Organic agriculture critical for generating indigenous, clean fuel

  • The bio-CNG technology holds the promise of producing an indigenous fuel and organic fertiliser, while tackling the problems associated with straw burning. But on the ground, there are too many hurdles in adopting this circular economy-based concept.
  • Collection of paddy straw in the short window between paddy harvest and wheat sowing is an expensive and challenging task.
  • Highly subsidised chemical fertiliser industry stands in the way of fermented organic manure, a CBG by-product, cutting into the revenues of this nascent industry.

An early November evening in Punjab’s Sangrur district in 2022 was different compared to the last few years. The sky was clear; there was no chill in the air, and no smoke to disrupt these sights. Stubble-burning incidents in Punjab, notorious for smog and air pollution in Delhi NCR (National Capital Region), were down by 30% in 2022. The maximum contribution of farm fires to the daily PM2.5 levels in Delhi was 34% in 2022, as against 48% in 2021.

Sangrur, a hotbed of intensive wheat-rice agriculture in Punjab and Chief Minister Bhagwant Mann’s home constituency, topped the charts regarding farm fire incidents. But in June, the district became home to an innovation aimed at producing Bio-CNG or compressed biogas (CBG). It is a technology that converts agricultural residue into highly concentrated methane that can replace compressed natural gas (CNG) mined from the earth. In June 2022, India’s biggest CBG plant, and the only one on paddy straw, was commissioned in Sangrur. The plant can produce 33 tonnes of CBG and 600 tonnes of organic manure daily from a feedstock of 1.10 lakh tonnes of straw annually. Verbio, a German company, has set up the plant at the cost of Rs 20.3 million on 20 acres of land in the district’s Lehra Gaga block.

A farmer in Punjab working on the field.
A farmer thrashing rice crop in the field. Punjab’s Sangrur district is a hotbed of intensive wheat-rice agriculture in the state and also tops the chart for farm fire incidents.  Photo by Ravleen Kaur/Mongabay.

India imports 85% of its crude oil, making it the third largest importer in the world. It has the potential to produce 80,000 tonnes per day (TPD) of CBG, replacing 50% of the current diesel use in transport, says a study by IIT Guwahati. However, the study says that only 0.5% of the CBG potential in the country is currently being utilised. “CBG is a circular technology where the by-product of agriculture becomes an input for a fuel, and its by-product nourishes back the soil,” said Ram Chandra of IIT Delhi, who has been working on improving the technology since 2015. Unlike other renewable energy sources, CBG can be produced round-the-clock and employs more people than the solar and wind energy industry, say several experts.

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As many as 42 more CBG plants are planned in Punjab, which will utilise 1.7 million tonnes of paddy straw annually to produce 495 TPD CBG, says PEDA.  Punjab produces 19 million tonnes of straw every year, so there is no shortage of feedstock. According to the Punjab Energy Development Agency (PEDA), there is potential for 250 more projects. “The state government is giving incentives such as no registration charges, stamp duty on buying land, and exemption on electricity duty. They are also lending the Panchayat land on long-term lease to companies who do not want to buy land,” said MP Singh, the Director of PEDA. Under its dedicated CBG programme, Sustainable Alternative towards Affordable Transportation (SATAT), the central Ministry of Petroleum and Natural Gas gives a subsidy of Rs 40 million for every 4.8 TPD plant.

A straw baler at work in Punjab's paddy field.
A baler machine at work. According to PEDA, 495 tonnes of CBG will be produced in Punjab per day using 1.7 million tonnes of paddy straw annually in the 42 planned CBG plants. Photo by Ravleen Kaur/Mongabay.

Despite this, the progress of CBG projects in the state has been rather slow. Only one plant is operational, and two more are expected to start production in this financial year (March 2023). The main reasons include high capital costs, challenges of collecting and transporting paddy straw, and the sale of fermented organic manure (FOM). “CBG industry can only progress if the idea of balanced crop nutrition is promoted,” said Sanjeev Nagpal, who owns Sampurn Agri Ventures Private Limited, a biogas-based power plant in Fazilka district.

What is CBG?

CBG is an upgraded version of biogas that is used as cooking fuel in many parts of India. It can be made from different feedstocks such as agricultural residue, cow dung, press mud from sugarcane factories, and biodegradable garbage. To make CBG from paddy straw, first, the straw is spread in the field to dry after the harvest. This process is called teddering. It is then raked in rows and tied into 450 kilograms of round bales. “The bales are fed into the pre-treatment area where the straw is shredded and mixed with water and cow dung for microbial breakdown,” Pankaj Jain, plant head of Verbio, said. “The mixture is then fed into the main digester tank, which ferments in anaerobic conditions for a month. The biogas produced is collected from the top of the digester and piped to the gas cleaning area.” The gas, upgraded to 95% methane, is compressed in cylinders and filled in vehicles at CNG stations, while the leftover slurry can be used as manure.

