India's 250MMT Biomass: A Greener Energy Opportunity? | EverEnviro CEO Mahesh Girdhar

[Music] hello and welcome you're tune into to this fresh new edition of the climate clock podcast you've been writing it and telling us what you want to know about and that's exactly what we are doing today on the show uh let's welcome our special guest we have with us Mr Mahesh girar who's the MD and CEO of ever and voo Resource Management private limited and of course we'll ask you a lot more Mr gar as to what the company does but you know the discussion around biofuels bio Refinery Waste Management circular economy this is something

which is vital we need to understand it we need to actually practice it as well and your company is one of those which is doing it so let's take a deep dive into this world of Bio gas biofuels and bior refiner and the circular economy as well uh ever in Viro it is largely into producing biog gas am I right what exactly is it and what does it do so let me give you overall business we are engaged in we are into multiple Waste Management streams one of the key where we are investing significantly and

developing value proposition is a compressed biog gas this one vertical we are also have a power generation plant from waste we are also engaged into construction and demolishing Waste Management activity whereby we produce recycled green construction material so uh our currently focus is significantly developing compressed biog gas industry in the country okay so what is biogas and how is it produced because uh we've been having a lot of conversation with listed companies be it the energy companies oil psus they are talking about getting into this what is so what is exciting all these companies in

yourself so much okay so let me simply first of all explain what is compressed biog gas it's called CBG in India it's called renewable natural gas gas worldwide simply speaking CBG is a clean form of energy G or or fuel which is produced from various organic sources it could be Municipal solid waste it could be agricultural residue biomass or it could be in agri-industry waste or it can also be produced from Green energy energy crops specifically which are tar it to produce the bi biomass and and then shifted into and took into producing of CBG

okay now when it comes to CBG CBG has has more than 90% methane inside it right and that's what is a cleaner fuel that can replace any kind of uh any kind of fuel we are using from fossil fuel today it could be natural gas it could be it could be diesel it could be petrol you know I was going to ask you on that if it's methane it is usually said methane is deadlier than CO2 then how is it cleaner then so let's put methane into and CO2 into perspective so when it comes from

environment footprint perspective then we see that methane is about 80 time more potent gas than CO2 it can trap 80 times more energy but the life of methane is smaller than CO2 CO2 stay stays much much longer in the environment however when it comes to its uses potential then methane is into CNG itself right so methane can be you know CBG or CNG can be used against any other any other fossil fuel like Diesel and petrol so from from his application perspective when we produce CBG it goes through different production steps production processes so let

me just give you a little bit uh understanding of how the CBG gets produced so there are five six different parts of the value chain of CBG production first it starts with aggregation of the biomass securing the biomass and again biomass could be coming from organic waste from C piece or it could be from agriculture residue because at the end of the Harvest whatever is left in the field is a residue which either is getting burned or it is not fully utilized it becomes waste or it could be from agroindustrial waste like sugar meal produce

pressmud which is kind of a kind of a methan hazard now all of that gets aggregated is a first step the second is goes through anerobic digestion process it comes to the plant and the plant we actually have a process whereby we are able to feed this we are able to chop it and make it into smaller sizes and then we feed it into large tanks they are anerobic tanks where the enzimatic based biochemical reaction takes place and raw bio gases is produced now this raw bio gas has about 50 to 55% of methane inside

and balances CO2 and other Trace gases like hydrogen or H2S so it goes through a a purfication process whereby we are able to purify the methane bring it to more than 90% level and then it goes through a compression process because it's a large in volume the volume need to be reduced so in the compression process you compress it further either you can supply through the pipeline or you can fill into Cascades and then it is transported once it is reached to the use Point again it gets it it is it is used from the

compressed and that's why it's called compressed biogas okay all right the whole process involves these multiple steps and the critical process into that is anerobic digestion because that's where you are actually you know creating you know you're producing and that the output depends depending on the various feed stock okay so an arobic digestion an arobic digestion so it is a digestion where there it is it is non aerobic so it doesn't have oxygen inside got it and that's why you can process that particular uh raw material that is coming where do you Source uh all

