The Central Government is preparing to launch a new incentive programme aimed at significantly expanding compressed biogas (CBG) production, as India seeks to reduce dependence on imported fossil fuels, strengthen energy security and meet its climate commitments.
The proposed scheme, expected to be unveiled this month, will offer higher guaranteed purchase prices for compressed biogas and provide financial support for the development of new production facilities. The initiative is intended to increase the number of operational CBG plants across the country from around 200 at present to nearly 700 over the coming years, Business Standard reported.
Compressed biogas is produced from organic waste such as paddy straw, cattle dung, food waste and household refuse. Policymakers consider it a carbon-negative fuel because it captures methane emissions that would otherwise be released into the atmosphere while also replacing conventional fossil fuels.
Currently, state-owned oil marketing companies and gas utilities purchase CBG at about ₹72 to ₹74 per kilogram before blending it with natural gas supplied to households and vehicles through distribution networks.
India has been working to expand biogas production for several years, but progress has fallen short of earlier targets. The latest push comes at a time when concerns over fuel supply security have intensified. Rising global energy costs and disruptions linked to the Iran conflict have highlighted India’s dependence on imported natural gas, nearly half of which is sourced from overseas markets.
The new programme, named “Sampoorn,” is expected to be implemented by the Ministry of Petroleum and Natural Gas. Its objective is to make biogas projects more financially attractive while encouraging private sector participation in the renewable energy sector.
In 2018, the government had set a target of establishing 5,000 biogas plants by March 2024, with the aim of producing 54 million cubic metres of gas per day. However, the sector has grown more slowly than anticipated.
Earlier this year, the Union Oil Minister stated that India’s 134 operational CBG plants were producing around 930 tonnes of biogas daily, meeting less than one per cent of the country’s overall consumption requirement. The government is now targeting a five per cent share of biogas in total natural gas consumption by the financial year ending March 2029.
The proposed incentives are expected to support projects that use agricultural residues and food waste as feedstock. Materials collected through agencies such as the Food Corporation of India may also be utilised for biogas production.
Several major corporate groups have already entered the sector. Reliance Industries has announced plans to establish 500 compressed biogas plants by 2030 and is working toward bringing 55 facilities with a combined annual capacity of 400,000 tonnes into operation. Meanwhile, Japan-based Suzuki Motor Corporation, the parent company of Maruti Suzuki, has begun setting up biogas plants in Gujarat and plans to develop a network of facilities using cattle dung as feedstock.
Apart from boosting domestic energy production, the programme is also expected to help tackle one of North India’s most persistent environmental challenges—crop residue burning. Farmers often burn paddy straw after harvest to clear fields quickly for the next crop, contributing to severe seasonal air pollution in Delhi and surrounding regions.
The government has previously introduced schemes to promote biogas development and convert agricultural waste into fuel and fertiliser. While those programmes helped establish an initial pipeline of projects, growth was slowed by financing difficulties, feedstock availability issues and concerns over commercial viability.
Officials believe the latest package of higher purchase prices and investment support will improve project economics and attract fresh private investment. Industry participants have long argued that existing returns were insufficient to justify large-scale investments in biogas infrastructure. The enhanced incentives are expected to address those concerns and accelerate the growth of India’s renewable gas sector.
