The Union Cabinet, chaired by the Prime Minister Narendra Modi, has approved GOBARdhan, the National Circular Bioenergy Scheme for Compressed Biogas (CBG) with a total outlay of Rs. 23,731 crore.

GOBARdhan marks a defining moment in India’s clean energy journey. It will transform the country’s abundant agricultural residue, cattle dung, press mud, municipal organic waste, and other biomass resources into clean fuel, organic manure, rural income, and national economic value.

The Scheme will be implemented from FY2026-27 to FY2035-36 and will establish Compressed Biogas as a major pillar of India’s future energy mix.

Through assured demand, remunerative and stable pricing, capital assistance, pipeline infrastructure, credit support and technology development, GOBARdhan will provide the strong and predictable framework required to take India’s CBG sector to national scale.

The Scheme aims to increase domestic Compressed Biogas (CBG) production nearly ten-fold, mobilize large-scale private investment and create a vibrant circular bioeconomy across the country.

Over the past several years, the Government of India has systematically built the foundations of the CBG sector through the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative, the Market Development Assistance (MDA) Scheme for organic manure, the Biomass Aggregation Machinery (BAM) Scheme, the Development of Pipeline Infrastructure (DPI) Scheme and Central Financial Assistance (CFA) for CBG plants under the National Bioenergy Programme. 

Together, these initiatives have enabled the commissioning of over 200 CBG plants, established production and offtake systems, strengthened the organic manure value chain, and demonstrated the potential of CBG across feedstocks and geographies. 

GOBARdhan now takes this progress to the next level. Administered by the Ministry of Petroleum and Natural Gas, the Scheme creates one integrated platform across the entire CBG value chain. This will enable faster implementation, stronger project economics and greater certainty for investors, lenders and developers. 

India’s demand for natural gas is expanding across transport, households, industry and commercial sectors. CBG can meet a growing share of this demand through domestic renewable production, strengthening energy resilience and reducing dependence on imported fossil fuels. 

Each CBG plant also creates a local circular economy around agricultural residue, cattle dung and other organic resources. It generates opportunities in feedstock supply, transportation, plant operations and organic manure production, while supporting cleaner waste management and lower greenhouse gas emissions. 

Six Growth Engines under GOBARdhan

Assured CBG Offtake: Procurement by City Gas Distribution entities will support achievement of the notified CBG Obligation trajectory of 3% in FY 2026-27, 4% in FY 2027-28 and 5% from FY 2028-29 onwards in the CNG (Transport) and PNG (Domestic) segments. 

Stable CBG Pricing Framework: GOBARdhan introduces a stable administered CBG price of Rs. 2,110 per Metric Million British Thermal Unit (MMBTU), supported through a government-backed pricing framework. With a minimum ten-year horizon, the pricing framework will provide producers with durable revenue certainty, commercially attractive returns and a stronger business case for investment and capacity expansion. 

Capital Assistance: Eligible greenfield CBG projects will receive capital assistance of up to Rs. 2 crore per ton per day (TPD) of installed CBG capacity. 

Development of Pipeline Infrastructure: The Scheme supports both cluster-based and standalone pipeline infrastructure connecting CBG plants with trunk pipelines and City Gas Distribution networks. 

Credit Guarantee Support: A dedicated Credit Guarantee mechanism will strengthen lender confidence and expand the flow of institutional credit to eligible MSME-based CBG projects. 

CBG Ecosystem Challenge Fund: GOBARdhan establishes a dedicated CBG Ecosystem Challenge Fund to accelerate district-level implementation and strengthen local value chains across the CBG ecosystem.