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Sunday, November 29, 2020

Wealth from stubble

Crop residue could be turned to biofuel, but farmers require proper incentives, handholding.

Written by Deepak Gupta , K Krishan | Updated: October 27, 2020 1:43:15 pm
Punjab stubble burning, Punjab air pollution, Amritsar stubble burning this season, Punjab news, Punjab AQI, India news, Indian expressIn Punjab, stubble burning takes place every year in 17-18 lakh hectares.

Come September, with monotonous regularity, the discourse on stubble burning starts, reaches a crescendo in October, then Diwali crackers tweak the narrative and finally, the north-west winds blow away the pollution — and the issue as well. Unfortunately, all this largely happens on 24×7 TV or social media, which emphasise “instant solutions” and people tending to pontificate or sensationalise rather than reason. This is not to say that there have not been serious deliberations and that solutions have not been formulated. But we venture to suggest that this has not always been with the involvement of non-biased stakeholders. The purpose of this article is to articulate issues as well as suggest actionable programmes to address the problem of stubble burning, comprehensively and sustainably.

We feel more than a twinge of regret as a decade ago, during the tenure of one of the authors of this piece as Secretary MNRE, “task forces” were constituted to evaluate the techno-economic viability as well as develop business models for farm waste to energy projects, with “stubble burning” being the focused area. Regrettably, not much fructified from these efforts. CERC issued tariff orders for biomass gasifier/biogas power, which became inconsequential with solar and wind power tariffs declining to 33 per cent of that of biomass power.

The MNRE supported “pilot projects” of manure to bio-CNG. The task forces made recommendations on turning farm waste to advanced biofuels. It was only in 2018 that these morphed into the Gobardhan Scheme and National Policy on Biofuels, albeit with limitations related to offtake agreements and financing instruments — that is impeding capacity creation.

Paddy stubble poses major challenges in North India — the quantity of the farm waste is humongous and the window for disposing of it is too small. With the availability of wheat straw for cattle fodder, farmers have no incentive to collect the stubble.

In 2019, the governments of Punjab and Haryana announced Rs 2,500/acre as a bonus to small farmers who avoid burning stubble but there has been the negligible implementation of this subsidy in 2019 or 2020, for reasons that need no elaboration. We only flag that the annual cost of Rs 2,500 crore (for 4 million hectares of paddy cultivation area) could find better application.

Options for stubble management are broadly on-field management, alternate cropping and processing to biofuels.

On-field management involves mulching the stubble into fields by customised machinery. Subsidy is given for purchasing equipment but this takes care of only 20 per cent of the cost – besides costs, farmers are also saddled with operation and maintenance issues and the time factor isn’t resolved either. Furthermore, mulching carbon-rich stubble impacts soil C:N ratio, necessitating proper nitrogenous fertiliser management apart from the potential surface accumulation of potassium (which is less mobile than nitrogen). The Punjab Agriculture University definitely has solutions but, adoption by millions of farmers, requires calibrated implementation and enormous extension services.

The country has surplus grains and grain cultivation has scaled up in UP, MP, Chhattisgarh, and Bihar. However, the farmers of Punjab, having toiled hard to feed the nation, do not seem ready to adopt alternate crops without income protection. These alternatives could be the cultivation of silage crops (hybrid sorghum, hybrid napier grass, maize). They have a high yield, enabling farmers to meet the feedstock needs of cattle, can also be used to produce biofuels plants and the cultivated area can be interspersed with horticulture (with biofuels facilitating cold chain infrastructure).

Biomass Depots: It is essential to undertake on-field baling of stubble, aggregate bales in a depot and enter into “bankable” agreements for supplies to Bio-Energy Plants. There should be fiscal incentives (capital subsidy from MNRE and interest subsidy from state governments) enabling green entrepreneurship.

Biomass Power Plants: The Punjab Energy Development Agency has actively supported the biomass power sector, including provisioning for a high feed-in tariff of Rs8/ KWh, but capacity creation, as well as stubble consumption, is relatively low. A sharp decline in solar and wind tariffs, though, is a constraint. The costs of establishing a year-round “bankable” supply chain for paddy straw bales is another deterrent.

Solid Biofuels: These comprise briquettes and pellets. Briquettes are fired in industrial boilers or combustors but the demand in Punjab and Haryana is not high. Pellets can be co-fired in utility range boilers & NTPC has issued EOI’s for 5 million tonnes of pellets (at the rate of Rs 5,500 to 6,000 per tonne) for firing in 17 of their power plants. However, investor response has been muted, as pellet production is capital intensive, coupled with high energy + O&M costs, apart from stubble bales costs, for year-round operations. It’s also a moot point as to whether NTPC can better deploy the Rs 2,000 crore annual incremental cost (for displacing Grade E coal by 5 million tonnes pellets).

Liquid biofuels encompass bioethanol, drop-in fuels, bio-oil, bio-methanol. The current focus is on 2G Ethanol. Oil manufacturing companies have announced 12 ethanol-based projects that need stubble amounting to 150,000 tonnes every year. The Ministry of Petroleum and Natural Gas’s “JI-VAN” Scheme provides viability gap funding to enable meeting the blending target of 20 per cent by 2030. However, the impact on stubble burning will be marginal, given the high capital expenditure per lakh tonnes of stubble consumed.

Gaseous biofuels include producer gas, biogas and green hydrogen. The current focus is on biogas upgraded to Bio-CNG, with co-product being compost. MoP&NG’s SATAT scheme, announced in 2018, envisaged 5,000 plants, typically rated 3,000 tons/year bio-CNG, consuming about 33,000 tons/year of paddy stubble. OMC’s issued multiple EOI and signed a few hundred MoU’s. However, hardly any plants have been commissioned or reached financial closure. There appears to be a definite anomaly in the OMC’s offtake price for Bio-CNG (CBG) as compared to that offered for first-generation bioethanol or biodiesel. We present the current offtake prices of OMC’s (a) 1G Ethanol from b-heavy molasses: Rs 54.27/l (or Rs 67.8/Kg); heat value of 26.5 MJ/Kg (b) biodiesel from Used Cooking Oil: Rs 51/l (Rs 55.4/Kg), going up to Rs 58 in year 5; heat value of 37.8 MJ/Kg (c) Bio-CNG: Rs 46/Kg fixed for 3 years, open-ended years 4 to 10; heat value of 53.8 MJ/Kg.

This matter requires serious consideration by MoP&NG and earliest revision of bio-CNG offtake rates as well as issuing “bankable” offtake agreement for 15 years, to facilitate low-cost project financing. It’s imperative that India adopts a technology-agnostic policy for promoting advanced biofuels. Attractive “offtake” rates for 1G Ethanol, laudably, supports Sugarcane Farmers but they constitute only 4 per cent of the farmer households in India. Processing agriculture residues to bio-CNG and compost will benefit many more farmer households, with manifold collateral benefits that accrue from assured availability of sustainable energy/ mobility.

Who will bell the cat?

Gupta is former chairman, UPSC, Krishnan is an expert in energy and infrastructure

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