of it from I'm sure it will not be very close it's not in the viscinity so is that a longer process so in terms of let's say where is the biomass available now biomass is spread across it is spread across in the cities because we generate lot of Municipal Solid Waste Municipal Solid Waste has two components organic and inorganic organic is basically which is food waste second is the everywhere in the agriculture wherever you after you harvest the crop there is regid left or wherever there's Agro industry there's regid left so the biomass is spread

across now you need to have economic viability of your project and you need to set up the project where you have a biomass which means that the largely these projects are coming up in rural India is also coming up in the cities where you have a biomass available second requirement for that is you should have off potential which mean there should be market nearby so Market perspective the CBG is an alternate fuel it can replace diesel petrol or natural gas so you need to find Avenues where where there is a marketing potential it's across the

country because we are using using all kind of energy everywhere so this is going into V traffic vular use at CG it is going into pipe natural gas as a replacing LPG at homes okay it is going as a industrial uses for Heating units right so it's a multiple widespread uses so from a use and availability perspective it's it's a impact Nationwide it is actually more more I would say holistic in nature because this is touching millions of people this is touching lives of each individual who is generating waste and we see waste around it's

causing issues around pollution air pollution water pollution and it's not clean environment right more and more than that the me these these waste actually emit either either methane or CO2 I just said that methane is much much more potent potent gas and if if our our waste was supposed to end up in the landfill it would create significant methan emission right by capturing that through this CBG CBG technology and CBG projects we are ble to put waste into right use you know I have so many questions with what you told me right now but first

up when you say it can replace LPG CG so the composition differs a lot when it comes here only in terms of raw material or the final product as well okay so raw material is basically we are using as a feed stock to produce CBG right when it comes to its equivalence to to natural gas it is it can very well replace either diesel or petrol or or CNG it is exactly same like CNG CNG has a methane percentage High it is it has methane so from its usage perspective wherever natural gas is used CBG

can be used okay so it can be a proper alternative there but less polluting and that's why there's so much Focus there because because what's happening when you have fossil fuel when you are extracting fossil fuel you're releasing the greenhouse gas you know into the atmosphere here we are capturing available biomass which will otherwise end up in end up creating creating greenhouse gas emissions we are able to capture and create a very closed loop carbon cycle and that is why it is clean yes because you're using existing resources not asking for more resources from the

environment as well and one more point I Le that from a calorific value perspective CBG has slightly higher calorific value on a per kg basis versus versus the normal fossil fuel like petrol diesel it's as good as CNG I was just going to ask you that is it as efficient as the other fuels because sometimes people are scared to try new fuels or alternative fuels right no no CB CBG is very reliable efficient green sustainable alternate fuel right and and just to give you example that we set up our first project in indor with indor

Municipal Corporation it was inaugurated by the prime minister of India about two years back in the last two years the CBG is getting used widespread it has been used by the buses of indor Municipal Corporation it has been used by by vles through the through the retail points through avantika gas which is the cgd ofer for our for our gas it is being used by Industries like Tata and L&T and it it is already powering million and let's say thousands of houses in IND and how is the pricing versus CNG so when it when it

comes to price perspective uh it's it's a market oriented price right because normally uh there are two mechanism of CBG pricing in India one is under satat mechanism and second is a CBG syn pricing which is defined by Gil so Gail has developed a formula in order to in order to bring a parity you know of the pricing versus CNG and we we are we are driven by the formula and it goes through various pipeline or it goes through Cascade so whenever it is going through pipeline then the cost of compression is lower okay when

it goes to goes through Cascades you know the the the tanks then the cost of is slightly high so it is accordingly compensated so at par let's say with with CNG in terms of in terms of market price and then there is a Formula where the CBG companies get from industry perspective it's again again the industrial uses and it should make economic viability for industry correct but the main point is that it's a green gas know and and the green gas if we see the overall emerging picture with the carbon border treaty mechanism getting getting

