The Ministry of Petroleum and Natural Gas has launched GOBARdhan, a comprehensive Central Sector Scheme designed to accelerate the development of India’s compressed biogas (CBG) industry. Approved by the Union Cabinet on 6 August 2026, the scheme provides a ten-year implementation framework and aims to increase domestic CBG production from current levels to around 5 million metric standard cubic meters per day (MMSCMD) by 2035-36. The initiative brings together multiple support mechanisms—from guaranteed gas procurement to capital assistance and credit guarantees—under a single unified framework.
Key facts
- Total outlay: ₹23,731 crore
- Implementation period: FY 2026–27 to FY 2035–36 (ten years)
- Administered CBG price: ₹2,110 per MMBtu
- CBG Obligation targets: 3% in FY 2026–27, 4% in FY 2027–28, 5% from FY 2028–29 onwards
- Capital assistance: up to ₹2 crore per tonne per day (TPD) of installed CBG capacity for greenfield projects
- Pipeline support: up to 80% of capital expenditure for CBG cluster pipelines; up to 50% for standalone plant connections
- Credit guarantee: covers up to 85% of outstanding amount at default, capped at ₹20 crore per MSME project (₹25 crore for women-led projects)
- Current CBG plants operational: 217+ with installed capacity exceeding 1,700 TPD as of August 2026
- Expected outcomes: ₹40,000 crore foreign-exchange savings, ₹75,000 crore GDP addition, 1.5 lakh jobs, replacement of 10 million tonnes fossil fuel, 40 million tonnes CO₂ reduction
What the scheme offers
GOBARdhan consolidates six key support pillars for CBG project developers. First, it guarantees a market for CBG through an offtake assurance framework. City Gas Distribution (CGD) entities—companies that supply piped natural gas to households and transport—are required to procure increasing percentages of CBG, starting at 3% of their CNG and PNG volumes in 2026-27, rising to 5% from 2028-29 onwards. This obligation ensures producers have a dependable buyer.
Second, the scheme fixes an administered CBG price at ₹2,110 per MMBtu, reducing revenue uncertainty for project developers and lenders. This stable pricing framework removes the volatility that has previously discouraged investments in the sector.
Third, greenfield CBG projects receive capital assistance of up to ₹2 crore per TPD of capacity. This covers machinery, feedstock aggregation infrastructure, and equipment for organic manure value-addition. Fourth, the scheme addresses a critical infrastructure gap by offering up to 80% capital cost support for pipelines connecting CBG clusters to national trunk networks, and up to 50% support for standalone plants connecting to CGD networks.
Fifth, dedicated credit guarantee support is available exclusively for MSME-based CBG projects, covering up to 85% of loan amounts in default. The per-project guarantee limit is ₹20 crore for general MSMEs and ₹25 crore for women-led enterprises, explicitly incentivising female entrepreneurs.
Sixth, a CBG Ecosystem Challenge Fund supports technology innovation, capacity building, feedstock assessment, and district-level ecosystem development—activities that strengthen the entire sector rather than individual projects.
Eligibility and how it works
The scheme is designed to accommodate diverse stakeholders. Farmers, cooperatives, dairy farms (gaushalas), local enterprises and private companies can participate in feedstock collection, aggregation, transportation and CBG processing. The circular model links agriculture and energy sectors: crop residue and cattle dung that would otherwise be burned or wasted become feedstock for biogas plants, generating both energy and organic manure as a valuable byproduct.
A Unified GOBARdhan Portal has been created to streamline applications and reduce administrative complexity. A comprehensive GOBARdhan Handbook guides project developers, State Governments and financial institutions through scheme processes and eligibility criteria.
Why this matters
India currently imports nearly half its natural gas requirements, creating a significant foreign-exchange burden and energy security vulnerability. CBG production from domestic agricultural and organic waste offers a sustainable alternative that strengthens self-reliance. The scheme also addresses problems that hindered earlier CBG growth: volatile revenues without price certainty, fragmented support from multiple ministries, limited long-term policy visibility, and difficulty securing feedstock and offtake agreements.
For rural India, the scheme generates multiple income streams. Farmers earn money selling feedstock, cooperatives gain processing revenue, and organic manure production provides agricultural benefits while reducing chemical fertiliser dependence. The scheme is projected to create over 1.5 lakh jobs across feedstock supply chains and CBG production.
Implementation roadmap
State Governments play a critical implementation role. They must enable supportive CBG policies, conduct feedstock assessments, allocate suitable land, expedite project approvals and provide infrastructure support. The ten-year framework provides investors and lenders with stable visibility, encouraging long-term capital commitments that can only build a sector at scale. With 217 CBG plants already operational, the scheme aims to multiply this base substantially, transforming India’s biogas sector from a fragmented collection of projects into a coordinated national energy resource.