Cabinet clears ₹23,731 crore GOBARdhan scheme for compressed biogas

The GOBARdhan scheme will be implemented from FY2026-27 to FY2035-36 and aims to establish compressed biogas as a major pillar of India's future energy mix

The Union Cabinet on Thursday approved the GOBARdhan (National Circular Bioenergy Scheme), a ₹23,731 crore programme aimed at scaling up compressed biogas (CBG) production through assured offtake, stable pricing, capital support, pipeline connectivity and easier access to finance.

 

The scheme will be implemented from FY2026-27 to FY2035-36 and aims to establish compressed biogas as a major pillar of India's future energy mix. In a statement, the Ministry of Petroleum and Natural Gas said the programme would "transform the country's abundant agricultural residue, cattle dung, press mud, municipal organic waste and other biomass resources into clean fuel, organic manure, rural income and national economic value".  

 

It added that the scheme seeks to increase domestic CBG production nearly ten-fold.

Builds on existing CBG initiatives

The government said the scheme builds on earlier initiatives, including the Sustainable Alternative Towards Affordable Transportation (SATAT) programme, the Market Development Assistance scheme for organic manure, the Biomass Aggregation Machinery scheme, the Development of Pipeline Infrastructure scheme and financial assistance for CBG plants under the National Bioenergy Programme. More than 200 CBG plants have already been commissioned under these initiatives. 

Six components of the scheme

The scheme provides an assured offtake mechanism for CBG producers through procurement by City Gas Distribution (CGD) entities. 

 

According to the ministry, this will support the notified CBG blending obligation of 3 per cent in FY2026-27, 4 per cent in FY2027-28 and 5 per cent from FY2028-29 onwards in the CNG (transport) and PNG (domestic) segments. It said the framework would convert the blending obligation into "a clear, long-term demand signal" for the industry and improve project bankability.

 

The scheme also introduces a government-backed administered CBG price of ₹2,110 per MMBTU with a minimum 10-year pricing framework. 

 

The ministry said this would provide "long-term revenue visibility" and "durable revenue certainty" for producers. Eligible greenfield CBG projects will receive capital assistance of up to ₹2 crore per tonne per day of installed capacity, while brownfield projects expanding production will also qualify for support.

 

The scheme further includes support for pipeline infrastructure connecting CBG plants to trunk pipelines and CGD networks, a dedicated credit guarantee mechanism for eligible MSME-based projects, and a CBG Ecosystem Challenge Fund for district-level planning, feedstock assessment, infrastructure, technology adoption, capacity building and stakeholder awareness.