kicked off in Europe right this will create further opportunities uh from a green grass pricing perspective so are we seeing that happening you said in indor you you're seeing it in uh Vehicles commercial vehicles or tatas or lnts are using it um what percentage of consumption would it be for CBG say Vis in the overall gas ecosystem so to say what is the percentage of CBG right now and what are the projections how much would it be say two to three years down the line okay so we are very early in the CBG development it's

hardly hardly couple of years when the instit institutionalized CBG development is taking place although biogas as a product is there for last 50 years biog gas has been produced by the farmers used for their own heating unit household use but they have not been purifying it compressed biog gas got lot of lot of attention based on the requirement of managing waste you know and creating green environment hence as we speak today the production of CBG is very small as on today India consumes about 60 million metric ton of of natural gas and it is 6%

of our Energy Mix it is expected then by 2030 uh the natural gas will be about 15% of energy mix which will be close to 150 million metric ton overall requirement we today import about 46% of of that now the way satat has emphasized the growth of the growth potential uh at present there are multiple about 200 projects are coming up it is expected by 2028 as per satat database 7 50 projects would come up okay which would mean that that between uh then there will be significant quantity of CBG available for blending and government

of India also has come up with the blending mandate right from 1% to 5% over the next 5 year so both of these factors together will drive the CBG demand and we expect that from a oral potential perspective if we see biomass available in the country is about 250 million metric ton wow if you theoretically convert that this can actually produce 60 million metric ton of CBG however if even if 10% of that that gets converted it's a significant mix of energy of of of The Greener energy into overall energy bucket of country right and

that is basically the amount that we are already consuming right now so and producing right now at least in the country so that is a big amount and how do you uh is is the uh supply chain very easy when you say raw material pricing or raw materials taking it all from rural area Municipal uh corporations how does the pricing work there is it contractual that you know this is how much you'll get every month and what is the um utilization there so for what amount of raw material what amount of gas is produced G

can be produced fine so there are as I said there are four kind of different feed stock sources right out of the total 250 million metric ton about 70% is agricultural waste m about 15% is waste coming out of the cities and rest 15% is based on the Agro industry and 5 to 10% agroindustry and energy crops are yet to sh yet to take shape in the country so when we talk about its its its potential production uh CBG it varies from 1% to 20% okay animal dung is another s source of that now there

are different models for different feed stock when it comes to municipal waste it gets generated in the city every day correct the urban local bodies contract and tie up through bidding process with with the players and then there is a long-term ofte agreement whereby it is responsibility of the ulb to deliver the waste at our plant and from there we take into the whole process we segregate it further and then then then translate into into CBG so that's a model which is very much let's say let's say daily it gets produced second industry produces daily

where again there's a B2B types and and and we as ever and virro have already tied up with largest of the sugar Mills operators in up where we have a 2025 year long-term agreement okay it's a captive captive use and daily generation happen on agricultural side it is only generated in the end of the harvesting season so it's twice in a year depending on the crop for example pedy which is very prevalent used today is that it is getting burned right it is not even going as a f much correct and that comes once or

twice in a year in North India twice in year south southern part of India so there you need to actually procure it for the full year because your plant had to operate the full full year and it is coming from the farmer field so that's a holistic development whereby the entire value chain value chain is getting developed uh right from mechanization right right from reaping harvesting bailing equipments they're very fluffy in nature you need to compress them and B bailing operation takes place so so multiple levels of let's say intervention are required to actually Harvest

them gather collect and bring to the plant okay what we have been doing is we are creating that capacity on the ground through Village level entrepreneurs we are creating that rural jobs and that the circularity part of that because the newer job being created imagine a farmer who already has a tractor who already has a trolley he would need to only only acquire Acquire The Reaping and harvesting equipment for the for the stro and whereby there are there are support by government of India subsidizing that mechanical equipments and we are enabling that entire ecosystem development

of harvesting and cutting and bailing and taking it to to the our plants so that's the major part of the development the second major part of development is the process part of that Gody okay so that's uh that also goes on to say how much it is dependent on the rural economy how we can modernize it or at least connect it more to ensure uh that we get that bio mass or biof fuel biofuel out of the raw materials there and also that we should segregate ways that makes it easier when we are in urban

