Frequently Asked Questions

CBG or Compressed Bio Gas consists of mainly methane (more than 90%) and other gases like carbon dioxide (less than 4%), etc. CBG is produced by anaerobic digestion of biomass and waste sources like agricultural residue, cattle dung, sugarcane press mud, municipal solid waste, sewage treatment plant waste, etc. This Biogas can be purified to remove hydrogen sulphide (H2S), carbon dioxide (CO2), water vapor and when this purified biogas (methane content more than 90%) is compressed to maximum 250 bar and filled up in cascades (group of high pressure cylindrical vessels), it is called Compressed Bio Gas or CBG.

CBG has properties almost similar to CNG and hence a vehicle running on CNG can straightway be filled with CBG without any modification in the vehicle.

Ministry of Road Transport and Highways, Government of India, vide Gazette Notification no. 395 dated 16.6.2015 has permitted usage of CBG for motor vehicles as an alternate of CNG.

BIS has issued IS 16087 2016 standards on CBG which is similar to BIS specifications IS 15958:2012 for CNG.

Expression of Interest for production and supply of Compressed Bio Gas (CBG) are being floated on monthy basis. EOIs to IndianOil may be accessed from the e-Tendering portal https://iocletenders.nic.in by searching “CBG” in the tender search box. The EOI is free of cost and EMD amount is NIL. The EOI can be accessed anytime from anywhere using the link https://iocletenders.nic.in.

Similarly, BPCL website (www.bharatpetroleum.com/) and HPCL website (www.hindustanpetroleum.com) may be visited for respective EOIs

The filled application along with annexures (compiled and merged in one single pdf file) should be submitted online on the e-Tendering portal.

There is no application fees,EMD, Security Deposit, etc. while applying for the issue of LOI under SATAT scheme.

However, the successful applicant after receiving Letter of Intent from the concerned Oil & Gas Marketing Company has to submit a BG of Rs 5 lakh per plant for proposed Plant, if the proposed Plant is yet to come or yet to be set up or BG of Rs. 1 lakh per plant if the proposed Plant is already existing.

In case of the individual applicant, the applicant should be of minimum 21 years of age. The same will be ascertained in case of individual applicant on basis on any Government issued identification with age / date of birth mentioned.

In other cases applicant shall be of Indian nationality and/or a company registered in India and/or Non-Resident Indians/Persons of Indian Origin and/or a Multi National Company having its registered office in India / Overseas Corporate Bodies having its registered office in India.

Evaluation of the EOIs shall be carried out of a total of 100 marks as described in the EOI document. The prospective applicant has to score minimum of 35 marks to qualify.

After submission of the documents through the e-tender portal, a committee of a particular OMC/GMC evaluates the EOI and awards Letter of Intent (LOI) to the successful applicant who had scored 35 marks or more on evaluation criteria

The LOI holder has to submit a bank guarantee of Rs. 5 lakh/plant for proposed new Plant or Rs. 1 lakh/plant for existing Plant. After submission of the bank guarantee, the LOI holder can immediately execute a Commercial Agreement with OMC/GMC for production and supply of CBG.

As per the EOI, OMC/GMC has offered a procurement price of CBG of Rs. 46/kg + applicable taxes purified as per IS 16087: 2016 standards, compressed to 250 bar pressure and delivered to OMC/GMC Retail Outlets in cascades upto one way distance of 25 kms from the CBG Plant to the Retail Outlet. The procurement price of CBG shall remain valid from 1.10.2018 to 31.3.2024. There will be periodic revision in procurement price with effect from 1.4.2024, however minimum procurement price will not be lower than Rs. 46/kg + applicable taxes for the period from 1.4.2024 to 31.3.2029. Additionally, OMC/GMC shall also execute a Commercial Agreement of 15 years with the CBG Plant owner, to be extended on mutual consent.

The detailed Commercial Agreement on CBG is available with the EOI document

• Reserve Bank of India has notified inclusion of CBG projects under Priority Sector Lending vide directives to Banks dated 4.9.2020.

• Inclusion of Bio-manure produced from CBG Plants under Fertilizer Control Order 1985 has been approved and notified vide Gazette Notification dated 14.7.2020.

