The transfer of machinery and equipment within G20 partners must be made easy for the success of the biofuel alliance. This will help G20 nations reduce their dependence on fossil fuels
The global economies are at a juncture where they can break at any moment, considering inflation, slowing job markets, fluctuating stock markets, defaulting banks, and rising prices of commodities. The Russia-Ukraine war has further catapulted the pain into our systems. Everyone on this planet needs a reprieve from these unprecedented man-made vagaries. With Prime Minister Narendra Modi planning to propose a biofuel alliance, India can again show the world how to come out of this slumber.
The biofuel alliance can generate an opportunity worth $ 500 billion in the next three years for G20 countries. One of the biggest contributors could be biogas, which can generate an opportunity of US$ 200 billion, considering the lower investment required compared to other energy generation options and the easy availability of raw materials. Bioenergy, in principle, has the potential to completely replace fossil fuels, especially to decarbonise the transport sector.
In 2016, the G20 adopted a voluntary action plan on renewable energy, which committed members to increasing the share of renewable energy in their energy mix. India tremendously increased its share of renewable energy in the overall energy mix and grew at a CAGR of roughly 22 percent in the last 6 years. India has ramped up solar energy 20-fold in the last decade. During this period, solar energy and wind energy roughly grew at a CAGR of 38 per cent and 30 per cent, respectively.
As per Ministry of New and Renewable Energy (MNRE), one of the important biofuels, biogas, and CBG productions in the country is 1151 MT per day. With the minor push to the sector, it can go up to 1750 MT per day by 2025 in the next few years, even with conservative estimates. So far as biomass availability is concerned, there is a tremendous availability of potent biomass in India, and harnessing all of these as the CBG plant’s feedstocks shall lead to a whopping production capacity of 170,000 MT of CBG per day, good enough to replace one-third of the crude oil imports or three times the imported LNG. The average cost for each biogas plant is $ 4.25 million, and with the government's target of 5000 biogas plants, this is a huge opportunity worth more than $ 200 billion.
The MNRE further aims to achieve 500 GW of installed electricity capacity from non-fossil sources by 2030. Presently, a total of 172.72 GW of capacity from non-fossil fuel sources is up and running in the country as of December 31, 2022. This is a combination of 119.09 GW of renewable energy, 46.85 GW of large hydro, and 6.78 GW of nuclear power capacity. This has a share of 42.26% of the total installed generation capacity in the country, i.e., 408.71 GW as of December 2022.
India has been at the forefront, always taking initiatives towards a sustainable environment and energy production. In line with the vision of the present government, Prime Minister Narendra Modi is expected to propose a biofuel alliance during the G20 meeting starting on September 8, 2023. The G20 can help promote bioenergy in several ways:
Investing in research and development is expected to increase by at least 20%. An initial investment of US$ 100 billion in financial support will be required to trigger the biofuel industry, five billion for each G20 partner in the next three years. This anchor investment will have further multiplier effects on private investments and the production of biofuels, especially biogas. Creating a favourable regulatory environment in the G20 countries and sharing technological advancements will be key to the success of this biofuel alliance.
Promoting international cooperation through best practices followed across G20 nations will be key to the success of the biofuel alliance. The transfer of machinery and equipment within G20 partners must be made easy for the success of the biofuel alliance. This will help G20 nations reduce their dependence on fossil fuels; their overall import bill for non-fossil fuels can be reduced by billions of dollars within the next three years, helping them meet sustainable development goals.
Increased energy security and the creation of jobs for each country can be envisaged. Improved air quality and a better environment can save billions in healthcare expenses. The G20 is a powerful forum that can play a major role in promoting bioenergy. By taking the steps outlined above, the G20 can help accelerate the global transition to a clean and sustainable energy future.
(Gaurav Kedia is chairman, Indian Biogas Association.)