IGX Expects Trading In Green Gas Certificates To Start Early Next Year
Transporting natural gas in liquefied form via trucks will allow larger volumes to be transported, CEO Rajesh Mediratta says.
Indian Gas Exchange, India's only gas trading platform, expects trading in green gas certificates to start early next year as the mandatory usage of compressed biogas by city gas distribution companies gets triggered next April. The Union government has made it mandatory that the CGD companies must use 1% of their requirement as CBG from financial year 2026 and take it to 5% by fiscal 2029.
"We have proposed to (the) government to create green gas certificates on the lines of renewable energy certificates used by companies to meet their mandatory renewable targets," Rajesh Mediratta, chief executive officer of IGX, told NDTV Profit in an interview.
Compressed biogas producers can sell it to the local buyers at nominal rate and take CBG certificates for the premium price that can be sold on the exchange to the buyers in need of the certificates, according to Mediratta.
The CGD companies, in locations where there is no access to the CBG, can buy green gas certificates. It will also increase adoption of green gas produced by using agricultural and municipal waste. It will also have a larger shelf life and will save lots of expenses in transmission tariffs for buyers to transport gas over large distances.
"We expect the government to come out with the guidelines detailing the green gas certificates this year that could be implemented from April 2025 when the mandatory CBG usage will get triggered," Mediratta said.
Small-Scale LNG Demand Can Touch 5 MSCMD
IGX launched the contract for small-scale liquefied natural gas in April to meet the natural gas demand in areas not connected to the pipeline grid through cryogenic trucks.
Natural gas is primarily supplied through pipelines in the country. As a result, industries and commercial establishments without access to the grid primarily rely on trucks for LNG transportation. The demand for road-transported LNG is projected to increase to 5 million standard cubic metres per day over the next five years, Mediratta said.
"This initiative will provide city gas distribution networks, industries and LNG dispensers a competitive gas pricing that will optimise their costs," Mediratta said. "By facilitating the trading of ssLNG contracts, we are not only enabling the efficient transportation of larger volumes of natural gas via trucks but also widening access to a cleaner fuel across the country."
Transporting natural gas in liquefied form via trucks will allow larger volumes to be transported, potentially making it economically viable for buyers not connected to pipelines. It will also ensure a transparent and fair procurement process with enhanced payment security, he said.
