Govt rolls out GOBARdhan guidelines, assures full CBG offtake, sets price

Ensures full offtake of CBG plant and introduces a pricing mechanism

The government has notified detailed operational guidelines for the ₹23,731 crore GOBARdhan scheme aimed at developing India’s compressed biogas (CBG) sector, ensuring full offtake of a CBG plant and also introducing a pricing mechanism.

 

The Union Cabinet had last month approved the scheme to convert India’s farm refuse and municipal waste into clean fuel and organic manure. The scheme will make use of the country’s agricultural residue, cattle dung, press mud, organic waste in cities, and other biomass resources.

 

Under the scheme guidelines, CBG producers have been assured offtake of up to 100 per cent of the CBG available for sale, subject to technical and operational feasibility.

  

The guidelines also introduce a mandatory CBG obligation for city gas distribution (CGD) companies supplying gas to compressed natural gas (CNG) and domestic piped natural gas (PNG) segments.

 

The obligation has been set at 3 per cent for FY27, 4 per cent for FY28 and 5 per cent from FY29 onwards.

 

The government also introduced a new CBG pricing framework.

 

An initial Administered CBG Price (ACP) of ₹2,110 per million British thermal unit (MBTU), equivalent to about ₹98 per kg of CBG at 95 per cent methane content, excluding taxes and compression charges, has been set for a minimum of 10 years. That is, until March 31, 2036, unless extended or otherwise modified. 

 

The government will provide CBG affordability support to the Synchro Operator for 10 years, capped at ₹10 per kg, to help bridge the affordability gap, the guidelines state.

 

Under the rules, there would be no take-or-pay obligation for a CGD entity in the first year. From the second year, it will have a take-or-pay obligation of up to 90 per cent of the annual nominated quantity.

 

CBG producers, meanwhile, will face a supply-or-pay obligation of up to 50 per cent of annual contracted quantity from the second year.

 

For new CBG plants, the government has decided to provide financial assistance of ₹1.25 crore per tonne per day (TPD) of eligible CBG capacity. This is subject to an overall cap of ₹30 crore per project.

 

Existing biogas plants upgraded to produce CBG can receive ₹0.60 crore per TPD, capped at ₹5 crore per project.

 

The guidelines also mandate real-time monitoring, online gas-quality measurement and automatic shut-off systems for beneficiaries.  

The rulebook

• CBG producers assured offtake of up to 100% of the CBG available for sale
• Introduction of amandatory CBG obligation for CGD companies supplying gas to CNG and domestic PNG segments
• Introduction of a new CBG pricing framework; initial Administered CBG price of ₹98 per kg of CBG at 95% methane content, set for 10 years
• Financial assistance of ₹1.25 crore per TPD, for new CBG plants