Reliance Industries Limited and DBS Bank India collaborate to promote Compressed Biogas project.

Mumbai: India produces a significant amount of agricultural residue which is usually burnt in the absence of required processing infrastructure and logistical support. The agricultural residue supply chain has so far been unorganised as farmers and aggregators have not been adequately incentivised and financed. However supportive schemes such as the Guidelines for Crop Residue 2020 (revised in 2023) and solid waste management rules under the Swachh Bharat Mission have laid the ground for creating a new value chain of energy. Reliance Industries, identifying this as an important element in their net zero road map, has plans to invest across the country to produce CBG as an alternate to imported CNG and other fossil fuels making India a prominent source of bio-fuel.

Though the technology for CBG has evolved, commercialisation requires new infrastructure and value chain engagement involving farmers across the states. In addition to being an alternative fuel to meet the growing domestic demand for gas, it also benefits the local agricultural economy of India by providing farmers with an additional revenue stream and helping them avoid penalties linked to the burning of residue. Reliance has planned to set-up around 100 CBG plants over the next 5 years which would consume more than 5.5 million tonnes per annum of agricultural residue and organic waste and lead to projected reduction of nearly 2 million tonnes of carbon dioxide emissions annually.

The CBG industry is highly fragmented in nature and predominantly dependent on agriculture that is affected by seasonal variations. These modalities required DBS Bank India to introduce significant customisations to the standard supply chain financing model to meet the requirements of the project. The financing will enable the ecosystem development for vendor partners to aggregate agri-residue as inputs for the Reliance Compressed Biogas production plants across India. The funding structure will ensure that the logistics are designed in a way that this new stream remains competitive and achieves enhanced commercial scale.