The Union Cabinet has approved a ₹23,731 crore GOBARdhan scheme to grow India’s compressed biogas (CBG) industry over ten years, from FY27 to FY36. The Ministry of Petroleum and Natural Gas will run it.
The scheme pulls together CBG support that was spread across four ministries into a single national programme for circular bioenergy. City gas distribution companies will have to source CBG for 3 percent of their CNG and PNG volumes in FY27, 4 percent in FY28 and 5 percent from FY29.
CBG will be bought at an administered price of ₹2,110 per MMBTU, or ₹105 per kg, fixed for at least ten years. New plants can get capital support of up to ₹2 crore per tonne per day of capacity, and expansions of existing plants also qualify. Loans to small CBG producers get credit guarantees of up to 85 percent. The scheme also funds pipeline connections and sets up a CBG Ecosystem Challenge Fund.
So far, 1,908 plants have registered, 217 have been commissioned and produce 0.4 MMSCMD, and 339 are being built. The government expects output to rise almost tenfold, replacing 10 MMT of fossil fuel, cutting more than 40 MT of carbon dioxide, saving over ₹40,000 crore in foreign exchange and creating more than 1.5 lakh jobs.
Market Research Outlook: A fixed price for ten years and compulsory offtake fix the two problems that held back India’s biogas market: uncertain revenue and weak demand. Expect a wave of plant financing, especially near cities with dense gas networks. Feedstock collection and logistics now become the main hurdle, along with steady supply of agricultural residue and cattle dung.
