India’s biogas plants cut production amid difficulties selling organic fertilizers

Compressed biogas (CBG) producers in India are facing growing difficulties selling organic fertilizers generated during feedstock processing. A lack of guaranteed buyers and the accumulation of unsold products are forcing some plants to operate below capacity or temporarily suspend operations. This is increasing operating costs and threatening the profitability of biogas projects, according to The Economic Times.

Despite government-backed offtake arrangements for biogas, India has no similar system for marketing solid and liquid organic fertilizers. According to industry estimates, a plant processing 100 tons of feedstock per day can produce around 4 tons of compressed biogas, along with 35–40 tons of solid organic fertilizer and up to 50 thsd liters of liquid fertilizer. Due to limited storage capacity, plants can hold these products for only a few days.

According to the Indian Biogas Association, only 217 of the 1,908 registered CBG projects have been commissioned, while another 339 are under construction. Further industry expansion could lead to growing volumes of organic fertilizers requiring reliable sales channels. Meanwhile, operating at reduced capacity or remaining idle could make it more difficult for plants to qualify for government capital assistance.

Another challenge is farmers’ limited interest in switching to organic fertilizers, as mineral fertilizers receive substantial government subsidies in India. The government previously provided market development assistance of 1,500 rupees per ton of organic fertilizer sold, but the program has since been discontinued. As a result, biogas producers must find buyers independently and cover the costs of storing and transporting their byproducts.

Representatives of the Indian Biogas Association emphasize that stable development of the sector requires support mechanisms for the organic fertilizer market similar to those already available for compressed biogas. They believe guaranteed offtake arrangements for byproducts would help increase plant utilization, reduce costs and improve the financial sustainability of biogas projects.

Tags: biogas, India