• Ministry of New and Renewable Energy has extended Central Financial Assistance (CFA) Scheme on CBG

• State Bank of India and Bank of Baroda have launched products for financing of CBG Plants

Inclusion of Digested Bio Gas Slurry is under consideration by Central Fertilizer Committee

Single window facility for approvals

Biomass supply chain by State Governments

Please visit https://biourja.mnre.gov.in/ where MNRE Central Financial Assistance on CBG has been provided in detail.

The MNRE subsidy is as followings:-

Rs 4 Crore for Plant producing 4.8 Ton per day of CBG (i.e 12000 Cubic Meter of Bio Gas per day) capped to Rs 10 Crore per Plant for 12 Ton Per Day or more per CBG plant. The details are available at above web site which may be referred to for exact information and interpretation.

"The purchase of CBG by OMC/GMC (Oil Marketing Company / Gas Marketing Company) from the plant owner shall be governed through a firm commercial Agreement signed by OMC/GMC & CBG plant owner for supply of CBG under SATAT and initially will be valid for the period of fifteen (15) years from the date of signing. Further, before the expiry of commercial agreement, both the Parties may agree to extend the same for a further period on mutually agreed terms and conditions.

Oil and Gas Companies shall try to off-take and market the entire amount of CBG produced by the CBG Plant. However, the actual off-take of CBG shall entirely depend on the actual quantity of CBG sold in a particular market.

The CBG market, particularly in unseeded market, is expected to grow gradually and therefore, the supply of CBG from a particular CBG plant is also expected to increase gradually . Accordingly, the mutually agreed CBG supply plan shall befinalised and accordingly the production of CBG from a particular CBG plant shall be synchronised. Indian Oil shall take the CBG quantiy only that much which are being sold in the market.

In the event Buyer is not able to off-take CBG as per Supply Plan for a period of three (3) months, the Buyer shall endeavour to facilitate in sale of CBG at other retail outlet(s) of the Buyer or industrial bulk customers of the Buyer. Such sale to industrial bulk customers of Buyer will be as per mutual agreement by both parties.

It is being clarified that, there is no take-or-pay arrangement under SATAT scheme.

" OMC/GMC can provide ""Take or pay"" guarantees to the CBG plant owners, only when, there is there is a ""Take or Pay"" guarantee from its CBG end users or customers. Since, Indian Oil or other Oil & Gas companies does not receive any such guarantees from its end users or customers, they cannot provide any such ""Take or Pay"" guarantee to the CBG plant owners.

The cascade of CBG Plant used for delivery of CBG at Retail Outlet must be connected to the inlet of booster compressor at Retail Outlet. The cascade of CBG plant can be disconnected either when the stationary cascade of retail outlet is filled or the cascade of CBG plant is emptied in the stationary cascade. Hence, for larger capacity cascades of the CBG plant, when the stationary cascade is completely filled, the CBG plant's cascade can then be disconnected and can be used to service to other Retail Outlets for better capacity utilization.

However, LOI Holder should ensure that the Retail Outlet remains supplied with CBG at all times and there should not be a disruption in supply of CBG due to the above mentioned procedure. Accordingly,CBG plant owner may, at their sole discretion, deploy cascades of multiple capacities (small and large) for ease in operations.

It is clarified that we can accept 3000 water litre metal cascades or cascades of higher capacity for delivery of CBG to the Retail Outlets. For steel cylinder cascades, IS 7285 shall be applicable. If type-3 or type-4 composite cascades are used, respective BIS specifications like IS 15935 or relevant specifications shall be applicable. The safety standards mentioned in IS 16087 2016 (or its latest version) should be adhered to all the times during transportation of CBG.

Accordingly,CBG plant owner may, at their sole discretion, deploy cascades of multiple capacities (small and large) for ease in operations.

Change in constitution of firm is permitted by Indian Oil as a matter of routine affair either before/after award of LOI or execution of commercial agreement under SATAT scheme.

The process of reconstitution of firm is simple and the applicant has to only approach OMC/GMC through formal letter before effecting such changes and give commitment that the old and new reconstituted firm shall abide by the terms of EOI, LOI and commercial agreement. Further the old firm shall also give a parent guarantee undertaking along with request letter.

Approvals of reconstitution shall be provided as routine unless and until there is any compelling reasons,( like proposed changes not in conformity with the prevalent law of the country) due to which Indian Oil may refuse to grant the proposed reconstitution in the firm. In case the permission of reconstitution of firm is not granted by Indian Oil, citing the reasons, why approvals for proposed reconstitution of firm is not granted shall be conveyed to the applicant.

