Praj Industries

Reliance foray in to Biomass/ CBG

Is Thermax is the pioneer in CBG / Biomass Energy or Praj ? Any views ?

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CBG as a source of renewable energy sees traction with entry of Reliance , Adani with Govt support and companies like Praj / Thermax could benefit in coming days

Praj already has technology for 2G Ethanol and the feedstock for CBG remains the same as that of 2G Ethanol namely :

  • Agri-Residues: Rice/Wheat/Corn straws, Cane bagasse/Beet pulp
  • Sugar Processing co-products Like Pressmud /Spentwash (Vinnase)
  • Composite or Mixed Industrial waste streams
    Praj has RenGas technology with multi feed -multi products capability.

In fact Praj has already sold CBG plants.

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INR 2.3 Billion CBG plant by Suzuki Motors in Gujarat


Global Biofuel Alliance in G20

This is interesting in view of the fact that India is pioneering Biofuel usage in India with all kind of permutations and combinations such as :
Petrol-Ethanol blend
BioGas-CNG blend
Biodiesel-Diesel blend
Ethanol-Diesel blend with biodiesel as additive
Biodiesel-Ethanol blend
and so on…
So going forward Bio technology companies like Praj could benefit a lot not only in India but with export potential.

Some more info is available on the Global Biofuel alliance in the link below.

The three founding members of alliance, the US, India and Brazil contribute about 85% of the global production and the 81% of consumption of Ethanol.

A total of 19 countries and 12 international organizations have so far agreed to join the Global Biofuel alliance initiated by Bharat, including both G20 members and non-member countries.

Apart from India, Brazil and the US, the other G20 member countries supporting the initiative are Argentina, Canada, Italy, and South Africa. Bangladesh, Singapore, Mauritius.

The non-G20 interested in joining the alliance are Iceland, Kenya, Guyana, Paraguay, Seychelles, Sri Lanka, and Uganda and Finland. Further, World Bank, Asian Development Bank, World Economic Forum, World LPG Organization, UN Energy for All, UNIDO, Biofutures Platform, International Civil Aviation Organization, International Energy Agency, International Energy Forum, International Renewable Energy Agency, World Biogas Association are the interested international and multilateral organizations.

China and oil producers Saudi Arabia and Russia have however decided not to be part of the alliance- With an eye on the Organization of the Petroleum Exporting Countries (Opec).

Discl: Invested from lower level for the long term.This is not a recommendation for buy or sell.


Adding some market size numbers, found on Google Bard.

The global biofuels market is expected to grow from USD 133.1 billion in 2022 to USD 204.8 billion by 2028, at a CAGR of 6.3% during the forecast period (2022-2028). Source: Biofuels Market Size, Share & Growth Analysis Report, 2030.

Praj is into ‘engineering services’ to this market.

The global market for engineering services to the biofuels and alcohol market is estimated to be worth USD 10.2 billion in 2023 and is projected to reach USD 15.7 billion by 2028, registering a CAGR of 5.2% during the forecast period (2023-2028).

Compare the above market size to Praj’s FY 23 revenues of Rs. 3529 Cr or $ 430 million. There is a lot of potential to be realized here. However, execution ability and growth appetite on part of management and board matters.

Discl.: Invested


GBA nations
Accretive to Praj and this is exports for them. And they have foot in the door.

Margins could improve. Big news I must say via G20

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I have got a different set of estimates. According to IBA (Indian Biogas Association) , The Global Biofuel alliance can create a revenue of 500 Billion USD during next 3 years and for India it could be 200 Billion USD.

Article Link attached below.

Though these are only numbers being estimated by various agencies, But the potential appears to be huge for India.
Recently, even before this alliance was declared, Reliance & Adani have already jumped in to Bio Gas . Sujuki Motors in joint collaboration with Gujarat milk coop federation is to produce Bio Gas out of cow dung ( please refer my previous post ), obviously to fuel Maruti Suzuki cars.