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Under SATAT, oil marketing companies are supposed to pick up the gas produced in these plants and issue a letter of intent (LOI) to companies that want to set up a CBG plant. Based on these LOIs, the companies apply for central financial assistance (CFA) and bank loans. SATAT, when announced in October 2023, targeted setting up 5,000 CBG plants till 2023 to produce 15 million tonnes of CBG. Less than 3,700 LOIs were issued until February 2023, but only 38 plants are operational.

“The CFA was discontinued in 2021 and only resumed in November 2022,” said Yogesh Sehgal of PES Renewables Private Limited, which has nine CBG plants planned in Punjab. “For entrepreneurs to venture into a new technology, subsidy matters. The banks offer loan packages for CBG plants, but they keep changing conditions like requirement of collaterals, etc.”

CBG production is also linked to the market demand for CNG. An IOCL official, on condition of anonymity, said that there are 11 CNG outlets in Punjab, and there is no significant difference between petrol and CNG prices at present, so the consumer demand is not as much. “The government must promote CBG by converting public buses from diesel to CBG, setting up model districts where vehicles use maximum CBG and organic fertiliser generated by it. Only then will such clean technologies be mainstreamed.”

Potential of CBG from Paddy straw

Paddy straw generated in India: 160 million tonnes
Ratio of paddy yield to straw: 1:1.5
One tonne CBG requires: 8-9 tonnes straw
FOM produced from 1-tonne input of straw: 1.75 tonnes

The short window challenge

Randhir Singh is a farmer from Khai village, two kilometers from the Verbio plant. Seven years ago, he stopped setting fire to his two-acre field, but in 2022, he had no choice.

In 2021, he gave his straw to Verbio during their trial run period. “I registered in 2022 too. They sent rakers to make piles, but nobody showed up after that,” Randhir said. “I called them, but when they didn’t turn up, I had to set it on fire.” He added that this wasted a lot of his time and money.

The 15–20-day period between October and mid-November, when paddy harvest happens, and the rabi wheat is sowed, is crucial for both the farmer and CBG companies. CBG companies have to collect and store their feedstock for the entire year during this period.

Paddy is harvested with a combine harvester that works optimally only when the crop still has some moisture. Otherwise, the machine breaks the grain. This means the leftover straw still has moisture. The farmer either burns this straw or mulches it in the soil.

Straw burning in Punjab's paddy field.
Straw burning on a paddy field in Punjab. Photo by Ravleen Kaur/Mongabay.

The CBG company requires farmers to use a reaper machine to cut the straw, after which they take over. Four machines, teddering equipment, a raker, a baler, and a loading trolley are involved in the process. The baling happens a week after spreading the straw in the field to dry. “Dry straw is very important because bales with wet straw start rotting from inside, and the methane is lost to the atmosphere,” said Pushpinder Singh, field supervisor at Verbio. “Last year, we lost 3,000 bales to moisture.”

However, one week is too long for a farmer. “Drying the straw means the land underneath is drying up too, and one cannot sow wheat in completely dry soil,” said Balkar Singh, a farmer in Khandewal, a village one kilometre from the Verbio site. “Once they take the straw, we will have to irrigate the field again and wait 15 more days to attain the requisite soil moisture for sowing wheat. So, 3-4 weeks are lost along with an additional cost of irrigation in this water-starved region, so it does not work for most farmers.”

“They go to the fields where land holdings are large. But for small farmers, the only option is to light the matchstick because they can neither afford expensive mulching machines nor does the company pick up the straw from him,” said Jagsheel Singh, who set fire to his two-acre leased farm this season. Pushpinder said this is because smaller fields sometimes do not have adequate passage to take the machines inside.

A tredding machine in Punjab.
A tredding machine. Four machines – tedder, raker, baler, and loading trolley is used by CBG companies during the process of sourcing straws from farmers. Photo by Ravleen Kaur/Mongabay.

Ashish Kumar, Managing Director at Verbio India, said that the cost of collecting, transporting, and storing one tonne of straw is Rs 3,000. “All these machines are imported and have a life of only 5-6 years.”

Now aggregators are emerging into the picture. Karan Kaushal, director of Farm Gas, which has an undertrial 12 TPD plant in Khanna, said, “There are very few aggregators in Punjab, and the demand for straw is increasing. They were selling us at Rs 1,500 to Rs 2,000 per tonne right at harvest time, but we might now have to buy mid-season at a hiked-up rate of Rs 3000.”