Retail Outlet(s) outside the radius of 25 kilometers from the CBG Plant can be selected for sale of CBG without any additional liability and financial implication to Oil & Gas Company. The additional cost incurred on transportation of CBG beyond 25 Kms shall be fully accountable to the CBG Plant owner.

Retail Outlet(s) outside the radius of 25 kilometers from the CBG Plant can be selected for sale of CBG without any additional liability and financial implication to Oil & Gas Company. The additional cost incurred on transportation of CBG beyond 25 Kms shall be fully accountable to the CBG Plant owner.

The SATAT Scheme was designed for utilization of local feedstock like waste and biomass to create CBG which can be used locally for vehicles, thereby creating a circular economy. The major consideration in creation of this green supply chain was than feedstock shall be sourced locally and product shall be sold locally thereby reducing transportation cost and related emissions. Only through creation of local supply chain can higher logistic cost & emission due to large distance transport be reduced making CBG a near zero emission affordable vehicular fuel

The CBG Plant shall sell CBG to Buyer at the meter installed in the CBG dispensing unit(s) at the Retail Outlet, which shall be the "Point of Sale".

Sale of CBG is in a closed system with almost no chance of any leakage in the CBG Dispensing Equipment i.e. Compressor, Cascade and Dispenser. Hence there is no envisaged risk/ loss to anyone during CBG dispensing process as the entire process is certified by PESO / Weights & Measures. Therefore, transfer of ownership of CBG from the Seller to the Buyer shall take place at the Point of Sale which shall be the meter installed in the CBG dispensing unit(s) at the retail outlet

Since sale of CBG is in a closed system with almost minimal chance of any leakage in the CBG Dispensing Equipment i.e. Compressor, Cascade and Dispenser. Hence there is no envisaged risk / loss to anyone during CBG dispensing process as the entire process is certified by PESO / Weights & Measure.

Therefore transfer of ownership of CBG from the Seller to the Buyer and point of sale will remain at the CBG dispensing pump’s metering unit as described in Commercial Agreement terms and conditions and decided uniformly on Industry basis.

In future, if CBG Plant increases their production capacity then respective OMC/GMC , shall not have any claim over the CBG quantity in excess of LOI quantity. This clearly means that it will be the sole discretion of CBG Plant owner to sell their CBG to any party for the quantity which are outside the purview of commercial agreement unless and until the commercial agreement quantity is suitably revised with mutual consent.

As per terms of the LOI awarded, LOI holder shall not enter into any agreement with a competitor of OMC/GMC with respect to the subject CBG Plant for which both Parties have entered into or are endeavouring to enter into a Commercial Agreement on supply of CBG.

Exploration of possibility of gas evacuation & sale through gas pipeline network or injection of CBG into CGD gas network is under consideration. In future, if any such policy is made for CBG injection in CGD network or CBG transportation through pipeline system, the same shall be intimated to the LOI holders by the respective OIL & Gas Marketing Companies.

There is no such concept of CBG price break-up in terms of fixed and variable component under SATAT scheme. No payment shall be made if no CBG is supplied..

As per the Commercial Agreement on CBG, in the event that Buyer (Oil & Gas Company) is not able to off-take the additional quantities of CBG through its retail outlet(s) or facilitate CBG sale to any industrial bulk customers, the Seller shall have complete liberty to supply / sell CBG to any other person(s) or any companies, entity, etc at its sole discretion.

As per the SATAT model agreed on Industry basis, the transportation of CBG is to be done by the CBG Plant owner and the pricing of Rs. 46/kg of CBG + applicable GST is including transportation of CBG from CBG Plant to Retail Outlet / Consumer Point situated at maximum 25 km distance from the CBG Plant.

If in certain situation, the Retail Outlet identified is beyond 25 km, additional transportation cost shall be reimbursed at mutually discussed & agreed rates for actual expenses beyond 25 Km transportation. This additional transportation costs shall be recovered from the market through inclusion in the Retail Selling price (RSP) build-up of CBG.

