The Minister of Petroleum & Natural Gas and Housing & Urban Affairs has announced the introduction of the CBG Blending Obligation (CBO). The decision was made during a meeting of the National Biofuels Coordination Committee (NBCC), chaired by the Union Petroleum Minister. A press release on the announcement was issued on November 25, 2023.
The CBO aims to stimulate demand for CBG in the City Gas Distribution (CGD) sector, with a focus on mandatory blending in the Compressed Natural Gas (CNG) transport and Piped Natural Gas (PNG) domestic segments. The move is expected to contribute to import substitution for Liquefied Natural Gas (LNG), saving in foreign exchange, promoting the circular economy, and aiding in achieving the target of net-zero emissions.
The Minister highlighted the key outcomes of the CBO, stating that it is projected to encourage investments of approximately Rs. 37,500 crores and facilitate the establishment of 750 CBG projects by the fiscal year 2028-29.
Key decisions and highlights of the CBO include:
- Voluntary implementation until FY 2024-2025, with mandatory blending obligation commencing from FY 2025-26.
- Gradual increase in blending percentages: 1%, 3%, and 4% of total CNG/PNG consumption for FY 2025-26, 2026-27, and 2027-28, respectively. The blending obligation will reach 5% from FY 2028-29 onwards.
- A Central Repository Body (CRB) will monitor and implement the blending mandate based on operational guidelines approved by the Minister, PNG.
In addition to the CBO, discussions took place on promoting the production of ethanol from maize, with a focus on making it a prominent feedstock in the coming years. The Ministry has initiated efforts, in collaboration with the Department of Agriculture and the Department of Food and Public Distribution (DFPD), to develop high-starch-yielding maize varieties, improve maize DDGS quality, and expedite the registration of new seed varieties with high starch content.
In a related development, the committee announced targets for Sustainable Aviation Fuel (SAF/Bio-ATF) blending percentages in ATF (Aviation Turbine Fuel). The initial indicative blending targets are as follows:
- 1% SAF indicative blending target in 2027 (Initially for International flights)
- 2% SAF blending target in 2028 (Initially for International flights)
These targets were set based on feedback from stakeholders, including the Ministry of Civil Aviation (MoCA), Niti Aayog, Oil Marketing Companies (OMCs), and others. The capacities of upcoming Sustainable Aviation Fuel plants and projected ATF sales were also considered in determining these targets.
