Set Up a Compressed Biogas Plant in India: Licensing Procedures and Cost

The concept of making compressed biogas is becoming popular. The licensing of Compressed Biogas Plant requires various things including obtaining a business license, GST registration, environmental clearance from the State Pollution Control Board, permission for storing gas from the Petroleum and Explosives Safety Organization (PESO), fire permission, construction permission, and LoI from the Oil Marketing Company under SATAT (Sustainable Alternative Towards Affordable Transportation). The licensing of Compressed Biogas Plant involves various permits and order is vital in this regard.

Benefits of a Biogas Plant

Off-take arrangement: Off-take agreement is made with Oil Marketing Companies for fifteen years through SATAT.
Subsidies: CFAs from MNRE, together with subsidies for biomass equipment, lower the total cost of the project.
Priority Sector Lending: Compressed Biogas projects come under Priority Sector Lending Norms of RBI.

Fermented Organic Manure (FOM) is generated as a by-product to give double earnings to the producer.

Eligibility to setup a Compressed Biogas Plant

Entrepreneurs, partnership firms, LLPs, Private/Public Limited Companies in India, FPOs and Cooperative Societies are all eligible applicants.

Land availability, feedstock availability, financial capability for executing the project is more important than any other factor.

Documents Needed for Compressed Biogas Plant

Some important documents include the company's incorporation documents, PAN of the entity, proof of ownership/lease agreement for land, Detailed Project Report (DPR), Board Resolution, Environmental Impact Assessment (wherever required) and financial statements/sanction letter from the bank. Good DPR is critical - Subsidies, financing and Oil Marketing Companies evaluation all depend on it.

Process for Compressed Biogas Plant Setup

Feasibility studies & site selection based on availability of feedstock and proximity of CGD networks
DPR for technology and finance
Expression of Interest(EoI) & Letter of Intent (LOI) from OMC through SATAT
Statutory clearances – PCB environmental clearance, PESO Explosive safety clearance, fire NOC & building plan approval
Closure of Finance with subsidies and Priority Sector Landing (PSL) funding
Construction and commissioning
Commercialization and start of gas supply

Government Authority

Ministry of Petroleum & Natural Gas (MoPNG) implements SATAT whereas Ministry of New and Renewable Energy (MNRE) provides central financial assistance.

Environmental clearance is granted by the State Pollution Control Board, PESO gives explosive safety clearance, building plan approval is provided by the local municipality whereas fire NOC is issued by the state fire department.

Timeline for Compressed Biogas Plant Setup

From feasibility studies to commissioning, the time required is typically 12 to 24 months, which depends on the plant capacity and availability of land, feedstock tie ups and approvals. Parallel running of statutory clearances and Detailed Project Report (DPR) and financial closure ensures that the schedule remains practical.

Costs for Compressed Biogas Plant Setup

There are government costs in addition to project capex and include PCB’s consent to establish (CTE) and consent to operate (CTO), license fees for PESO, building approval fees by municipality and fire NOC charges. As compared to the overall project cost, these costs are relatively less but should be budgeted.

Compliance

Once the plant starts functioning, the plant needs to

Ensure the quality of Compressed Biogas as per BIS standards,
Submit regular environmental reports to Pollution Control Board,
Renew its PESO license,
File annual statutory returns and production and offtake data with OMC as agreed.

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