UP’s Bioenergy Policy 2022

In news: Uttar Pradesh recently launched its Bioenergy Policy 2022 to boost bio-economy and reduce dependence on fossil fuels.

About the policy:

• The policy highlights four bioenergy constituents: Compressed biogas (CBG), ethanol, biodiesel and bio-coal, a carbon-neutral fuel from biomass waste.

• It sets a highly ambitious target to generate 1,000 tonnes per day (TPD) of CBG, 4,000 tonnes per day of bio-coal and 2,000 kilolitre per day of bioethanol and biodiesel by 2026-27.
• Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) is the nodal agency for implementing this scheme across the state.
• The scheme provides a subsidy of Rs 75 lakh per tonne of CBG, Rs 75,000 per tonne of bio-coal and Rs 3 lakh per kilolitre of biodiesel, with a cap of Rs 20 crores.
• Units can use this subsidy for plant and machinery, infrastructure, construction, power supply, and transmission system-related works, excluding administrative building and land costs.
• Each tehsil in the state is to have at least one bioenergy plant, which means a minimum of 350 bioenergy units across UP.
• A 10 TPD capacity CBG plant generally requires 10 acres of land for installation and 25 acres for feedstock storage. A 100 TPD capacity bio-coal plant needs two acres of land and a 100 kilolitre per day biodiesel plant needs 1.5 acres of land.
• The scheme was established to boost agricultural mechanization in the nation and increase inclusivity.

Key takeaways:

• Electricity tariffs and tax exemptions:

• 100 per cent electricity charge waiver for ten years

• Stamp duty and sale deed registration fees waiver
• no development charges

• Land on non-transferable lease @Re 1 per acre for a maximum of 30 years
• A 5 km approach road connecting it with the main highway will be constructed, if an investor infuses Rs 50 crores or more in a bioenergy plant.
• Incentives on equipment

• Subsidy under the Sub-Mission on Agricultural Mechanization (SMAM) scheme.
• 30 per cent subsidy (max Rs 20 lakh) on purchasing equipment
• North-eastern states, the subsidy is 100 per cent, going up to a maximum of Rs 1.25 lakh per user.

• UPNEDA’s Bioenergy Online portal for single window clearance

• for easy application and improved transparency.
• directly file and monitor the progress of their applications.
• build pressure on the district officials to clear bioenergy project-related regulatory clearances in a time-bound manner

• Coordination among state departments

• to help potential investors
• facilitate necessary approvals from the district magistrate’s office.
• collaborate with other state departments to receive relevant data for sanctioning future realistic projects
• better marketing of products

• A district-level committee will ensure that bioenergy plants remain economically viable and every investor gets a level playing field
• Manage feedstock supply chain and ensure right costing and convince farmers of a unanimous price of the feedstock with a long-term contract and ensure that the payments are transferred within 15 days.

Challenges:

• Firstly, a continuous and long-term feedstock supply below a fixed price is needed to ensure the right functioning and healthy economic factors for the bioenergy plant.
• Secondly, oil marketing companies shall refrain from procuring the CBG on a best endeavours’ basis as it leads to financial instability for the manufacturer when his product is left unsold
• Lastly, despite having the same fuel characteristics, there is a large disparity in the CBG and CNG procuring prices that needs to be addressed.

Source: Down to Earth

Previous Year Question

Q.1) According to India’s National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels? (2020)

1. Cassava
2. Damaged wheat grains
3. Groundnut seeds
4. Horse gram
5. Rotten potatoes
6. Sugar beet

Select the correct answer using the code given below:

1. 1, 2, 5 and 6 only
2. 1, 3, 4 and 6 only
3. 2, 3, 4 and 5 only
4. 1, 2, 3, 4, 5 and 6