A biogas digester doubles as a trampoline for children at a small-sized dairy farm, about 100 km south of Chennai. The digester, made by Mexican company Sistema.bio and priced ₹40,000, produces 2 cubic metres of gas daily, using cow dung as feedstock. Biogas digesters are sought-after by companies seeking carbon credits
| Photo Credit:
M Ramesh
A few years ago, a cookstove mania seized the world. Companies mushroomed everywhere to venture into what was seen as a lucrative business — namely manufacture “fuel-efficient” cookstoves, distribute them to rural folk free of cost and collect carbon credits for the fuel saved and, thereby, emission cuts. Soon, the business crumbled amid reports of alleged misdemeanours ranging from fraudulent count of undistributed cookstoves to overstating carbon dioxide emissions. Investigators found gifted cookstoves lying in disuse, as the families continued to cook on conventional stoves. Given the cooked-up nature of the carbon credits, the buyers of these credits — companies committed to emission reduction targets — lost confidence.
Now, cookstoves are making way for a new emission saver — cow dung-based biogas. In India, entities such as the National Dairy Development Board (NDDB), Amul, the Gujarat Cooperative Milk Marketing Federation, Nestle, Danone and Infosys are into this new business. They heavily subsidise the cost of biogas reactors in return for the underlying carbon credits. This helps the companies meet their emission reduction targets while also earning them a decent return from selling the credits. It also helps farmers get near zero-cost cooking gas.
Raja is a farmer who rears eight cows on a holding that is less than a quarter acre, near Pooriyambakkam village, about 100 km south of Chennai. For generations his family has been growing crops, but Raja has now stood the business on another leg — milk production. The reason: the advent of Akshayakalpa Farms and Foods Pvt Ltd, the Tiptur, Karnataka-based organic dairy products company that offers to buy milk from farmers who follow its conditions on cattle rearing. The farmers get a premium (and prompt payment) for organic milk, which Akshayakalpa either retails, or turns into an assortment of dairy products for sale.
Raja’s cows produce a lot of dung — 20 kg per animal per day. He was earlier using the dung as manure but a Mexican company, Sistema.bio, suggested that he first produce biogas and then use it as manure.
Savings and credits
Sistema.bio’s reactor costs ₹40,000, eats up 40 kg of dung daily, and spews 2 cubic metres of biogas — enough for three hours of cooking per day.
But Raja didn’t have to pay the entire cost of the reactor. Instead, Shell Foundation stepped in and paid ₹33,000; Raja only had to pay the rest. He spent an additional ₹4,000 to ready the cattle shed. The dung slurry flows into the digester, which is the size of a double cot. After 22 days of initial wait, the digester begins to produce gas daily. The black polymer sheet covering the digester bulges all the time with the gas. Raja’s children love it — they use it as a trampoline.
Raja no longer buys LPG for cooking. He reckons his family has saved ₹2,200 a month, from his investment of ₹11,000.
For its investment of ₹33,000, Shell Foundation gets about 6-7 carbon credits a year, verified and certified by Gold Standard, a not-for-profit body launched by the World Wide Fund for Nature (WWF). The price of these credits in the international ‘voluntary market’ varies — somewhat dampened by the cookstove misfire — but $10 a credit is a reasonable hope.
Sistema.bio, which produces the biogas reactors in Pune, has so far supplied one lakh units to Indian farmers in the last seven years, mostly sponsored by Infosys, Shell and Nestle. Other companies like NDDB, Amul and GCMMF have come on board recently. Akshayakalpa, too, has bought one of Sistema.bio’s larger (180 kg per day) reactors for its experimental farm at Pooriyambakkam, where it has about 25 cows. Hatsun Agro, South India’s largest milk company, is in talks with Sistema.bio.
Gas meter
The model for the distribution of biogas reactors is similar to that of cookstoves — gift the gadget in return for carbon credits. Except, the reactors cost way more, compared with the average price of ₹2,000 for a cooktop, which fetches 4 credits a year. This has necessitated a sustained push to gain acceptance for the concept, an official of Sistema.bio told businessline, adding that the effort is now paying off.
Sistema.bio sees great potential in this business. There are 70 million dairy farmers in India, the company noted in a recent press release. It targets “empowering” one million farmers by 2030. It is also exploring an adjunct business — biochar, which can sequester carbon for hundreds of years. Pertinent to note that Hyderabad-based biochar company Varaha recently signed up to sell one lakh biochar-based carbon credits to Google.
There are, of course, lingering concerns over the integrity of carbon credits based on these biogas plants. Sistema.bio has sought to address these by acquiring a gas meter company, Inclusive Energy, in October 2024. Today, Sistema.bio’s digesters come with the meters. Besides, the biogas model is more amenable to monitoring than cookstoves.
The ‘cookstoves for carbon credits’ business is not dead but under a cloud, even as biogas and biochar are moving in swiftly. The carbon credits industry will get a boost when the Indian Carbon Market becomes a reality.
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Published on April 13, 2025