"There is no take or pay clause in SATAT. Even if the reason for not lifting the CBG from the CBG Plant is on OMC/GMC (buyer) account, there cannot be any payment made to the CBG Plant owner (seller)

The payment to the Plant owner shall be governed by the procurement price of Rs. 46 / kg of CBG + applicable taxes upto 31.3.2024 for CBG delivered (at Retail Outlet situated within 25 km from CBG Plant) in a cascade with 250 bar pressure.This price is to be revised from 1.4.2024. However, the procurement price shall not be less than Rs. 46 / kg of CBG + applicable taxes from 1.4.2024 to 31.3.2029.

The price of Rs. 46 / kg of CBG is exclusive of applicable taxes i.e. GST presently @5%. Suppose in future this GST is revised from current rate of 5% / replaced by any other tax mechanism, accordingly the same shall be duly considered in the pricing mechanism.That is why we always state that CBG procurement price is Rs. 46 / kg + applicable taxes.

The moving cascade of the seller shall be the complete liability of the seller and accordingly any insurance liability arising out of it is the complete liability of the seller i.e. Plant owner immaterial of the fact that this moving cascade is standing anywhere..

The specifications for CBG is governed by IS 16087 2016, which also contains various guidelines and specifications detailing issues like safe handling of CBG, transportation of CBG, storage of CBG, supply and/or sale/dispensation of CBG.

These guidelines can be procured from BIS website https://bis.gov.in.

As per normal operating procedure, Seller/its agents/servants shall bring the Cascade to the Retail Outlet and hence any damage to the Retail Outlet by the Seller/its agents/servants shall be the responsibility of the Seller. There is no vice-versa case as OMC/GMC's agents/servants shall not be delivering anything to the CBG Plant.

There is no need to include any additional line in the commercial agreement because, if OMC/GMC grants any extension to the LOI holder for any specific period, the same shall be considered and applicable in all the relevant clauses of the LOI & Commercial Agreement .

The extension clause already implies that Buyer shall not be unreasonably declined any time extension request for CBG Plant construction and CBG commercial supply. All valid and genuine requests for time extension for setting up CBG Plant shall be granted as a routine matter.

The present specifications for cascades are IS 7285 / IS 15490. You may also refer to IS 16087 2016 for the same. The mentioned standards can be accessed from BIS website - https://bis.gov.in/.

As per the Commercial Agreement a detailed plan is to be worked out between OMC/GMC and CBG Plant owner as to determine the long term, monthly and daily quantities for supply and off-take of CBG. This shall provide an indication regarding supply and off-take quantities of CBG to the Seller and Buyer. Based on the same, daily off-take schedules shall be planned to accurately determine number of cascades to be supplied to the Retail Outlets.

OMC/GMC shall be installing gas analyser at its Retail Outlet to ascertain the quality of gas supplied and dispensed. The quality of gas should be as per IS 16087 2016 specifications.

At present, GST is applicable on CBG. The same shall be collected from the end customer by OMC/GMC and CBG Plant owner's portion of GST shall be passed on to CBG Plant owner as Input Tax Credit.

OMC/GMC has initiated marketing of CBG from various retail outlets and Industrial customers.

The feedback received from customers using CBG for their vehicles are encouraging. Improvement in mileage and ease of driving are the two common factors for which customers have expressed their satisfaction during recent survey.

As per a study in Camden, UK on CBG and CNG vehicles, it was observed that the CGB vehicle displayed a 6% efficiency improvement in fuel consumption when compared with the CNG vehicle. This trial also supported the assumption that biomethane can be directly substituted for natural gas as a road transport fuel with no apparent maintenance or operational difficulties.

For assuring off-take price and to ensure bankability of the projects, Oil & Gas Marketing Companies have included the following long term pricing structure in EOI and Commercial Agreement on CBG:-

• Procurement price of CBG from 1.10.2018 to 31.3.2024: Rs. 46/kg + applicable taxes, as mentioned in the above table.

• There will be periodic revision in procurement price with effect from 1.4.2024, however minimum procurement price will not be lower than Rs. 46/kg + applicable taxes for the period from 1.4.2024 to 31.3.2029.

Although the initial term of the commercial agreement is for 15 years, there is a provision to renew the agreement on mutually agreed terms & conditions.

As per the present business plan it is envisaged that one CBG supplier shall be supplying CBG at one particular Retail outlet and multiple CBG supplier to a single CBG outlet shall be avoided.

