Written by PPL Newsroom• October 3, 2026• 5:43 am• Policy

GOBARdhan scheme launched to raise India’s compressed biogas output nearly ten-fold

The Rs 23,731-crore programme, cleared by Cabinet in August and launched on 1 October, offers producers assured buyers, a fixed gas price and capital support.

Petroleum and Natural Gas Minister Hardeep Singh Puri formally launched GOBARdhan on 1 October. The Union Cabinet approved the scheme on 6 August 2026 with an outlay of ₹23,731 crore, and it provides a ten-year framework from FY 2026–27 to FY 2035–36. Its aim is to turn farm residue, cattle dung and municipal waste into a mainstream fuel.

What the scheme sets out to do

The target is to raise domestic compressed biogas (CBG) production nearly ten-fold, to around 5 MMSCMD (million standard cubic metres a day). The scheme starts from an existing base. Reports say 217 plants have already been commissioned. Official figures from late July put their combined capacity at about 1,773 tonnes per day.

The money is spread across six components. These are offtake assurance, a pricing framework, capital assistance, pipeline infrastructure, credit guarantee support and a CBG ecosystem challenge fund.

Guaranteed buyers: Blending requirements for CNG used in transport and piped gas for homes are set at 3% in 2026-27, 4% in 2027-28 and 5% from 2028-29. City gas companies must therefore buy CBG, which gives producers a dependable market.
Stable price: The administered price is Rs 2,110 per MMBTU. MMBTU is a standard unit for measuring and pricing gas energy. The price is meant to make producers’ revenue predictable.
Upfront support: Capital assistance is available up to Rs 2 crore per tonne per day of installed capacity.
Easier loans: A credit guarantee will cover up to 85 per cent of eligible loans for MSME-based CBG projects.

Why the government is consolidating

GOBARdhan began in 2018 under the Swachh Bharat Mission (Grameen) as a way to convert village bio-waste into biogas and bio-slurry. The CBG ecosystem was earlier spread across four ministries, and the government has now brought the whole scheme under the Ministry of Petroleum and Natural Gas. The ministry says this allows a single approach to policy and implementation. Component-wise operational guidelines were notified on 15 September 2026.

What this means for India

India imports a large share of its natural gas, which accounts for roughly half of national consumption. Home-grown CBG can replace some of it. Officials estimate foreign exchange savings of more than ₹40,000 crore and displacement of about ten million metric tonnes of fossil fuel. For farmers and village enterprises, the scheme creates a market for crop residue and dung. It could also reduce the open burning of crop waste, which officials list among the expected benefits.

What happens next

The delivery details will decide how much of this is achieved. The guidelines are in place, and the first mandatory blending target of 3% applies in the current financial year. Plants will need reliable feedstock supply, access to pipelines and timely finance. According to the government, earlier initiatives enabled over 200 plants and built production and offtake systems. GOBARdhan now has to extend that experience to many more regions and waste types over the next decade.