Industry Gives Thumbs-Up To Finance Minister’s “Financial Assistance” For Biomass Collection in Interim Budget

Economic development is a manifest of pragmatic decisions that benefit the country in true sense and not mere populist announcements for short-sighted gains. Hats-off to Nirmala Sitharaman for staying away from populist throwaways in the Interim Union Budget presented in this election year and focusing on paths that would bolster sustainable and equitable economic development in India. With regards to the biofuels sector – an inalienable segment of renewable realm that fosters circular economy – Nirmala Sitharaman has promised “Financial Assistance” that will be provided for procurement of biomass aggregation machinery to support ‘biomass collection.’

The feedstock supply side is the weakest link in the biofuels sector according to experts. The introduction of the new financial program is anticipated to provide a much-needed boost to the supply side, thereby significantly enhancing the overall development of the biogas sector. In response to the financial assistance scheme outlined in the Union Interim Budget, industry stakeholders express optimism about its long-term benefits for the biogas sector.

“Budget Announcement Addresses Supply Chain Bottlenecks”

Suhas Baxi, Co-Founder and CEO, BiofuelCircle, feels very optimistic of the government’s intent to alleviate one of the most significant chokepoints that has been slowing down the widespread adoption of biofuels in India.

He says that technology and knowledge for biomass production happens away from the fields in semi-urban areas. This increases transportation costs where farmers get little or no value for the waste produced in his farms and makes it unviable for him for long term adoption. A CBG plant requires vast quantities of feedstock throughout the year and presently there is a severe constraint owing to the challenges involved in collecting the agri-waste from the source and transporting it to the plant.

“If this enrichment of agri-waste into biomass-based fuel happens closer to the source (fields), the transportation expenditure is substantially curtailed. Such activities will significantly enhance the market value of the waste, which will now be sold as biomass,” notes BiofuelCircle CEO.

He also adds that setting up such processing units is capital intensive, and is not an option for all farmers. For biomass to grow into a sizeable sector, it is imperative to empower farmers with the knowhow and finances to set up and run these biomass processing factories.

Suhas Baxi says, “The Finance Minister’s mention in the Interim Budget 2024 of providing financial assistance for the procurement of biomass aggregation equipment addresses one of the biggest bottlenecks in the green energy supply chain. This will now help create strong rural enterprises focused on the bioenergy sector.”

Baxi also held that BiofuelCircle’s Biomass banks will act as a catalyst for biomass entrepreneurship in rural areas as it links the offtake with eager buyers.  According to him, this will also lead to a creation of employment opportunities for the rural population.

“Sustainability-plus-Opportunity To Cash In Rs 50,000 Cr Business”

Mumbai based Biofuels Junction has emerged as a key player in the feedstock supply segment in the biofuels sector. Founder and Director Ashvin Patil mentions that a significant challenge addressed in the budget pertains to large-scale collection of stubble, particularly the capital-intensive process involving balers. India generates 500 million tonnes of agri-residue presenting a business opportunity of around Rs 50,000 crore. Unfortunately, nearly 200 million tonnes of this resource remain unused, often leading to environmentally detrimental burning practices.   This underscores the untapped potential for converting agricultural residues into biofuels.

Ashvin Patil opines, “The budget announcement by the Finance Minister of financial assistance for biomass aggregation machinery outlines a crucial initiative to address this issue and unlock the economic & environmental benefits of converting agricultural residues into biofuels. The focus on transforming agri- waste into biofuels not only contributes to sustainable waste management but also aligns with the larger vision of promoting green growth and reducing carbon emissions in the country. The policy will also help farmers generate income from agri-waste, give a boost to the rural economy and promote rural entrepreneurship.”

“Proactive Approach By Govt; Instills Confidence In Industry”

Nandan Singh Bisht, Promoter of Farmwatt Solutions believes that the anticipation for advancements in the biofuels industry has been on the rise in recent years and the financial assistance scheme holds the promise of fostering a conducive environment for the growth of the industry.

“The high technology gap in the biomass collection & supply is mainly due to the high costs associated with the generation and adoption of biofuels. The technology and infrastructure necessary for the efficient collection of biomass at the farm levels are currently cost-prohibitive. Addressing this challenge requires significant innovation and concerted efforts to make the technology more affordable, lightweight, and widely distributed at the farmer level. Government’s financial support will expedite the development of cost-effective and accessible technologies, thereby driving the overall success of biofuels adoption,” says Bisht.

He is of the view that the Financial Assistance should adopt a comprehensive approach to incentivize and sustain the entire supply chain in the biofuels sector. This holistic support is essential for the sector’s growth and long-term sustainability.

According to the Farmwatt Solutions promoter, the new scheme instills confidence among stakeholders. “The proactive approach demonstrated in the budget sets a positive tone for what can be expected in the near future. It not only acknowledges the challenges faced by the biofuels sector but also indicates a commitment to addressing these challenges promptly.”

“Now detailed guidelines and transparent criteria for the successful rollout of the financial assistance scheme should be done so that all involved parties –banking institutions to regulatory bodies at all levels – have a clear roadmap and defined objectives. A deeper dive into the specifics is necessary to dispel any ambiguities and to guarantee that the initiative meets its transformative potential,” adds Nandan Singh Bisht.

“Holistic Approach Towards ‘Waste to Wealth’ Mission”

Mahesh Girdhar, MD and CEO, EverEnviro Resource Management Pvt Ltd, feels happy about the reiteration by the government for the mandatory blending of CBG into CNG and PNG that would not just reduce dependency on traditional fossil fuels but also promote the efficient recycling of organic waste into valuable resources.

“Moreover, the launch of new schemes for bio-manufacturing and bio-foundry, along with financial assistance for biomass aggregation machinery procurement, reflects the government’s holistic approach towards promoting green growth and supporting ‘Waste to Wealth’ mission,” adds Girdhar. He notes that overall, the budget reinforces the Government’s commitment to a sustainable energy transition through concrete policies and incentives for the biofuels industry.

For promoting green growth, Finance Minister Nirmala Sitharaman said that a new scheme of
bio-manufacturing and bio-foundry will also be launched. This will provide environment friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs.