Cabinet Approves ₹23,731 Crore
GOBARdhan Scheme to Scale Up
India's Compressed Biogas Economy
Ø Landmark national
scheme to convert India’s organic wealth into clean energy, rural prosperity
and economic growth
Ø Integrated
framework to accelerate Compressed Biogas (CBG) production through assured offtake,
stable pricing, capital assistance, pipeline connectivity and access to finance
Ø Scheme to drive
nearly ten-fold growth in domestic CBG production and strengthen India’s energy
security
Ø Major boost to
farmers, rural entrepreneurs, private investment, waste-to-wealth and Atmanirbhar Bharat
·
Cabinet Approval: The
Union Cabinet, chaired by Prime Minister Narendra Modi,
approved the GOBARdhan (National Circular
Bioenergy Scheme) with a total outlay of ₹23,731 crore.
·
Implementation Period: The
scheme will be implemented from FY 2026-27 to FY 2035-36.
·
Nodal Ministry: The
scheme will be administered by the Ministry of Petroleum and Natural Gas (MoPNG).
·
Objective: To
convert agricultural residue, cattle dung, press mud, municipal organic waste
and other biomass into:
o
Compressed Biogas (CBG)
o
Organic manure
o
Rural income
o
Clean energy
o
Economic value
·
Key Vision:
o
India's waste will fuel India's
growth.
o
Villages will become clean energy
production centres.
o
Farmers will become partners in
India's energy security.
·
Major Target: Increase
domestic Compressed Biogas (CBG) production nearly ten-fold, making CBG
a major component of India's future energy mix.
·
Integrated Support Framework: The
scheme provides:
o
Assured market demand
o
Stable and remunerative pricing
o
Capital assistance
o
Pipeline infrastructure
o
Credit guarantee support
o
Technology and ecosystem
development
Foundation
Built by Earlier Initiatives
·
GOBARdhan builds
upon:
o
SATAT (Sustainable Alternative
Towards Affordable Transportation)
o
Market Development Assistance (MDA) for
organic manure
o
Biomass Aggregation Machinery
(BAM) Scheme
o
Development of Pipeline
Infrastructure (DPI) Scheme
o
Central Financial Assistance
(CFA) under the National Bioenergy Programme
·
These initiatives have already
enabled:
o
Commissioning of over 200 CBG
plants
o
Development of production and
offtake systems
o
Strengthening of the organic
manure value chain
Six
Growth Engines of GOBARdhan
1.
Assured CBG Offtake
·
Establishes a dedicated
procurement framework.
·
City Gas Distribution (CGD)
entities will procure CBG to meet mandatory blending obligations:
o
3% in FY 2026-27
o
4% in FY 2027-28
o
5% from FY 2028-29 onwards
·
Improves project bankability and
investment confidence.
2. Stable
CBG Pricing
·
Introduces an administered CBG
price of ₹2,110 per MMBTU.
·
Backed by Government support and
a market-based cost-sharing mechanism.
·
Provides minimum 10-year
revenue visibility for investors.
3.
Capital Assistance
·
Greenfield projects eligible for
capital support up to ₹2 crore per Ton Per Day (TPD) of installed
CBG capacity.
·
Assistance also covers:
o
Feedstock aggregation
o
Organic manure processing
o
Value-addition infrastructure
·
Brownfield expansion projects are
also eligible.
4.
Pipeline Infrastructure
·
Supports:
o
Cluster-based pipelines
o
Standalone pipelines
·
Connects CBG plants with trunk
pipelines and CGD networks.
·
Reduces transportation costs and
expands market access.
5. Credit
Guarantee Support
·
Dedicated credit guarantee for
MSME-based CBG projects.
·
Expected benefits:
o
Easier institutional finance
o
Lower collateral requirements
o
Greater participation by MSMEs,
women entrepreneurs and first-time developers.
6. CBG
Ecosystem Challenge Fund
·
Supports:
o
Feedstock mapping and assessment
o
Aggregation infrastructure
o
District-level CBG planning
o
Technology adoption
o
Organic manure value addition
o
Capacity building
o
Stakeholder awareness
Expected
Outcomes
·
Nearly 10-fold increase in
domestic CBG production.
·
Improved energy security
by reducing dependence on imported fossil fuels.
·
Large-scale private sector
investment in the bioenergy sector.
·
Higher rural incomes for farmers,
cooperatives and feedstock aggregators.
·
Scientific management of
agricultural residue, cattle dung and municipal organic waste.
·
Reduction in greenhouse gas
emissions.
·
Expansion of the organic manure
economy through greater production of FOM and LFOM.
·
Faster project implementation
through a unified national framework and digital governance.
Overall
Significance
·
Creates a nationwide circular bioeconomy by integrating the entire CBG value chain under
one framework.
·
Promotes waste-to-wealth, Atmanirbhar Bharat, energy security, rural
prosperity, and the vision of Viksit
Bharat.
[ABS News Service/07.08.2026]
The Union Cabinet, chaired by the Prime
Minister Narendra Modi, has approved GOBARdhan, the National Circular Bioenergy Scheme, with a total
outlay of Rs.23,731 crore.
GOBARdhan marks a defining moment in India’s clean energy journey. It will 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.
The Scheme will be implemented from FY
2026-27 to FY 2035-36 and will establish Compressed Biogas as a major pillar of
India’s future energy mix.
Through assured demand, remunerative and
stable pricing, capital assistance, pipeline infrastructure, credit support and
technology development, GOBARdhan will provide the strong
and predictable framework required to take India’s CBG sector to national scale.
The Scheme aims to increase domestic Compressed
Biogas (CBG) production nearly ten-fold, mobilize large-scale private investment
and create a vibrant circular bioeconomy across the country.
It reflects the Government’s clear vision:
India’s waste will fuel
India’s growth.
India’s villages will
become centres of clean energy production.
India’s farmers will
become partners in the nation’s energy security.
From a Strong Foundation
to National Scale:
Over the past several years, the Government
of India has systematically built the foundations of the CBG sector through the
Sustainable Alternative Towards Affordable Transportation (SATAT) initiative, the
Market Development Assistance (MDA) Scheme for organic manure, the Biomass Aggregation
Machinery (BAM) Scheme, the Development of Pipeline Infrastructure (DPI) Scheme
and Central Financial Assistance (CFA) for CBG plants under the National Bioenergy
Programme.
Together, these initiatives have enabled
the commissioning of over 200 CBG plants, established production and offtake systems,
strengthened the organic manure value chain and demonstrated the potential of CBG
across feedstocks and geographies.
GOBARdhan now takes this progress to the next level. Administered by the Ministry
of Petroleum and Natural Gas, the Scheme creates one integrated platform across
the entire CBG value chain. This will enable faster implementation, stronger project
economics and greater certainty for investors, lenders and developers.
A Strategic Opportunity
for India:
India’s demand for natural gas is expanding
across transport, households, industry and commercial sectors. CBG can meet a growing
share of this demand through domestic renewable production, strengthening energy
resilience and reducing dependence on imported fossil fuels.
CBG is chemically equivalent to natural
gas and can be seamlessly integrated into the existing gas ecosystem. It therefore
combines the benefits of a renewable fuel with the reach and utility of India’s
expanding gas infrastructure.
Each CBG plant also creates a local circular
economy around agricultural residue, cattle dung and other organic resources. It
generates opportunities in feedstock supply, transportation, plant operations and
organic manure production, while supporting cleaner waste management and lower greenhouse
gas emissions.
Six Growth Engines under
GOBARdhan
Component 1: Assured
CBG Offtake
GOBARdhan establishes a dedicated CBG Offtake Assurance framework to provide a reliable
and predictable market for producers. Procurement by City Gas Distribution entities
will support achievement of the notified CBG Obligation trajectory of 3% in FY 2026-27,
4% in FY 2027-28 and 5% from FY 2028-29 onwards in the CNG (Transport) and PNG (Domestic)
segments.