Society uh Mr G I wanted to understand how big could this Market be right now and what is the growth prospects that you're seeing considering the conversions that the government is talking about more plants coming up correct so let's divide into let's say three key growth drivers one is whether we have a biomass available answer is yes your 250 million metric ton whether there is a technology technology is there because it's not a complete New Field it has happened in other countries earlier biog gas has been has been produced third do we have a demand

the requirement for natural gas requirement is going up there is there is a demand from that perspective there are policy Frameworks which are going to enable the demand the first policy framework is a creating mandatory pull which is by virtue of this mandatory blending mandate from 1% next year going up to 5% so imagine we are able to take that to 10% level and utilize 10% of the biomass this Market in a near term could be about 10 to 12 12 billion only from gas oh wow that's a big number and longer term longer term

it can go up to 20% because biomass is being used into multiple uses there's a power use there's ethanol use there's a CBG use right so if even we consider 20% gets converted into CBG this could be a market of worth 25 to $30 billion wow that's a big number and by doing that while you are setting up these project there is a significant amount of capex Market gets created at the same time in the range of another 25 to30 billion I was actually going to ask you is it like very costly to set up

a CVG plant how does it work so from an individual plant perspective it's not thousands of crots it is though Capital intensive from a small project perspective because you need to set up large number of plants you can't create one big plant and bring your biomass from 100 200 km it will be not cost effective so it is a capital intensive uh from a perspective of setting up however this Capital requirement is there because these are energy plants and the infra structure need to be robust need to comply to various safety regulations or or the

ESG standards and as well as the the supply supply of these and management of the gas requires significant amount of investment into infrastructure hence the are these are capital incen projects you know people are looking for newer business ideas they are like what can we do in the new energy space uh for somebody who's looking at setting up say a biogas gas plant do you think the break even happen sooner than later what does the business cycle look like here so see this will all depend the size of the plant whether it is a small

size plant midsize plant large size plant this will also depend which technology is being used because there are multiple Technologies available for the for the pre-treatment digestion though for upgradation their standard Technologies it will also depend what kind of feed Stoke you are using because the yield potential of feed Stoke is different and what kind of feed security you have so it there is a value proposition of the industries emerging because there are multiple policies taking shape mandatory oft take is one policy there are capital grants by m& you know about 80 85 lakh part

ton of CVG capacity uh there are capital Grant given by some states like up so these are the incent incentives available as well as there are incentives to to procure mechanical instrument for biogas aggregation okay right and there is also support uh for of organic manure to be uptaken so there is a Consolidated Consolidated support is coming so these allow U allow the investment quite a lot so not only small but multiple large players are entering the field now which are the other players you have tied up with I read about OMC are there other

listed players which are coming to you and talking about okay you set it up for us we can have a partnership here yeah so uh there are multiple players uh if you look into value chain there are players who are into equipments who are into process who are into EPC there are players who are into off and there are player who are developers who are setting up so we are seeing a large interest from small players and large houses like Indian oil BP HP or or interpress gas or even large large IND industrial housing like

Reliance adani or investing into the field so there is a strong interest as well as there are multiple smaller level entrepreneurs in rural India those who have small businesses those who have big Farms or th those who have understanding understanding or network right are able to able to bring capital and are able to put smaller projects so the overall the player varies between small to large but the significant Now growth is coming because large players have entered the game and that's why we are seeing number of new projects coming up other companies is like thermx

bioenergy Solutions is is our joint venture which is into the business of setting up setting of CBG project it's an equipment service provider EPC provider for CBG projects okay you know while we talk about other businesses or stock markets doing well it is a gold mind that we are developing from way so this has definitely that business potential as well and and just not only these players but also there are other value chain value chain players like offers cgd operators right because and as well as working with multiple Agro industry like as I already said

that the tire with the sugar Mills to off take their waste and perod so there is a complete value chain integration you to work with the government with the ulbs with the farmers and develop infrastructure right so there is a development happening in rural India uh more industry gets created and at a larger scale there's pool being created through the policy framework and need for green energy Mr G honestly is this rapid development in rural areas also happening at the same Pace as much as it is needed we have made projections but are people at