However, in rare cases due to any exigency, if a single retail outlet is supplied CBG from multiple CBG Plants, the totalizer readings shall be accounted for everytime a particular supplier's cascade is connected or disconnected with the booster compressor and stationary cascade of the Retail Outlet and accordingly, payment to the individual CBG Plant shall be made as per the totalizer reading of the dispensing unit at the time of connection and disconnection of that particular cascades of that particular CBG Plant.

Buyer can only be responsible towards its own employees or towards it's own Dealer’s and their employees for any possible damage to the cascades of CBG Plant owner taking place at Retail Outlet due to the reasons purely attributed on their account.

As clarified in Clause 8.7 in the event that OMC/GMC is not able to off-take the additional quantities at any retail outlet(s) or facilitate in sale to industrial bulk customers, the Seller (CBG plant owner) shall have the complete liberty to sell CBG from his plant to any other person(s) or any companies, entity, etc at its sole discretion.

They are to be preserved for 1 month or till the payment has been made on the cascade, whichever is greater.

The CBG supplied shall be as per IS 16087:2016 standards. As per the standards CBG delivered shall be odorized similar to a level found in local distribution (see IS 15319)

Daily sale register shall be maintained at RO as per Meter Readings of the totaliser of the dispensing unit which shall be noted before connection and before disconnection of each particular cascade and also as per opening & closing meter reading for the day. The payment to the CBG suppliers shall be made based on fortnighly joint meter reading of the totaliser of the dispensing unit(s) at the RO.

Any exemptions/ concessions/ benefits/ waiver on taxes etc made available toOMC/GMC or any other benefits under the Tax laws made available to Indian Oil due to any change in taxation structure shall be passed on to the CBG suppliers or CBG customers or both as the case be under GST laws or any other applicable law.

Based on the joint ticket prepared recording the of CBG quantities sold, fortnightly invoices shall be raised by the Seller on the Buyer. Buyer shall make payments to the Seller in Indian Rupees, within15 Business Days from the date of receipt of the original invoice from the seller.

As it is a closed system at the Retail Outlet, there should not be any quality issues in CBG due to equipments installed for dispensing CBG at Retail Outlet.

However, if the CBG plant owner through available evidence could conclusively and unambiguishly prove that the quality of the supplied CBG has got altered due to the faults in the dispensing system of CBG installed by buyer at RO, the seller shall not be held responsible for such problem in the quality of supplied CBG .

Clause include case for fraud and wilful misconduct

The maximum unloading pressure shall be 250 Bar. The minimum pressure of unloading is tentatively expected to be around 30 bar. This also is expected to be varying from one RO to other RO depending upon installed Compressor's configuration and settings.

PESO certifications are statutory guidelines and has to be strictly adhered to. However, CBG Plant owner should endeavour to obtain PESO licence at 250 Bar from PESO authorities.

CBG does not comes under the purview of PNGRB. CBG can be sold in existing CGD areas as is already being done by OMC/GMC.

In other words , there is no PNGRB permission required for selling CBG in any part of India.

Applicant may apply to Indian Oil through a formal application to install their CBG equipments at OMC/GMC RO and their such willingness wil be duly considered.

There are various CBG Plant manufacturers in the market doing EPC for Plants and supplying CBG equipments. The same may be approached for comparative analysis. In addition there are a number of CBG Plants already marketing CBG or where there is work in progress. LOI holders can be put in touch with all such Plants for a better understanding of the sector.

No

The technology selection should be done based on type of proposed feedstock to be used, proposed Plant Location, cost of technology, yield of CBG for particular technology, running operation and maintenance cost of the proposed Plant due to use of particular technology etc.

CBG Plants are financially viable if they get assured cheap organic waste or biomass locally on long term basis. Applicant may assess the quantity of feedstock available in its area for the purpose of setting up CBG plant. The CBG Plant may be designed as per local feedstock considering feed transport cost.

Feedback from the LOI holder shall be taken before finalisation of Retail Outlet by OMC/GMC. Selection of a Retail Outlet shall be done by OMC/GMC based on various factors like dimensions of Retail Outlet , Type of Retail Outlet , Sale potential etc.

