The Union Cabinet has approved GOBARdhan, the National Circular Bioenergy Scheme with a total outlay of Rs 237.31 billion. The scheme will be implemented from financial year (FY) 2026-27 to FY 2035-36 to promote compressed biogas (CBG) by converting agricultural residue, cattle dung, municipal organic waste, press mud, and other biomass into clean fuel and organic manure. It aims to increase domestic CBG production nearly tenfold while mobilising private investment and strengthening the circular bioeconomy.
Furthermore, Component 1 establishes an assured CBG offtake framework with blending targets of 3 per cent in FY 2026-27, 4 per cent in FY 2027-28, and 5 per cent from FY 2028-29 onwards for the compressed natural gas for transport and piped natural gas for domestic segments to provide long-term demand certainty. Component 2 introduces a stable administered CBG price of Rs 2,110 per metric million British thermal unit under a government-backed pricing framework with a minimum 10-year horizon to ensure revenue visibility for producers. Component 3 provides capital assistance of up to Rs 20 million per tonne per day of installed CBG capacity for eligible greenfield projects, while brownfield expansion projects will also be eligible for financial support.
Additionally, Component 4 supports the development of cluster-based and standalone pipeline infrastructure connecting CBG plants with trunk pipelines and city gas distribution networks to improve market access and reduce evacuation costs. Component 5 establishes a dedicated credit guarantee mechanism to facilitate institutional financing and improve access to affordable credit for eligible micro, small and medium enterprises-based CBG projects. Component 6 creates a CBG Ecosystem Challenge Fund to support district-level feedstock mapping, feedstock aggregation infrastructure, technology adoption, organic manure value addition, capacity building, and stakeholder awareness to strengthen the country’s CBG ecosystem.
