RIL plans to spend Rs 5,000 crore on Compressed Biogas Plants (CBG)

Reliance Industries Ltd (RIL) is planning to set up more than 50 compressed biogas (CBG) plants in the next two years at a cost of over ₹5,000 crore, according to two oil and gas industry executives aware of the development.

At RIL's annual general meeting last August, chairman Mukesh Ambani had announced plans to set up 100 CBG plants in five years. CBG is a green fuel produced from waste or biomass sources. It has properties similar to compressed natural gas (CNG) and can be used for automotive, industrial and commercial uses.

"RIL has tendered out over 50 compressed biogas plants to be set up in the next two years. It will shortly be floating a tender for the remaining plants," said one of the executives. "The tenders have been given out for technology as well as engineering, procurement and construction."

The retail to oil refining conglomerate has also revised the target on the number of CBG plants to 106 from 100, this person added.

RIL did not respond to an email sent on February 19 seeking comment.

Each plant, the people said, would have a feedstock processing capacity of 250-500 tonnes a day, with CBG production in the range of 10 tonnes to 20 tonnes per day. The estimated investment in a 10-tonne-per-day plant is around Rs 100 crore.

RIL's in-house team would be sourcing the feedstock for the plants. The company has also been in discussions with multiple sugar mills for sourcing sugarcane press mud and feedstock for CBG production, the people said.

"India produces nearly 230 million tonnes of non-cattle feed biomass, most of it contributing to air pollution. Within a short span of one year, we have become India's largest bio-energy producer based on our indigenously developed technology," Ambani had said at the AGM.

RIL has already set up two CBG demo units at its refinery facility in Jamnagar and has commissioned the first commercial-scale CBG plant at Barabanki in Uttar Pradesh.

Through its CBG units, RIL aims to consume 5.5 million tonnes of agro-residue and organic waste, mitigating nearly 2 million tonnes of carbon emissions, and produce 2.5 million tonnes of organic manure annually. This would result in a reduction of about 0.7 million tonnes per annum of imported liquefied natural gas.

These CBG units will also help RIL scale up the retailing of CBG and bio-CNG (purified form of biogas) at the Jio-BP fuel retail outlets shortly. Jio-BP outlets are set up by Reliance BP Mobility Ltd, a joint venture between RIL and British energy major BP Plc.

"We are adding a lot of (fuel) stations. CBG alone will see 200 (station) additions," Harish Mehta, CEO of Reliance BP Mobility, had told ET on the sidelines of the Indian Energy Week in Goa early this month. According to Mehta, the retailed CBG will be 95% pure.