Industry body Indian Biogas Association (IBA) has demanded a host of incentives including a dedicated Rs 1.4 lakh crore 'Biogas-Fertilizer Fund' that aims to promote the use of organic fertilizers for improved soil and human health.
It said the key to accelerating the Bio-CNG/CBG (compressed natural gas/biogas) industry's growth lies in crafting pro-biofertilizer policies.
This includes favorable regulations, tax exemptions, financing incentives, and accessible credit options, with a spotlight on fermented organic manure, it noted.
Finance Minister Nirmala Sitharaman will present an interim budget for financial year 2024-25 on February 1.
In a pre-budget memorandum submitted earlier this month to the finance ministry, the IBA has proposed to set up a new 'Sustainable Biogas Plant Fertilizer-Based Cultivation Programme' (SuBiCulP) with a dedicated Rs 1.4 lakh crore fund for five years.
This all-encompassing initiative, based on SATAT (Sustainable Alternative Towards Affordable Transportation scheme) like policy for organic manure, aims to secure organic fertilizers for improved soil and human health, it explained.
The IBA has suggested defining a framework by the concerned Ministry for the procurement of biomass at a FRP (Fair Remunerative Price), which needs to be worked out based on cost and markup.
In order to arrive at a rational pricing of the FOM (Fermented Organic Manure) or any organic fertilizer under consideration, it is suggested to holistically consider a nutrient-based (i.e. N, P, K, and organic Carbon) valuation approach to appropriately determine the market price of the FOM.
In order to be a competitive option for end-usage of FOM by farmers, the IBA suggested a 'floor market price' at par with the Urea Retail Prices (presently Rs 242 per 45 kg bag), i.e. approx. Rs 5.0-5.5 per kg (exclusive of taxes).
The market development Assistance (MDA) of Rs 1.5 per kg should be realized over and above the floor market price by the FOM producer, it said, adding that the floor market price should also have additional leeway to accommodate for additional transportation charges.
The IBA has also suggested extending city gas distribution pipeline infrastructure for compressed biogas for a 5 per cent blending possibility.
The budgetary allocation for grid connectivity of the majority of the upcoming CBG plants is roughly estimated to be Rs 2,500 crore (at Rs 3,500 per meter for roughly 10 km of laying per project).
The IBA also suggested that the government should earmark Rs 3,000 crore for Credit Guarantee Scheme for upcoming compressed biogas projects.