets (at the rate of Rs 5,500-6,000 per tonne) for firing in 17 of their power plants. However, investor response has been muted, as the production of pellets is capital intensive, coupled with high energy and operation & maintenance costs, apart from stubble bale costs, for year-round operations. It’s also a moot point as to whether the NTPC can better deploy the Rs 2,000 crore annual incremental cost (for displacing grade E coal by 5 million tonnes of pellets).
Liquid biofuels: These encompass bioethanol, drop-in fuels, bio-oil and bio-methanol. The current focus is on 2G ethanol. Oil marketing companies (OMCs) have announced 12 2G ethanol projects, each rated at 100 kl per day, needing 1,50,000 tonnes/year stubble. The Ministry of Petroleum and Natural Gas’s JI-VAN scheme provides viability gap funding to help meet the blending target of 20% by 2030. However, the impact on stubble burning will be marginal, in view of high capex per lakh tonnes of stubble consumed.
Gaseous biofuels: These encompass producer gas, biogas, green hydrogen, etc. The current focus is on biogas upgraded to bio-CNG, with the co-product being compost. The SATAT scheme by the MoP&NG, announced in 2018, envisaged 5,000 plants, typically rated 3,000 tonnes/year bio-CNG, and consuming about 33,000 tonnes/year of paddy stubble. OMCs have issued multiple EOIs and signed a few hundred MoUs. However, hardly any plants have been commissioned or reached financial closure. There appears to be a definite anomaly in OMCs’ offtake price for bio-CNG as compared to that offered for 1G bioethanol or biodiesel. We present the current offtake prices of OMCs: (a) 1G ethanol from B-heavy molasses: Rs 54.27/l (or Rs 67.8/kg), heat value of 26.5 MJ/kg; (b) biodiesel from used cooking oil: Rs 51/l (Rs 55.4/kg), going up to Rs 58 in year five, heat value of 37.8 MJ/kg; (c) Bio-CNG: Rs 46/kg fixed for three years, open-ended years four to 10, heat value of 53.8 MJ/kg.
This matter requires serious consideration by the MoP&NG and the earliest revision of bio-CNG offtake rates as well as issuing ‘bankable’ offtake agreement for 15 years, to facilitate low-cost project financing. It’s imperative that India adopts a technology-agnostic policy for promoting advanced biofuels. Attractive ‘offtake’ rates for 1G ethanol, laudably, support sugarcane farmers, but they constitute only 4% of the farmer households in India. Processing agriculture residues to bio-CNG and compost will benefit many more farmer households, with manifold collateral benefits that accrue from assured availability of sustainable energy/mobility. Who will bell the cat?
(Krishan is chairman, Green Jobs Skills Council, and Gupta is former secretary, MNRE)