Biogas industry is expecting fiscal support in the upcoming Union Budget 2026 that will be presented by Union Finance Minister Nirmala Sitharaman on February 1, reports The Hindu businessline.
Under the banner of the Indian Biogas Association, the industry has urged the government to increase project incentives by raising central financial assistance, support the market for fermented organic manure, encourage organic farming, and enable carbon income through a green certificate system.
In a representation to the Finance Ministry, the association said the sector now requires stronger financial backing, quicker execution of policies, and easier access to funding to unlock large-scale private investment and create income opportunities in rural areas.
The industry pointed out that the capital cost of compressed biogas plants has risen by more than 50% since the subsidy scheme was introduced in 2014. In view of this, it has proposed raising the capital subsidy to at least ₹6 crore for every 4.8 tonnes per day of compressed biogas capacity and increasing the overall assistance limit to ₹25 crore per project. This, it said, would support projects of up to 20 tonnes per day, backed by a minimum funding pool of ₹10,000 crore. At present, the scheme provides ₹4 crore per 4.8 tonnes per day, with a cap of ₹10 crore per project.
On promoting fermented organic manure and organic farming, the association highlighted concerns over soil health, noting that average soil organic carbon levels in India have fallen below 0.4%, well under the healthy level of 1.5% or more. It said large government spending on chemical fertiliser subsidies has not helped improve soil quality and suggested that diverting even a small share of this support toward organic manure or carbon-linked incentives could restore soil health, reduce dependence on imports, and encourage climate-friendly farming.
The industry also called for a clear framework to allow biogas producers to earn income by selling carbon credits in both domestic and international markets. It said such a move would support India’s climate goals while providing additional revenue for plant operators.
In addition, the association urged the government to speed up laws related to renewable energy and green certificate trading so that clean energy projects can become more financially viable.
