Written by PPL Newsroom• October 4, 2026• 10:16 am• Policy

India launches Rs 23,731 crore GOBARdhan scheme to scale up compressed biogas tenfold

The ten-year programme offers city gas buyers, fixed pricing and capital support to producers turning crop residue, dung and urban waste into fuel.

Petroleum and Natural Gas Minister Hardeep Singh Puri has formally launched GOBARdhan, the National Circular Bioenergy Scheme. He unveiled it on 1 October, together with a unified portal and a handbook meant to streamline implementation. It aims to turn agricultural residue, cattle dung, press mud and municipal organic waste into compressed biogas (CBG), organic manure and rural income.

The numbers behind the scheme

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the scheme with an outlay of Rs 23,731 crore. PIB, the government’s information agency, posted the announcement on 6 August 2026. It will run from FY 2026-27 to FY 2035-36 and targets a nearly ten-fold rise in domestic CBG production.

Several features are meant to give producers a more predictable market:

Guaranteed buyers. City gas distribution entities must meet a CBG blending obligation of 3 per cent in FY 2026-27 and 4 per cent in FY 2027-28. It rises to 5 per cent from FY 2028-29, in the CNG (transport) and PNG (domestic) segments. In practical terms, gas utilities serving vehicles and household kitchens must buy a growing share of biogas.
Fixed price. The Cabinet approved an administered CBG price of Rs 2,110 per MMBTU. The government has said this is equivalent to Rs 105 per kilogram.
Capital support. Eligible projects can get up to Rs 2 crore for each tonne per day of installed CBG capacity.
Credit cover. Credit guarantees cover up to 85 per cent of the outstanding amount at default for eligible MSME projects.

The scheme has six interventions: offtake assurance, a pricing framework, capital assistance, pipeline infrastructure, credit guarantee support and a CBG Ecosystem Challenge Fund. The pipeline component connects CBG plants to gas networks, and the challenge fund supports district-level implementation and feedstock value chains.

Building on earlier programmes

GOBARdhan is not starting from scratch. According to the government, earlier initiatives have already led to over 200 CBG plants being commissioned. The new scheme builds on SATAT, the Market Development Assistance scheme, the Biomass Aggregation Machinery scheme, the pipeline infrastructure scheme and central financial assistance under the National Bioenergy Programme.

One structural change is administrative. The CBG ecosystem was earlier spread across four ministries. The government has now consolidated it under the Ministry of Petroleum and Natural Gas. According to the ministry, the design addresses volatile revenues, fragmented support, limited policy visibility, feedstock assurance, organic manure offtake and access to finance.

What this means for India

For India, GOBARdhan links waste management, farm incomes and energy security. Crop residue, cattle dung and city organic waste become inputs for fuel and manure. The government says higher domestic output of renewable gas will reduce dependence on imported fossil fuels. Farmers, cooperatives and rural entrepreneurs are among the intended beneficiaries. The scheme’s success will depend on whether new plants are set up, get connected to gas networks and secure a steady supply of feedstock. Readers can follow progress on the unified GOBARdhan portal.

What happens next

With the launch done, the focus moves to getting projects registered and built. The Unified GOBARdhan Portal has gone live to bring applications into a single channel and make processing more transparent. The handbook serves as a reference guide for developers, state governments and financial institutions.

The blending obligation is set to rise year by year, so the pace at which plants come online will determine whether city gas companies can meet it. The ten-year horizon is intended to give investors and lenders greater certainty.