Introduction
Set Up a Compressed Biogas Plant in India: Licensing Procedures and Cost
The concept of making compressed biogas is becoming popular. The licensing of Compressed Biogas Plant requires various things including obtaining a business license, GST registration, environmental clearance from the State Pollution Control Board, permission for storing gas from the Petroleum and Explosives Safety Organization (PESO), fire permission, construction permission, and LoI from the Oil Marketing Company under SATAT (Sustainable Alternative Towards Affordable Transportation). The licensing of Compressed Biogas Plant involves various permits and order is vital in this regard.
Benefits of a Biogas Plant
- Off-take arrangement: Off-take agreement is made with Oil Marketing Companies for fifteen years through SATAT.
- Subsidies: CFAs from MNRE, together with subsidies for biomass equipment, lower the total cost of the project.
- Priority Sector Lending: Compressed Biogas projects come under Priority Sector Lending Norms of RBI.
Fermented Organic Manure (FOM) is generated as a by-product to give double earnings to the producer.
Eligibility to setup a Compressed Biogas Plant
Entrepreneurs, partnership firms, LLPs, Private/Public Limited Companies in India, FPOs and Cooperative Societies are all eligible applicants.
Land availability, feedstock availability, financial capability for executing the project is more important than any other factor.
Documents Needed for Compressed Biogas Plant
Some important documents include the company's incorporation documents, PAN of the entity, proof of ownership/lease agreement for land, Detailed Project Report (DPR), Board Resolution, Environmental Impact Assessment (wherever required) and financial statements/sanction letter from the bank. Good DPR is critical - Subsidies, financing and Oil Marketing Companies evaluation all depend on it.
Process for Compressed Biogas Plant Setup
- Feasibility studies & site selection based on availability of feedstock and proximity of CGD networks
- DPR for technology and finance
- Expression of Interest(EoI) & Letter of Intent (LOI) from OMC through SATAT
- Statutory clearances – PCB environmental clearance, PESO Explosive safety clearance, fire NOC & building plan approval
- Closure of Finance with subsidies and Priority Sector Landing (PSL) funding
- Construction and commissioning
- Commercialization and start of gas supply
Government Authority
Ministry of Petroleum & Natural Gas (MoPNG) implements SATAT whereas Ministry of New and Renewable Energy (MNRE) provides central financial assistance.
Environmental clearance is granted by the State Pollution Control Board, PESO gives explosive safety clearance, building plan approval is provided by the local municipality whereas fire NOC is issued by the state fire department.
Timeline for Compressed Biogas Plant Setup
From feasibility studies to commissioning, the time required is typically 12 to 24 months, which depends on the plant capacity and availability of land, feedstock tie ups and approvals. Parallel running of statutory clearances and Detailed Project Report (DPR) and financial closure ensures that the schedule remains practical.
Costs for Compressed Biogas Plant Setup
There are government costs in addition to project capex and include PCB’s consent to establish (CTE) and consent to operate (CTO), license fees for PESO, building approval fees by municipality and fire NOC charges. As compared to the overall project cost, these costs are relatively less but should be budgeted.
Compliance
Once the plant starts functioning, the plant needs to
- Ensure the quality of Compressed Biogas as per BIS standards,
- Submit regular environmental reports to Pollution Control Board,
- Renew its PESO license,
- File annual statutory returns and production and offtake data with OMC as agreed.
Penalties for non-compliance
The provision of sub-standard gas may result in rejected deliveries and/or renegotiation of off-take agreements. The failure to have the appropriate PCB permission and PESO license may land you in problems, with a closure order or even prosecution in accordance with the Explosives Act. This may result in losing already provided subsidies.
Why choose CorpZo?
As a CBG project, you will be handling multiple regulatory authorities – pollution boards, PESO, local government bodies and the OMCs. The CorpZo team is used to this regulatory and sectoral licensing overlap and helps in structuring your entity, drafting DPRs and facilitating approvals without any hassle.
FAQs - CorpZo
- Is there only one single license available for Compressed Biogas Plants?
There are not, rather a group of licenses which come from different government departments, but not a single composite license as such.
- Who provides the LOI for CBG off-take?
The Oil Marketing Companies (IOCL, BPCL & HPCL) through SATAT scheme.
- How much is the installation cost for setting up a CBG plant in India?
Average installation cost for 2-5 tons/day plant is several crores, even after taking into account the subsidy aspect.
- Who can apply for the Compressed Biogas Plant License?
Individuals, partnership firms, LLPs, companies, FPOs & cooperative societies.
Get started with CorpZo
Do you want to start your Compressed Biogas Plant in India? Our compliance team at CorpZo can help you with licensing, documentation and other processes right through.