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The Green Shift: The Low Carbon Transition of India’s Oil and Gas Sector

  • 24 May 2023

Recently a report titled "The Green Shift: The Low Carbon Transition of India’s Oil and Gas Sector," was released by the Energy Transition Advisory Committee (ETAC) under the Ministry of Petroleum and Natural Gas (MoP&NG).

The report emphasizes the role of compressed biogas (CBG) in addressing the country's energy deficit and reducing emissions.

Key findings of the report are:

  • CBG as an Alternative to Imported Fossil Natural Gas: India faces a significant deficit in natural gas supply, relying heavily on imports. CBG, derived from various waste and biomass sources, can serve as a viable alternative to imported fossil natural gas, offering nearly net-zero emissions and enhancing energy security.
  • Current Status of CBG Plants: As of March 2023, only 46 out of the planned 5,000 CBG plants under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme have been commissioned in India. However, the industry is gaining momentum, with 4,090 letters of intent issued to stakeholders.
  • India's Gas-Based Economy Goals: The government aims to increase the proportion of gas in the energy mix from the current 6.5% to 15% by 2030, establishing India as a gas-based economy.
  • Policy Recommendations: The report suggests several policy measures to incentivize the CBG sector, including exempting CBG transportation through natural gas pipelines from charges for ten years, implementing a 5% CBG mandate for natural gas marketing organizations, and targeting a 10% blend of CBG in natural gas by 2030.
  • Feedstock Supply Challenges: The lack of a reliable and consistent supply of feedstock poses a major challenge to establishing CBG plants. The report recommends the Ministry of Agriculture take responsibility for biomass management, supported by state-level policies and initiatives to promote biomass clusters and decentralized storage facilities.
  • Financial Incentives and Institutional Framework: To attract private investment, the report suggests providing financial incentives such as improved access to credit, accelerated depreciation, long-term land leases, and tax holidays to the CBG sector.
  • It also highlights the importance of establishing a coordinated institutional framework and promoting research and development (R&D) through collaborations with domestic institutions