Image Source: IEEFA

The Union Cabinet has approved GOBARdhan, the National Circular Bioenergy Scheme, with a financial outlay of Rs.23,731 crore to support the expansion of Compressed Biogas (CBG) production in India.

The scheme will be implemented from financial year 2026-27 to 2035-36 and will focus on developing infrastructure and financial support mechanisms for producing CBG from agricultural residue, cattle dung, municipal organic waste and other biomass sources.

The Ministry of Petroleum and Natural Gas will administer the scheme. According to the government, GOBARdhan aims to increase domestic CBG production nearly ten-fold by improving market access, supporting investment and strengthening supply chains.

Scheme Introduces Support Measures For CBG Producers

GOBARdhan includes measures covering fuel procurement, pricing, project financing and infrastructure development.

Under the scheme, City Gas Distribution entities will provide an assured market for CBG producers through a notified blending obligation. The obligation is set at 3% for financial year 2026-27, 4% for 2027-28 and 5% from 2028-29 onwards in the CNG transport and domestic PNG segments.

The scheme also provides for an administered CBG price of Rs.2,110 per Metric Million British Thermal Unit (MMBTU). The government said the pricing framework is intended to provide revenue certainty for producers while considering consumer affordability.

Eligible greenfield and expansion projects may receive capital assistance of up to Rs.2 crore per tonne per day of installed CBG capacity. The support will include selected activities related to plant infrastructure, feedstock aggregation and organic manure processing.

Focus On Waste Management And Rural Supply Chains

CBG is a renewable fuel produced from organic materials and can be used within the existing natural gas ecosystem after processing. The government has stated that increased CBG production could help diversify energy sources and reduce dependence on imported fossil fuels.

The scheme builds on earlier initiatives, including the Sustainable Alternative Towards Affordable Transportation (SATAT) programme, financial support for bioenergy projects and measures supporting organic manure production.

The government said more than 200 CBG plants have been commissioned under previous programmes. GOBARdhan is intended to bring these efforts under a single framework covering production, transportation, financing and market linkages.

Future Implementation And Expected Outcomes

The scheme includes six components: assured CBG offtake, pricing support, capital assistance, pipeline infrastructure, credit guarantee support and a CBG Ecosystem Challenge Fund.

The challenge fund will support activities such as feedstock assessment, district-level planning, technology adoption and capacity building.

The government expects the programme to support rural enterprises, improve organic waste management and increase the use of renewable gas. The scale and impact of the scheme will depend on project implementation, investment participation, availability of feedstock and development of supporting infrastructure.

Image Source: Pralhad Joshi 'X' Account/ @JoshiPralhad