In 2022, the state government did not impose any fines for stubble burning, says Dinesh Nagpal, a supply chain management head of Ever Enviro India Ltd that has 11 CBG plants proposed in Punjab. He said this made things difficult for them. “Earlier, the government would put a red mark on the land deeds of farmers who burnt straw,” he said. “Fearing this, they would even pay us to collect straw from their fields. In 2022, the government relaxed all the rules.”

No market for manure

A CBG plant derives 20-25% of its revenue from FOM. While inaugurating the Verbio plant in October 2022, Bhagwant Mann announced manure produced from the plant would enrich 2,150 acres of farmland. SATAT envisaged the production of 50 million tonnes of manure from CBG plants by 2023. The Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985, commonly called the FCO, was amended in 2021 to include FOM and Bio-slurry from CBG plants. In May 2022, the Ministry of Chemicals and Fertilisers issued an order to fertiliser companies to mandatorily uptake FOM from CBG plants under the integrated nutrient management scheme.

Despite this, Verbio has 20,000 tonnes of FOM lying on its premises, which cannot be sold. “Buying manure from CBG plants is compulsory, but we cannot take it unless the Punjab Agriculture Department issues them a license,” said JS Brar, senior state marketing manager of the fertiliser company Krishak Bharat Cooperative Limited (KRIBHCO).

Fermented organic manure in a CBG plant compound.
Fermented organic manure pile in Verbio CBG plant. A CBG plant derives 20-25% of its revenue from FOM. Photo by Ravleen Kaur/Mongabay.

“Unless the FOM issue is sorted, companies who have committed to set up plants in Punjab will not come up,” says Ashish from Verbio. For every tonne of paddy straw used in the CBG process, double the amount of FOM is produced, 75% of its content being moisture.

Despite its quality as bio manure, which can help regulate environmental cycles, Punjab has not been able to resolve the obstacles hampering its best use. Underlining its quality, Dr. Ram Chandra, in his 2017 paper, says that spreading FOM is better than direct mulching of straw.

To market FOM, CBG companies need three things. They need to meet FCO specifications, get a license from the state Department of Agriculture, and get dosage recommendations for various crops from PAU, Ludhiana. PAU is testing the manure in its research fields. “We will be able to share the results only after 1-2 crop seasons, which means at least two years,” said AS Dhatt, Director of Research at PAU.

Verbio’s manure does not meet the FOM specifications defined by the FCO on two parameters: moisture and carbon to nitrogen (C: N) ratio. A higher C:N ratio means the manure has not decomposed well. Carbon and nitrogen-rich material should be balanced to get a narrow C:N ratio. “Paddy straw has a high C:N ratio because of its dry matter,” said GV Ramajaneyulu of the Centre for Sustainable Agriculture, Hyderabad.

“A well-decomposed manure will release its nutrients in 2-3 months, but one that is not digested well can take up to six months. Adding dung, kitchen waste, or green biomass can adjust the C: N ratio,” said Ramajaneyulu.

“Nitrogen comes from protein, and straw does not have protein. In Agri-residue-based CBG plants, we can never meet the FCO’s C:N ratio requirement unless we enrich the manure. So, either the FCO should be broadened to include this aspect or a new category of FOM from agri-residue-based CBG plants should be introduced,” said Kumar. He adds, “The Department of Agriculture will not give us a license unless we meet specifications.”

Gurvinder Singh, the Director of the Department of Agriculture, Punjab, said that they could give the license, but FOM will not be able to enter the market unless PAU gives dosage recommendations. “Even if the farmer uses it, FOM cannot replace all other fertilisers, so why will a farmer increase his cost.”

Kumar feels the pressure from the strong chemical fertiliser lobby is responsible for the government’s inaction. “This manure is significantly small in comparison to millions of tonnes of chemical fertiliser that is getting sold. But it can become big in the future if the government really wants to promote organic farming and gives subsidies to it equivalent to chemical fertilisers,” he adds. In budget 2023, the government has allocated Rs 1.75 lakh crores towards chemical fertiliser subsidy.

“When the Green revolution came, agri extension workers gave us free urea and DAP. Why will a farmer not buy organic fertiliser today if they are available at the same rates as chemical fertilisers. But, it will make him break away from the rut of intensive chemical farming and save Punjab,” said Jugraj Singh, a farmer in Ramgarh village of Sangrur.

Banner image: The bio-CNG technology holds the promise of producing an indigenous fuel and organic fertiliser, while tackling the menace of straw burning. Photo by Ravleen Kaur/Mongabay.

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