The Indian Biogas Association (IBA) is pushing for a comprehensive set of incentives, including the establishment of a dedicated ‘Biogas-Fertilizer Fund’ amounting to Rs 1.4 lakh crore (approximately USD 18.7 billion). The proposed fund aims to promote the use of organic fertilizers, emphasizing their benefits for soil health and human well-being.
Recognizing the pivotal role of pro-biofertilizer policies in accelerating the growth of the Bio-CNG/CBG (compressed natural gas/biogas) industry, IBA has outlined key measures in a pre-budget memorandum submitted to Finance Minister Nirmala Sitharaman ahead of the interim budget presentation on February 1.
The association proposes the creation of a ‘Sustainable Biogas Plant Fertilizer-Based Cultivation Programme’ (SuBiCulP) with the allocated fund over a five-year period. Drawing inspiration from the Sustainable Alternative Towards Affordable Transportation scheme (SATAT), this initiative aims to ensure a consistent supply of organic fertilizers to enhance soil quality and promote human health.
IBA emphasizes the need for defining a procurement framework for biomass at a Fair Remunerative Price (FRP), determined based on cost and markup considerations. To establish a rational pricing mechanism for Fermented Organic Manure (FOM) or any organic fertilizer, IBA recommends a nutrient-based valuation approach, considering nitrogen (N), phosphorus (P), potassium (K), and organic carbon content.
To incentivize farmers to adopt organic fertilizers, IBA suggests a ‘floor market price’ for FOM at a competitive rate of approximately Rs 5.0-5.5 per kg (excluding taxes), equivalent to Urea Retail Prices. Additionally, a Market Development Assistance (MDA) of Rs 1.5 per kg, provided over and above the floor market price, is proposed to support FOM producers. The floor market price should also account for extra transportation charges.
IBA further calls for an extension of city gas distribution pipeline infrastructure to facilitate the blending of compressed biogas, proposing a 5% blending possibility. The association estimates a budgetary allocation of approximately Rs 2,500 crore for grid connectivity of upcoming CBG (compressed biogas) plants, with an additional Rs 3,000 crore suggested for the Credit Guarantee Scheme supporting these projects.
The proactive measures proposed by IBA align with the broader objective of promoting sustainable practices and reducing dependence on conventional fertilizers, contributing to a more environmentally conscious and agronomically efficient agricultural sector. The industry awaits the interim budget announcement to see if these proposals will find resonance with the government’s fiscal policies.