As per Mr R C Bhargava, India with our vast arable land & Agriculture economy , we have a lot of crop waste which can be converted in to Both Bio Gas & Bio ethanol (2G Ethanol).
On the other hand , we also have a vast non- arable land where non food crops can be grown to produce Bio diesel. e.g. Jatropha, Karanja, Mahua, neem, castor to name a few- non food crops can be used to produce Bio diesel.

Both the strategies above could help us reduce our import dependence on crude and also to decarbonise our economy

As rightly said, the only issue with Praj is their appetite to grow. if Low promoter holding could be an issue and leads to less drive , may be some companies like Reliance or Adani should take over …which could also be a possibility which is good for all stake holders.

Discl : Invested since 2021.


This is a very good interview. A must watch to understand thew biofuel growth trajectory in India and across the globe. A very detailed insight on the same and how Praj could benefit from the trend.

  • Huge set of clear opportunities for Praj coming up
  • Biofuels, Green Hydrogen, Green Ammonia, Waste to Energy, etc. projects taking concrete shape
  • No more a CSR play; Projects are being executed from a pure commercial perspective which is an important point of change
  • Opportunities in both Surface + Air Mobility
  • To setup 5 CBG Plants for a customer over 15-18 months
  • JV with IOC (term sheet signed)
  • Govt plans to put up 5000 CBG Plants (US has 200), It is ambitious but achievable. Looking at 100 such plants at a time as an opportunity which is huge in itself and required a 10,000Cr outlay
  • Biofuels is a very new segment and India is way ahead of its peers and showing the way for such transitional fuels
  • CBG cannot be stored and needs to be consumed immediately
  • Ethanol Blending: India is at 11% and targets to be at 20% by 2025
  • By January 2027, all countries involved are mandated to have the ethanol blending in place for airlines and use SAF
  • US also looking for low carbon fuels for SAF (another opportunity)
  • Idea is to grow profitably and not let the bottom line suffer while growing the topline

The last part of the video is excellent where the CEO talks about 2 special moments for the company in the last few months:

  1. Air Asia flight flew from Pune to Delhi on SAF (Sustainable Aviation Fuel) - this was made by concerting sugarcane found outside their R&D Centre
  2. G20 - India showcased its prowess and progress in biofuels - Praj was showcased as the leader from India (although no logo or name was shown as they represented India there)

Disc: Invested


We should also note that biofuels have a tendency to go through hype followed by reality check cycles. In early 2000s VC Vinod Khosla was a big supporter for biofuels. See below Google Bard answer on what happened to that particular hype wave.

" why did vinod khosla support biofuels and later did not?

Vinod Khosla was a big supporter of biofuels in the early 2000s. He invested hundreds of millions of dollars in biofuel companies, and he was optimistic about their potential to replace gasoline. However, his enthusiasm for biofuels waned in the later 2000s and early 2010s, as a number of factors led to the failure of many biofuel companies.

Some of the reasons why Khosla and others became disillusioned with biofuels include:

  • The high cost of producing biofuels. Biofuels are often more expensive to produce than gasoline, and this makes them less competitive in the marketplace.
  • The environmental impact of biofuels. Some biofuels, such as corn ethanol, can actually contribute to greenhouse gas emissions.
  • The competition from other clean energy technologies. Solar and wind power have become increasingly cost-competitive with fossil fuels, and they are seen as more environmentally friendly than biofuels.

As a result of these factors, Khosla has now shifted his focus to other clean energy technologies, such as solar and wind power. He still believes that biofuels have the potential to be a viable alternative to gasoline, but he believes that more research and development is needed before they can be widely adopted.

In a 2014 interview, Khosla said, “I’m still a big believer in biofuels, but I think we need to be more patient. It’s going to take a while for the technology to mature and for the economics to work out.”

It remains to be seen whether biofuels will ever become a major player in the energy market. However, Khosla’s experience is a reminder that even the most promising technologies can face challenges and setbacks."


That is history. now things are different. If you go through the recent KPMG report which describes the entire history of ethanol blending policy in India, perhaps it would explain the reason of disappointment on bio fuel policy.