The type of feedstock to be used for CBG production and financial viability of a plant depends on many factors like cost of input feedstock, location of plant, etc. As per SATAT scheme, the responsibility of setting up of CBG plant lies with the entrepreneur and therefore applicant is requested to assess CBG production and financial viability of its plant by itself.

The following tentative yield of various feedstocks are normally considered as per discussion with various existing and proposed CBG Plants and various technology providers. However these are only directional in nature and actual yield may vary substantially depending on quality of feed stock.

As per the Commercial Agreement on CBG (copy attached), the OMC/GMC shall off-take and the Seller shall provide the quantities of CBG as agreed in the Supply Plan (Clause 8.2). Within a period of xx days of execution of the Commercial Agreement, the Parties shall mutually draw out a detailed plan so as to determine the monthly quantities for supply and off-take of CBG for the entire tenure of this Agreement (Clause 8.3). Based on the monthly quantities as agreed upon, daily off-take schedules shall be made in mutual consultation (Clause 8.4).

Hence, the supply shall be as per the daily off-take schedule prepared as per demand and there shall be no situation where supply of CBG is in excess of demand as per daily schedule.

Considering the spread of OMC/GMC's Retail Network, it is expected that there shall be Retail Outlets available for dispensing of CBG within 25 km radius of the CBG Plant. As per the Expression of Interest on SATAT scheme, an indicative maximum distance of 25 km for supply of CBG has been mentioned. However, the CBG Plant owners are free to deliver CBG even beyond 25 kms from CBG Plants and based on specific requests from various CBG Plant owners, OMC/GMC have already allowed delivery of CBG beyond 25 km radius from CBG plants. It is henceforth, clarified, that there is no such restrictions or limitations on supply of CBG outside 25 km radius from the CBG plant.

The CBG delivery price of Rs. 46 + GST is for CBG as per IS 16087 2016 standards, compressed at 250 bar pressure and delivered to IndianOil Retail Outlet in cascades. Hence the cost of transportation of CBG is already built in the CBG delivery price of Rs. 46 + GST. There is no additional re-imbursement of transportation cost of CBG to producers.

The Point of Sale by the CBG Plant to the Oil & Gas Company shall be the totalizer in the Dispensing Unit at the Retail Outlet

The indemnity shall be applicable to events during the term of the agreement but shall survive the expiry or termination of this Agreement.

There is no take or pay in the SATAT scheme. Payment shall be made only as per sale noted in totalizer readings

There are already Force Majure clause in the Commercial Agreement .

This clause protects any intentional & unintentional damage by the appointed agents or person of the Sellers at the Buyer’s or its agent’s properties / equipment / persons. In case of any damages to the properties/ equipment /persons of retail outlet due to the reason purely attributed to the seller or its appointed person or agencies, it is the responsibility of seller to bear the costs of losses as well as all consequences for the same.

Buyer can only be responsible towards its own employees or to its own Dealer’s and their employees for any damage to the cascades are taking place purely to the reasons attributed to its own employees or to its own Dealer’s and their employees.

This is a last recourse to be invoked when all doors of negotiations and mutual discussions and mutual agreements have failed. Any such instances will be clearly communicated to the Seller in advance and Seller shall be provided opportunity to resolve the matter at the earliest.

As a Stakeholder any changes in constitution happening within the Firm must be informed to the Buyer. Buyer shall approve the proposed reconstitution of firm as a routine matter unless and until there are compelling reasons for not approving any such proposed reconstitution like reconstitution not proposed to be done in accordance with the prevailing rules of the laws etc.

The seller shall be responsible only upto the point which is purely attributed to any action / consequences taken by the seller like failure to supply quality CBG etc.

Already covered in Clause 6.8 and Clause 4.3

Same reason as to Clause 20.1 and 20.2 Already covered in Clause 6.8 and Clause 4.3

Any disruptions due to pandemic, epidemic and lockdown may be included under administrative orders. Already covered in the clause.

Only experience of the applying party shall be considered during during evaluation of the EOI.

Experience of parent company of a subsidiary / SPV or experience of directors in earlier firms / related companies will NOT be considered.

ou may go through the qualification criteria in the EOI, as new entities can also qualify under terms of the EOI.

Change the Land use is mandatory for setting up the CBG plant.

CBG plant can only be constructed on commercial land.

Following major approvals are required.However the list are not exhaustive and State / district Authorities may be approached for further clearances required (if any)