In this article, the conversion process of agricultural residue to bio fuels and methanisation have been discussed in detail, and the issues with the use of these fuels are taken up and finally an economic analysis is taken up as a comparative study…


Biomethanation is a process by which organic material is microbiologically converted under anaerobic conditions to biogas. Three main physiological groups of microorganisms are involved: fermenting bacteria, organic acid oxidizing bacteria, and methanogenic archaea.

Microorganisms degrade organic matter via cascades of biochemical conversions to methane and carbon dioxide. Syntrophic relationships between hydrogen producers (acetogens) and hydrogen scavengers (homoacetogens, hydrogenotrophic methanogens, etc.) are critical to the process. Deterrmination of practical and theoretical methane potential is very important for design for optimal process design, configuration, and effective evaluation of economic feasibility.

Agricultural residues are bailed by the bailers…

Satat scheme

Satat is an innovative initiative with PSU Oil Marketing Companies (OMCs, that is, IOC, BPC and HPC) inviting Expression of Interest (EoI) from potential entrepreneurs to set up Compressed Bio-Gas (CBG) production plants – and make available CBG in the market for use in automotive fuels, which have the capability to boost availability of more affordable transport fuels, better use of agricultural residue, cattle dung and municipal solid waste as well as to provide an additional revenue source to farmers.

Bio-gas is produced naturally (through a process of anaerobic decomposition) from waste / bio-mass sources like agriculture residue, cattle dung, sugarcane press mud, municipal solid waste, sewage treatment plant waste, etc. After purification, it is compressed and called CBG, which has high methane content. Further, Compressed Bio-Gas is exactly similar to the commercially available natural gas in its composition and energy potential. With similar calorific value and other properties similar to CNG, Compressed Bio-Gas can be used as an alternative, renewable automotive fuel. Given the abundance of biomass in the country, Compressed Bio-Gas has the potential to replace CNG in automotive, industrial and commercial uses in the coming years.

Production & marketing plan

Compressed Bio-Gas plants are proposed to be set up mainly through independent entrepreneurs. CBG produced at these plants will be transported through cascades or through pipelines to the fuel station networks of Oil Marketing Companies (OMCs) for marketing as a green transport fuel alternative. The 1,500-strong CNG stations network in the country currently serves about 32 lakh gas-based vehicles.

The entrepreneurs would be able to separately market the other by-products from these plants, including bio-manure, carbon-dioxide etc., to enhance returns on investment. The National Policy on Biofuels 2018 emphasises active promotion of advanced bio-fuels, including CBG. The Government of India had launched the GOBAR-DHAN (Galvanising Organic Bio-Agro Resources) scheme earlier this year to convert cattle dung and solid waste in farms to CBG and compost. In addition to Govt. of India’s efforts, Individual states have also come forward to promote CBG initiatives, in this direction several states such as Haryana, Punjab, Uttar Pradesh and several other States have formed State Level Committee for implementation and monitoring of SATAT Scheme.

As we know, Methane as natural gas has got four-fold use, it is PNG in our kitchen, CNG on the road, Fuel for Power-Plants based on combined cycle and raw-material for fertilizer. While transportation of briquettes could add significantly to its lended costs, natural gas can be utilized in the vicinity of its production.  Let us now see the gas prices in different forms.

CNG prices

Below are the prices of Compressed Natural Gas (methane is the major constituent)

  • NCT of Delhi – Rs. 43.40/- per Kg
  • Noida, Greater Noida & Ghaziabad– Rs.49.08/- per Kg
  • Muzzaffarnagar & Shamli  – Rs.57.25/- per Kg
  • Gurugram –  Rs.53.40/- per Kg
  • Rewari  –  Rs.54.10/- per Kg
  • Karnal  – Rs.51.38/- per Kg
  • Kaithal – Rs.51.38/- per Kg
  • Kanpur, Hamirpur & Fatehpur – Rs. 60.50/- per Kg

PNG prices

  • NCT of Delhi – Rs.28.41/- per SCM (Including VAT)
  • Noida, Greater Noida & Ghaziabad –  Rs.28.36/- per SCM
  • Karnal & Rewari – Rs.28,46/- per SCM
  • Muzaffarnagar, Meerut & Shamli – Rs. 32.67/- per SCM (including VAT)

On further analysis, we find that: By Briquettes, we are able to make around Rs 7/KG and for gas we make Rs. 15 approximately.

Now, let’s add the transportation cost

Here are the Operating Cost and Fixed Cost of each truck (could vary from company to company by 10%) based on 8,000 Kms., monthly running.

  • Fuel : Rs. 14.00 per Km
  • NH Toll : Rs. 5.00 per Km
  • Tyre : Rs. 2.00 per Km
  • EMI : Rs. 6.00 per Km
  • Maintenance : Rs.1.00 per Km
  • Double Drivers : Rs.4.00 per Km
  • National permit, Insurance, Fitness, Road Tax, goods Tax : Rs.1.00 per Km
  • Police / RTO / Border / Accidents : Rs. 1.00 per Km
  • Company Management Expenses : Rs. 1.00 per Km

On Adding all the prices, we get a Total Cost / Km : Rs. 35.00 per Km.

Let’s assume, a truck can carry a standard of 10 Ton of briquettes.

So, Rs.35 per Km will be the cost of transporting the briquettes by trucks with a capacity of 10 tons.

Let’s assume an average distance of 300 Km, So 300*0.0035=10500 = Rs. 1.05

So, we need to add the cost of transport to the cost of briquettes as landed cost.

Here, we have not taken into account the further benefit of liquid fertilizer from methanization, which can also be sold.


What was traditionally considered as waste is being increasingly transformed into energy. Every bit of biomass can be used to produce bio-gas and bio-coal. This will go a long way in making India energy self-reliant, help combat global warming and mitigate climate change.

If we look for the price of pellets, it’s competitive if we go for mass production and transport in bulk through Railways. With average distance of 200-300 Km, the transportation cost is reduced in comparison to coal received from mines 1,000 Kms from the power plants. Environment being the first priority, biopellets can be substituted for coal, at least 5 to 10%, at Rs 7 to 8 per Kg as against Rs 4 per Kg of landed cost of coal.

However, when methanised the same, 1 Kg agricultural residue can yield approximately Rs 15/- @ Rs 46/ Kg of CBG under the Satat scheme. CBG can be utilised in the vicinity of its production without additional transportation cost unlike bio pellets that would require Rs 1/Kg over an average distance of 300 Kms, also liquid fertiliser as a byproduct of bio methanisation has a huge economic value. Thus, bio methanisation of agricultural residue is preferable – as it yields more value besides reducing petroleum and natural gas import for the country.





Sowjanya Rath is currently working as a Business Analyst in ESSPL, Bhubaneswar, Odisha. He is a Graduate (B. Tech.) in  Electrical And Electronics Engineering from Silicon Institute of Technology. He has done internship at NTPC Corporate Engg., Noida.




Dr. Bibhu Prasad Rath is a graduate in Mechanical Engineering. He has worked in various functions in NTPC including Operation & Design. He is presently Additional General Manager in Project Engineering Division. He has also completed ICWA (Inter – 1995), and M.Tech (IIT Delhi – 2002) and PhD (in Business Administration – 2015) from Aligarh Muslim University.

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