Indian Agricultural Residue Potential To Supplement Energy Sector

Agricultural waste burning is one of the world largest sources of seasonal air pollution. In India’s Punjab province, 15.4 million tonnes of rice straw are burnt after each crop harvest. Globally around 450 million tonnes of crop residues are burnt each year resulting in 1.2 million tonnes of methane emissions.

Not only does burning crop residues damage human health and the climate, it deprives the soil of vital nutrients, pH level, moisture, available phosphorus, and organic matter. For each tonne of rice straw burnt, 5.5 kg of nitrogen, 2.3 kg of phosphorous, 25 kg of potassium and about 1.2 kg of sulphur are lost. Like other agricultural residues however, rice straw can be used for multiple purposes to further climate, health and broader sustainability goals. 

Rice straw has already proven viable for use in water purification, electricity production, and biofuels, as well as ground cover, compost, and animal feeds. Its potential has so far been limited however by value chain gaps, which prevent private sector actors from capitalising on the resource. To help the government of India achieve its policy objectives in and contribute its Nationally Determined Contribution (NDC) targets, the CCAC and Food and Agriculture Organisation (FAO jointly supported a project to identify how crop residue can be used in environmentally sustainable and economically viable ways by both farmers and entrepreneurs.   

Due to the pressure to plant wheat within three weeks of harvesting rice, farmers need to dispose of rice straw quickly. Without established infrastructure to collect and deliver the rice straw to the market for private sector actors, there are few alternatives for farmers but to burn it. Attaching a value to residues usually considered waste is the most effective way of incentivising farmers and entrepreneurs to utilise the rice straw for more effective means.

The CCAC-FAO study aimed to assess what would be required to enable the mobilisation of rice straw as a valuable resource, as well as what the impact of producing rice straw as source of energy production to replace coal and traditional transport fuels.

The analysis found that due to the large scale of production required to make rice straw-derived bio-fuels profitable, India has the potential to be one of the first countries where a viable value chain could be established. As crop residues are important for maintaining soil quality as mulch and compost, the study based its modelling on usage of only 30% of available crop residues.

The study concluded that an investment of US$309 million would be needed to collect, transport and store this amount of rice straw within a 20-day period. This would be a major step enabling the function of a market for rice straw and its downstream products.

Successful development of this value chain would reduce greenhouse gas (GHG) emissions by about 9.7 million tonnes of CO2 equivalent and around 66,000 tonnes of particulate matter PM2.5. Using 30% of the rice straw in replacing coal-fired power would achieve 143% of the NTPC’s (National Thermal Power Corporation) initial target of procuring 5 million tonnes/year of pellets per year to cofire in its thermal power plants.

Crucially, economically viable uses for rice straw, in both second-generation ethanol and burnable pellets, require facilities operating at large scales. The GoI has set a target of 20% ethanol in all petrol by 2025, and there is a projected increase in demand for high-quality ethanol. Second generation ethanol however, may still require government subsidies or pricing mechanisms until the full demand for ethanol enters the market. For their part in the value chain, farmers would earn between INR 550 and 1 500 per ton ($6.66-$18.16) for rice straw.

The Government of India (GoI) is actively supporting the development of these value chains and is exploring measures to subsidise critical gaps in the value chain. It aims to reduce its energy import dependence as well as improve livelihoods and value chains in the agricultural sector. Public transport fleets in India are already largely run on compressed bio-gas, one of the economically viable products which can be produced from rice straw.

"We need to identify the rural, agricultural raw materials which have the potential to bring about a revolution. It will bring about a lot of development and create employment opportunities," said Nitin Gadkari, Minister for Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation in the Government of India. “This will lead to decrease in imports, increase in exports and making our economy stronger," he added.