The framework converts the blending obligation
into a clear, long-term demand signal for the industry. Consistent implementation
across CGD networks will improve project bankability, support capacity utilization
and encourage long-term private investment.
Component 2: Stable
CBG Pricing Framework
GOBARdhan introduces a stable administered CBG price of Rs.2,110 per Metric Million
British Thermal Unit (MMBTU), supported through a government-backed pricing framework.
The framework provides long-term revenue visibility while protecting consumer affordability
through a combination of Government support and a market-based cost-sharing mechanism.
With a minimum ten-year horizon, the pricing
framework will provide producers with durable revenue certainty, commercially attractive
returns and a stronger business case for investment and capacity expansion.
Component 3: Capital
Assistance
Eligible greenfield CBG projects will
receive capital assistance of up to Rs.2 crore per ton per day (TPD) of installed
CBG capacity.
The support extends beyond core plant
machinery to critical value-chain assets for feedstock aggregation, organic manure
processing and value addition. Brownfield projects expanding their production capacity
will also be eligible.
This component will lower the initial
capital burden, accelerate financial closure and expand participation by private
developers, MSMEs, cooperatives and rural entrepreneurs.
Component 4: Development
of Pipeline Infrastructure
The Scheme supports both cluster-based
and standalone pipeline infrastructure connecting CBG plants with trunk pipelines
and City Gas Distribution networks. Greater pipeline connectivity will reduce evacuation
costs, improve reliability, expand market reach and enable higher utilization of
domestically produced CBG.
Component 5: Credit
Guarantee Support
A dedicated Credit Guarantee mechanism
will strengthen lender confidence and expand the flow of institutional credit to
eligible MSME-based CBG projects.
By sharing a portion of lending risk,
the mechanism will improve access to affordable finance, reduce collateral requirements
and support faster project development.
This will widen participation by MSMEs,
women entrepreneurs and first-time developers, helping build a broad, competitive
and entrepreneurial CBG industry.
Component 6: CBG Ecosystem
Challenge Fund
GOBARdhan establishes a dedicated CBG Ecosystem Challenge Fund to accelerate district-level
implementation and strengthen local value chains across the CBG ecosystem.
The Fund will support feedstock resource
assessment and mapping, feedstock aggregation infrastructure, district-level CBG
development planning, technology adoption, process improvement, value addition of
organic manure, capacity building and stakeholder awareness.
Impact:
GOBARdhan is designed to convert the strong sectoral foundation created over recent
years into a nationwide scale-up of CBG. The Scheme is expected to deliver:
·
Nearly ten-fold growth in domestic CBG production, creating a new pillar
of India’s clean gas economy.
·
Greater energy security through increased domestic production of renewable
gaseous fuel and lower dependence on imported fossil fuels.
·
A new wave of private investment supported by stronger project viability,
stable pricing and improved access to institutional finance.
·
Stronger rural livelihoods through new income opportunities for farmers, feedstock
aggregators, cooperatives and rural entrepreneurs.
·
Scientific waste management through productive use of agricultural residue, cattle
dung, municipal organic waste and other biomass resources.
·
Lower greenhouse gas emissions through replacement of fossil fuels and
productive utilization of organic waste.
·
A larger organic manure economy through greater production, value addition
and utilization of FOM and LFOM.
·
Faster and easier project implementation through one national framework, digital
governance and simplified institutional arrangements.
GOBARdhan marks a decisive step in transforming India’s abundant organic resources
into clean energy, rural prosperity and economic value. By bringing assured demand,
stable pricing, capital assistance, pipeline connectivity, credit support and ecosystem
development under one national framework, the Scheme creates the conditions for
CBG to grow at scale.
Building on the progress already achieved,
GOBARdhan will take India’s CBG journey from a strong
foundation to a nationally scaled clean energy industry. It reflects the Government’s
commitment to energy security, farmers and rural enterprises, waste-to-wealth, Atmanirbhar Bharat and the vision of Viksit
Bharat.