The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the GOBARdhan National Circular Bioenergy Scheme with a total outlay of ₹23,731 crore, with the government projecting savings of over ₹40,000 crore in foreign exchange, addition of more than ₹75,000 crore to national GDP, and the creation of 1.5 lakh jobs, according to an official statement released on Friday, 7 August. The scheme will run from FY27 to FY36, establishing compressed biogas (CBG) as a central pillar of India's future energy mix.

What the Scheme Promises

The GOBARdhan scheme is designed to expand compressed biogas production nearly ten-fold over a decade, mobilise private investment, and build a circular bioeconomy. A dedicated CBG Offtake Assurance framework will guarantee market access for producers, with an administered price set at ₹2,110 per MMBTU. Capital assistance of up to ₹2 crore per TPD and 85 per cent credit guarantees for MSMEs are also on offer, lowering the entry barrier for smaller operators.

Clean, domestically produced gas from the scheme is projected to displace 10 million metric tonnes of fossil fuel use. Diverting organic waste from landfills is expected to cut more than 40 MT of CO₂ emissions and generate 250 MMT of organic fertiliser, according to the official statement.

CBG Obligation Targets and Market Integration

City Gas Distribution entities will be required to procure CBG in line with a notified obligation trajectory — 3 per cent in FY27, 4 per cent in FY28, and 5 per cent from FY29 onwards — in the CNG (Transport) and PNG (Domestic) segments. Because CBG is chemically equivalent to natural gas, it can be integrated directly into India's existing gas infrastructure without requiring separate distribution networks.

Each CBG plant is also expected to create a local circular economy around agricultural residue, cattle dung, and other organic inputs, generating livelihoods in feedstock supply, transportation, plant operations, and organic manure production.

Where Things Stand on the Ground

According to the GOBARdhan Unified Registration Portal, a total of 1,908 CBG/Bio-CNG plants have been registered across the country. Of these, 217 plants have been commissioned and are currently producing 0.4 million standard cubic metres per day (MMSCMD), while 339 plants are under construction. Operators seeking to set up or run a CBG/Bio-CNG plant can register through the portal to access benefits and support from the Ministry of Petroleum and Natural Gas (MoPNG).

Why This Matters for India's Energy Strategy

India's natural gas demand is rising across transport, households, industry, and commercial sectors. This comes amid a broader national push to reduce dependence on imported fossil fuels and cut carbon emissions. Notably, this is the first scheme to combine a guaranteed offtake framework with capital subsidies and MSME credit support in the biogas space — a structural departure from earlier, more fragmented bioenergy incentives. Whether the ten-fold production expansion target can be met will depend heavily on feedstock aggregation and private sector participation at scale.