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"Government Mandates Biogas Blending : Stocks Set to Benefit"

Updated: Dec 19, 2023

As per a government statement, starting from April 2025, a 1% blend of biogas in gas for automobiles and household cooking will be implemented, with plans to elevate this blend to approximately 5% by 2028.


The introduction of CBG Blending Obligation (CBO) aligns with the objective of reaching net-zero emissions by 2070. The initiative aims to boost both production and consumption of Compressed Biogas (CBG) nationwide. Its primary goals encompass driving CBG demand in the city gas distribution sector, reducing reliance on imported Liquefied Natural Gas (LNG), conserving foreign exchange reserves, fostering a circular economy, and contributing to achieving net-zero emissions.



The CBO anticipates encouraging an investment of approximately INR 37,500 crores and facilitating the establishment of 750 CBG projects by 2028-29, according to the statement.

Until the fiscal year 2024-2025 (April 2024 to March 2025), CBG blending will remain voluntary. However, the mandatory blending obligation is slated to commence from the fiscal year 2025-2026.


2 stocks that can benefit from biogas blending :


Reliance


Reliance Industries (RIL), India's top company by value, is reportedly in talks with sugar mill operators to secure sugarcane press mud—an essential ingredient for producing compressed biogas (CBG), as per an Economic Times report


Government Mandates Biogas Blending : Stocks Set to Benefit

In September, RIL Chairman Mukesh Ambani revealed ambitious plans to set up 100 CBG plants in the next five years. These upcoming facilities are anticipated to utilize 5.5 million tonnes of agricultural residue and organic waste. More recently, speaking at the 7th Edition of Bengal Global Business Summit in Kolkata on November 21, Ambani highlighted that the conglomerate has emerged as India’s leading bio-energy producer.


Praj Industries


The company initially began as an ethanol plant supplier and has since evolved into a global entity specializing in environmental, energy, and agri-process solutions. The company's product portfolio spans BioEnergy, Praj HiPurity Systems, Critical Process Equipment & Skids, Wastewater Treatment, and Brewery & Beverages.


Praj Industries operates manufacturing facilities in Sanaswadi, Urawade, Wada (all in Maharashtra), and Kandla (Gujarat). Additionally, it is in the process of establishing a manufacturing unit near a major port with an investment of Rs. 100 crores, slated to commence commercial production by Q4FY24.

Expansions


The company has achieved significant milestones by commissioning its First 2G Ethanol BioRefinery at IOCL Panipat, leading to the elimination of approximately 320,000 MT of CO2 annually. Furthermore, it has also successfully initiated a commercial-scale CBG plant based on rice straw at HPCL, Badau.


Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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