as aware and as willing to you know set up that infrastructure connect with companies because usually there's always this uh usually face teething issues with newer industry so to say so what are some of the limitations that you see can be addressed quickly correct now there are certain challenges it's as industri is emerging but as we speak today about 200 projects are in execution so there is real work happening on on the ground now when it comes to challenge perspective the key challenge is still access to sustainable biomass right that's very very important that you

are able to secure biomass and sustainable availability at a sustainable pricing because at the end of the day there has it has to make a commercial sense whereby at present the the lot of waste is getting wasted right if you are able to channelize through the equipment and Machinery you are able to get that and there is a benefit for the farmer as well because his gets cleared fast otherwise burning that or even even managing that is a cost to the farmer and this could be could be a future potential Revenue generator for Farmers as

well so that is one area where where where infrastructure requirement creating Logistics warehousing creating a kind of infrastructure overall for a biomass management we can do more more there second as we said these are capital intensive project the enabling Finance you know Equity debt Finance enabling is an important topic in order to support for the industry development third while there are number of initiatives and F of policies have come already and there active engagement by CBG industry with various Ministries and we're getting good support there however furthermore you know the injection of the CBG into

National Grid and then producing molecules somewhere in rural India and selling somewhere in industry in a city you know if you're able to maintain the green property and accordingly get the benefit of the of the green property would further support the industry growth the last point is that as I said that CBG projects are not only about producing CBG there when you when you are feeding in feed stock you are taking gas out it's about 10 15% balance 85 to 90% is a digestate which gets converted into organic fertilizer okay liquid and solid right and

Indian soils are deficient in in organic carbon 72% of our soils are below 1% of organic carbon what happens because if organic carbon is low organic manure in the in the soil is low this reduces fertilizer use efficiency you're putting more fertilizer we are not able to take full benefit because that get fixed that becomes volatile or gets leeched if you're enhancing organic carbon you are able to utilize the fertilizer better it gives better Iration it has a better water holding capacity hence it enhan is yield and Farmers understand soil Health Improvement is required so

that's the another area where where there are support coming on that but we need to ensure that we are able to create consumption of the fertilizer coming out of these plants organic manure whether it is a solid form or liquid form because then that there is a whatever is coming out of out of the plant you are able to consume it and create a overall overall environment for the flourishing of the industry so there's already a market for that organic fertilizer that you are producing say the 85% which is left or it is difficult to

Market Market that so what's happening that you know if you look into human being we take allopathic we get immediately all right right it's same like happens in nutrition you put NPK nutrients and you see immediate benefit soil health is a bit of a sustainable long-term topic right education about soil Health multiple Farmers understand they when they look into their soil they know my soil has got poor and they used to add fard manure in the past the the availability of fard manure has reduced in the in the in the in the rural India and

we are able to produce this manure which is much better because it comes through anerobic digestion process whereby all harmful microbes are gone and we do further process and it BS a fantastic organic manure which enhances organic organic carbon so there is a need perspective a high need awareness need to be created and whereby initial 57e pool need to be created through policy framework correct and once that is there then farmer will start not seeing the benefit so we whenever whenever farmer you uses farmyard manure any kind of manure he immediately knows that ELD is

going to improve I it's a proven it's a scientific proven it's it's something farmers are aware about that but channelizing the whole ecosystem you know initial support is required you really need a lot of awareness here because you're talking about the benefits but till the time they're actually seen on ground in a bigger way or spoken about in a bigger way maybe people will be a little reluctant but as you said it does have have a lot of benefits and there is some policy push some more is NE and we are already seeing the off

take you know we are already producing liquid and solid fermented manure from our plants we just and and everywhere there is there of te potential okay that is good to know so where does India stand wor say Global markets uh is the uh Compressed biog Gas usage more globally or biofuel usage more globally how does this work so I can talk about CBG they normally called RNG in the worldwide Market uh I'm sorry what is it called it's renewable natural gas renewable natural gas from techology perspective there is already a significant uses in the consumption