To be brief and to the point :
(1) Ethanol blending policy for 5% was mandated in 2001. But it never took off for 15 years due to lack of clarity and incentive for farmers and Sugarcane pricing policy. However , Modi Govt perhaps realised the import burden of crude and price fluctuation. The needle started moving from 2014 onwards and by 2018 we achieved 5% and by 2022, we achieved 10% and we are on our way to 20% blending by 2024-25, given this Govt is serious for (a) reducing import dependence (b) Decarbonisation.
The Govt seems to have created the right climate for implementation of various policies.

(2) Given the scale of production , the cost of ethanol has come down and would further come down. And the most important is the volatility in crude prices and our begging to different countries for crude.

(3) Your point on Carbon emissions from ethanol is not true . Ethanol do contain 2 carbon atoms per molecule - but it is much less than petrol ( Average 8 C atoms per molecule ) & Diesel (16 C atoms average per molecule).

So 1 molecule of Ethanol do emit 2 molecules of CO2 when compared with 8 molecules of CO2 of petrol and 16 molecules of CO2 from diesel.
However , we need to grow Plants such as Sugarcane for ethanol. Any plant would absorb CO2 from atmosphere for photosynthesis during day time and so Carbon dioxide emitted by Ethanol burning gets nullified as it gets recycled back to sugarcane plant. so net carbon impact is zero.
so it is considered as a kind of renewable energy.

(4) Solar / wind energy are good. But these can not be directly used in Automobiles. However, Solar / wind energy can be used to produce Green hydrogen by electrolysis of water and hydrogen in turn can be used as automobile fuel as IC engine or fuel cell…

Solar / wind energy can also be stored through battery storage solution ( please go thr Green hydrogen thread to get more inputs) and fed to grid and Green hydrogen can also be converted to electricity by fuel cell …are still the early days.

(5) With regards to Ethanol as automobile fuel… research / technolgy is proven in many other countries such as Brazil , USA and many other countries since last 3 decades. so technology is proven.

,(6) Every available options are being exploited by the world today to combat carbon emission and climate change- EV, Ethanol, Bio Gas - CBG, CNG , Bio diesel, Green hydrogen , solar , wind …

All will co-exist together …
You can also read this thread where issues raised by you have been discussed at length.


Thanks. Good points.
Good article on lifecycle carbon efficiency of various modes
The Truth About Ethanol and Carbon Emissions.

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That is a good one.
Refinery Bio emissions can definitely be minimised e.g. cogeneration of electric energy , use of Wind mills and solar energy…which to the best of my knowledge , all the Ethanol manufacturers are mandatorily required to commission to ensure zero emission…
Even if they don’t do… it is doable.

In my opinion these story have long gestation period and will see the light of the day after 3 to years…

It is already playing out. If you please refer to the screener data,Company has delivered good profit growth of 47.1% CAGR over last 5 years
& Company has been maintaining a healthy dividend payout of 44.9%.

The stock price is already reflected for the company Financial performance.

It is a bio- technology company with strong R&D & support from Govt for product innovation especially in areas of alternate fuels or Biofuels such as Ethanol 1G/ 2G, CBG and doing work on Methanol & a host of other innovative products on pipeline The Govt is planning to reach its ambitious target of 20% ethanol blending by 2024-25 as against 12% now and further encourage flex fuel vehicles, You nay please read the entire thread to get some insights.

While the domestic story is being played out well and it may likely to continue to play out in future as well, however ,
In view of the recent development of Global Biofuel alliance and the fact that it is already in to export of Ethanol plants, we are looking for any Mega trend in coming days in terms of foreign collaboration , export orders etc

Discl: Invested at lower level and holding since 2021 and hence may be biased. it is not a buy or sell recommendation. please apply due diligence before investing


Apart from EBP program, this Global Biofuel alliance will enable Praj to do more international projects, which have higher margins than domestic projects. Also, i feel after ethanol, next big thing is SAF and CBG.


An explainer on India’s ambitions for biofuel and the Global Biofuel Alliance (GBA) that was announced at the G20. Do we need a Global Biofuel Alliance?