New Delhi: The Union Cabinet on Thursday approved the GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) National Circular Bioenergy Scheme with a total outlay of Rs 23,731 crore to accelerate compressed biogas (CBG) production and strengthen India’s clean energy transition.
Chaired by Prime Minister Narendra Modi, the Cabinet cleared the scheme for implementation from FY2026-27 to FY2035-36. The programme aims to convert agricultural residues, cattle dung, sugar industry press mud, municipal organic waste and other biomass into compressed biogas, organic manure and additional rural income, the government said.
Administered by the Ministry of Petroleum and Natural Gas, the scheme brings the entire CBG value chain under a single framework covering assured offtake, pricing, capital support, infrastructure, credit and ecosystem development.
Under the scheme, City Gas Distribution (CGD) entities will be required to procure compressed biogas to meet mandatory blending targets of 3% in FY2026-27, 4% in FY2027-28 and 5% from FY2028-29 onwards in the CNG (transport) and PNG (domestic) segments.
The government has also introduced an administered price of Rs 2,110 per Metric Million British Thermal Unit (MMBTU) for CBG under a pricing framework with a minimum tenure of 10 years to provide long-term certainty for investors.
Greenfield CBG projects will be eligible for capital assistance of up to Rs 2 crore per tonne per day (TPD) of installed capacity. Financial support will also be available for feedstock aggregation, organic manure processing facilities and eligible brownfield capacity expansion projects.
The scheme includes provisions for developing pipeline infrastructure to connect CBG plants with trunk pipelines and city gas distribution networks, a credit guarantee mechanism to facilitate institutional lending for MSME-based projects, and a CBG Ecosystem Challenge Fund to support district-level implementation, feedstock mapping and capacity building.
The government said the programme builds on earlier initiatives such as the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative and the Market Development Assistance Scheme for organic manure, under which more than 200 CBG plants have already been commissioned.
According to the government, the GOBARdhan scheme is expected to increase domestic compressed biogas production nearly ten-fold over the next decade while improving energy security, attracting private investment, creating rural employment, promoting scientific waste management and expanding the organic manure sector.
