The Union Cabinet has approved the National Circular Bioenergy Scheme, GOBARdhan, with an outlay of ₹23,731 crore to accelerate the growth of compressed biogas (CBG) production in India. The scheme will remain in operation until 2036 and aims to create a more stable and predictable environment for investment in the CBG sector.
The government expects the programme to increase India’s domestic CBG production nearly tenfold. It will use agricultural residue, cattle dung, sugar industry waste, municipal organic waste and other forms of biomass to produce compressed biogas. The fuel can be blended with compressed natural gas (CNG) for vehicles and also supplied through piped natural gas (PNG) networks.
GOBARdhan to Support CBG Production and Investment
The new scheme is designed to address some of the key challenges faced by the CBG industry, including uncertain demand, infrastructure gaps and high initial investment requirements.
Under GOBARdhan, the government plans to provide assured offtake, administered pricing, capital support, better pipeline connectivity and improved access to finance. The objective is to give CBG producers greater revenue visibility and encourage more private investment in the sector.
A.R. Shukla, President of the Indian Biogas Association, welcomed the announcement and said the scheme addresses three major requirements of the industry: remunerative pricing, assured offtake and capital support.
The industry currently has around 300 operating CBG plants. The scheme aims to take this number towards 5,000, which could create significant employment opportunities in rural areas and encourage more businesses to enter the waste-to-energy sector.
Pipeline Connectivity Gets Major Push
Pipeline infrastructure is expected to be a key part of the GOBARdhan scheme. Better connectivity will allow CBG plants to supply gas more efficiently and connect with existing trunk pipelines and city gas distribution networks.
The scheme will support both cluster-based and standalone pipeline projects. These connections are expected to reduce evacuation costs, improve the reliability of CBG supply and expand access to potential markets.
The government believes stronger pipeline infrastructure will also help CBG plants operate at higher capacity and make domestically produced biogas more commercially viable.
Fixed CBG Price to Provide Greater Revenue Visibility
Another important feature of the scheme is the introduction of an administered price of ₹2,110 per Metric Million British Thermal Unit (MMBTU) for CBG.
The government aims to provide producers with greater long-term revenue certainty while keeping the fuel affordable for consumers. The pricing mechanism will work alongside government support and market-based cost-sharing arrangements.
The scheme will also provide capital assistance of up to ₹2 crore per tonne per day (TPD) of installed CBG capacity for eligible greenfield projects and existing brownfield plants looking to expand.
Support for Farmers and Rural Entrepreneurs
The financial assistance will cover different parts of the CBG value chain. This includes plant machinery, feedstock collection and aggregation, as well as manure processing.
By reducing the initial investment burden, the government expects the scheme to make it easier for private companies, MSMEs and rural entrepreneurs to set up and expand CBG projects.
The initiative could also create new income opportunities for farmers by turning agricultural waste and other biomass into a commercially useful resource.
From Waste Management to Clean Energy
The GOBARdhan scheme is also closely linked to waste management and environmental goals. Converting agricultural residue, cattle dung and municipal organic waste into CBG can help reduce the amount of waste going untreated while increasing the production of organic manure.
The government expects the programme to support cleaner energy production, reduce greenhouse gas emissions and improve the management of agricultural and municipal waste.
With a long-term framework extending to 2036, the scheme is intended to take India’s CBG sector from its existing base to a much larger domestic industry. It also fits into the broader policy goals of energy security, rural development, waste-to-wealth and reducing dependence on imported energy.