Three hours north of Ahmedabad, in one of India’s major dairy hubs, a petrol station has been bustling since early morning with vehicles filling up on fuel that is not only environmentally friendly, but also cheaper than petrol or diesel.
Bio-Compressed Natural Gas from Cow Dung
The fuel is biologically compressed natural gas (CNG) produced from the methane gas in cow dung. The station in Banaskantha district is supported by Suzuki Motor Corp of Japan and Banas Dairy, Asia’s largest dairy cooperative, and supplies fuel to around 600 to 700 vehicles every day.
It’s a small but significant example of how India, a major energy importer, is trying to diversify its fuel sources in the wake of the Iran war. More importantly, it’s tapping into a material that India is already abundant in: cow dung.
According to Srinivas Kasulla, Founding Partner of Tattva Engineering Systems, the Strait of Hormuz crisis has proven that energy security and energy transition are not mutually exclusive objectives. He described compressed biogas as a meeting point for both goals.
Suzuki, Reliance & Adani Also Invest
Automakers such as Suzuki Motor have invested heavily in CNG-powered vehicles, seeing biogas as a way to reduce carbon emissions and increase demand for their vehicles. India’s largest conglomerates, Reliance Industries Ltd and Adani Group, have also invested in biogas production to meet their respective renewable energy targets.
The fuel sold at the station costs around 80 rupees per kilogram, more than 20 rupees cheaper than petrol in some parts of India. This widening price gap is significant for a country that is highly sensitive to fuel inflation.
Challenges to Scale Up Production
However, scaling up projects like the one in Banaskantha to a national scale is far from easy. India currently consumes 190 million cubic metres of gas per day, half of which is imported, while the current level of compressed biogas production is just 0.3 million cubic metres per day.
Lobby group Confederation of Indian Industry estimates that annual compressed biogas production will only reach 2.14 million tonnes by 2030 in the current economic climate, far from the original target of 15 million tonnes per year.
Market Impact
India’s efforts to diversify energy sources reflect a broader global trend, with major energy-importing countries increasingly looking for domestic alternatives to reduce their reliance on imported oil and gas.
For Malaysia, such developments are important to watch as they show how its regional neighbours are coping with the risk of volatile energy prices due to geopolitical tensions such as the Strait of Hormuz crisis. If more major importing countries like India manage to reduce their reliance on imported energy, this could in the long term reduce some of the pressure on global demand for oil and gas.
Key Takeaways
India is developing biological compressed natural gas from cow dung as an alternative fuel to reduce its reliance on imported energy.
The Banas Suzuki Bio CNG project supplies 600 to 700 vehicles per day, supported by Suzuki Motor and dairy cooperative Banas Dairy.
Compressed biogas costs around 80 rupees per kilogram, cheaper than conventional petrol in India.
Current compressed biogas production is just 0.3 million cubic metres per day, far short of the target of 15 million tonnes per year by 2030.
India’s energy diversification efforts reflect a broader global trend of reducing supply risks from geopolitical tensions.
As the global energy crisis due to Middle East tensions continues, efforts like these in India may be an early indication of how energy-importing countries are trying to adapt in the long term.