in Europe Denmark is using 40% of their natural gas demand is met by by CBG RNG through biomass theyve channelized all cang manure all cang they channelized all agricultural waste into setting up industry and and in including the municipal waste and they set multiple number of plants improve the technology 40% is significant number the next comes in European countries like Germany France or Sweden all of these countries have let's a single digit percentage of uses of of RNG into their mix of mix of natural gas particularly in Germany where they used earlier energy crops and

now realizing that they are now shifting into more into agricultural waste France is already doing the development for last two decades right so a single digit us is already happening in in United States the landfills are trapping methane and they're capturing methane from the from the Landfield and converting it into into into into RNG and it is getting mixed into the National Grid and in all these countries National Grid is unable to actually inject your pipeline and it becomes then a kind of a blended natural gas oh okay like same like ethanol brending in the

country and you can only imagine methane would be more in a country like India where we have so much agricultural produce or cattle for that matter which will en that um what next for the company what are your plans in terms of expansion you spoke about the first plan being inaugurated in you are on an expansion mode what is the plan here sure so uh we currently are operating five plants currently we we have the highest operational capacity in the country these five plants are in mp up and Punjab uh we are now working on

another 20 15 20 plants so in total about 20 plants in a different stage of construction and development and in a near term uh we will be setting up more plants and to we take our capacity to about about 500 to 600 tons per day production about let's say 2 lakh ton per day per per per production for that matter we have also as you asked the question earlier that we already already already M with OMC and OC right which is in a process of JB formation so we are developing joint capacity increasing our capacity

of production in the country overall and working on all feed stock so ever and virro is the one who have actually started development of of this industry at a at initial level right we already created a huge case we've created you can produce you can sell you can Market you can aggregate biomass and you are you can you can bring it bring in technology and convert that into into CBG So based on that uh we are now progressing forward with multiple projects in hand and multiple projects in pipeline at the same time we are seeing

these CBG project not just CBG but more of a bio refiner because we know today CBG there's a market and and CBG can be produced organic manure there is a need of soil Health Improvement but also the other uh let's say byproduct which come out of that has a technological potential to cre into further Downstream Downstream projects okay so that's our growth plan in terms of that and we are actively actively pursuing demand actually pursuing the capacity build so good luck for that for sure uh last two three points that I wanted to understand one

is what I asked you earlier what is the throughput looking like if you say you put one ton of biomass how much of a biog gas comes in and is it profitable business from say year one year two does it take more time of course you said there are couple of factors there but CNG business makes margins of 20 22% uh what about biog gas yeah so let's talk about potential yield potential first so we have multiple sources like agriculture residue like pistro pistro has a higher total solid content it has higher Celluloid or homo

cellul which converts into CBG then we have other other sources like uh like Municipal Solid Waste which is is more water inside it's a wet waste it is less TS then we have Industrial Waste and then we have cang so cang would have about 1 to 1.5% of the yeld potential and rice would have more than 15% of yeld potential and in are 4 to 6% potential so but the use requirement of the feed stock would also change accordingly you know so which means that the cost structure varies depending on the feed stock technology use

when it comes to let's say commercial viability perspective as I said that from a various policies coming together is creating an environment today however when you look into whom are we competing with we are competing with with red competing with fossil fuel based and the price of fossil fuel depends on the global Geo geopolitical demand Supply and location where where you are in this case it's a manufactured gas so the so that we believe that slowly slowly the price will be discovered based on the based on the manufactured gas right and based on the various

enablement the demand pull and the adjacency product development would allow this to be a healthy commercial viability okay so that uh again as you said some policy incentives some more awareness and because it's good and technology is early stage so technology start correct will go up so so there is a and and the fact is that why large corporates are investing they see value in that they do they do for sure and that's been the big Push by the government and generally by corporating as well Mr G thank you so much for joining us today

it was a pleasure having you with us on the podcast and learning so much about biogas you know we keep hearing these words it's always good to dejaron eyesee when we read about them so it was a pleasure to have you here thank you very much thank you okay all right with that we'll take your leave on this edition of climate clock podcast as always keep writing to us tell us what you want us to discuss in the show and we'll bring that for you till then we'll take your leave thanks a lot for tuning

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