New Delhi: The Union Cabinet has approved the **GOBARdhan (National Circular Bioenergy Scheme)** with an outlay of ₹23,731 crore. The scheme aims to expand the production of compressed biogas (CBG) by converting agricultural residue, cattle dung, municipal organic waste and other biomass into clean fuel.
The programme will run from 2026-27 to 2035-36 and is expected to make compressed biogas a key part of India’s clean energy mix. It also seeks to create new income opportunities for farmers, support rural businesses and reduce the country’s dependence on imported fossil fuels.
Turning waste into a valuable resource
India generates millions of tonnes of organic waste every year. Much of it is either burnt, dumped or left unused. Under the GOBARdhan scheme, this waste will be processed to produce compressed biogas and organic manure instead of becoming an environmental burden.
The government believes the initiative can improve waste management, reduce pollution and create additional income for farmers and local communities. It is also expected to support India’s transition towards cleaner and renewable sources of energy.
Built on earlier initiatives
The new scheme builds on several programmes launched over the past few years, including the SATAT initiative, financial support for CBG plants, biomass collection schemes and pipeline infrastructure projects.
More than 200 compressed biogas plants have already been commissioned under these initiatives. GOBARdhan brings these efforts under one national framework to improve coordination and speed up future projects.
The scheme will be implemented by the **Ministry of Petroleum and Natural Gas**, which will oversee the entire compressed biogas value chain.
Meeting India’s growing energy demand
India’s demand for natural gas continues to rise across transport, industries and households. Compressed biogas offers a renewable alternative because it has properties similar to natural gas and can be supplied through the existing gas distribution network.
Officials believe increasing domestic CBG production will strengthen India’s energy security while reducing the need for imported fuels. Every new plant is also expected to generate local employment in feedstock collection, transportation, plant operations and organic manure production.
Six key pillars of the scheme
The government has built the scheme around six major components to encourage investment and improve project viability.
1. Assured market for producers
City Gas Distribution companies will procure compressed biogas under a phased blending target. The obligation has been fixed at 3 per cent in 2026-27, 4 per cent in 2027-28, and 5 per cent from 2028-29 onwards for transport and domestic gas supplies.
Officials say assured demand will improve confidence among investors and help new projects secure financing.
2. Stable pricing
The Cabinet has approved an administered price of ₹2,110 per MMBTU for compressed biogas under a government-backed pricing mechanism.
A long-term pricing framework is expected to provide revenue certainty for producers while maintaining affordability for consumers.
3. Capital support
New compressed biogas plants will receive capital assistance of up to **₹2 crore per tonne per day** of installed production capacity.
Financial support will also cover feedstock collection systems and organic manure processing facilities. Existing plants expanding their capacity will also qualify for assistance.
4. Pipeline connectivity
The scheme provides financial support for connecting compressed biogas plants with trunk pipelines and City Gas Distribution networks.
Better connectivity is expected to lower transportation costs and improve market access for producers.
5. Credit guarantee
A dedicated credit guarantee mechanism will help MSMEs and first-time developers secure loans for compressed biogas projects.
The government expects easier access to finance to encourage greater participation from cooperatives, rural entrepreneurs and women-led enterprises.
6. District-level challenge fund
A new CBG Ecosystem Challenge Fund will support district-level planning, feedstock mapping, technology adoption, capacity building and awareness programmes.
The fund will also promote better utilisation of organic manure and strengthen local supply chains.
Expected impact
The government expects the scheme to increase India’s compressed biogas production nearly tenfold over the next decade. Higher domestic production could reduce dependence on imported natural gas while supporting cleaner energy generation.
The programme is also expected to attract fresh private investment into the bioenergy sector. Farmers, cooperatives and rural entrepreneurs could benefit from new business opportunities linked to biomass collection, transportation and processing.
Officials believe the scheme will encourage scientific management of agricultural residue, cattle dung and municipal organic waste. It is also expected to reduce greenhouse gas emissions by replacing fossil fuels with renewable biogas.
A long-term push for bioenergy
With GOBARdhan, the government is attempting to bring together pricing support, assured demand, financial assistance, pipeline infrastructure and easier access to credit under one national programme.
If implemented effectively, the scheme could accelerate India’s bioenergy sector while improving rural incomes, strengthening waste management and expanding the country’s clean energy capacity over the next decade.