New Delhi: Union Minister of Petroleum and Natural Gas Hardeep Singh Puri has launched GOBARdhan, the Central Sector Scheme for the development of India’s Compressed Biogas (CBG) sector.
Approved by the Union Cabinet on August 6, 2026, the scheme has a total outlay of ₹23,731 crore and will be implemented over a 10-year period from FY 2026-27 to FY 2035-36. It aims to increase domestic CBG production nearly ten-fold to around 5 MMSCMD, while providing greater certainty to investors and lenders.
The launch brought together representatives from Central Ministries, State Governments, CBG developers, oil and gas companies, City Gas Distribution (CGD) entities, financial institutions, cooperatives, technology providers and other stakeholders.
GOBARdhan Scheme Brings CBG Support Under One Framework
The scheme brings multiple interventions for the CBG sector under an integrated framework, covering assured offtake, pricing, capital assistance, pipeline connectivity, credit support and ecosystem development.
The six key interventions under GOBARdhan are:
- CBG Offtake Assurance
- CBG Pricing Framework
- Capital Assistance for CBG Projects
- Development of Pipeline Infrastructure
- Credit Guarantee Support
- CBG Ecosystem Challenge Fund
The scheme places the Ministry of Petroleum and Natural Gas (MoPNG) as the single nodal ministry for the framework, aiming to streamline policy implementation and sector development.
Read also: GOBARdhan Scheme a ‘Gamechanger’ for Clean Energy Transition, Says Petronet LNG CEO A.K. Singh
GOBARdhan Scheme to Provide Assured CBG Offtake
Under the offtake framework, CBG plants will be mapped to identified City Gas Distribution geographical areas or CBG clusters, creating a defined route to market.
The CBG Obligation (CBO) will place procurement responsibility on CGD entities for the CNG (Transport) and PNG (Domestic) segments.
The prescribed procurement obligation is:
- 3% in FY 2026-27
- 4% in FY 2027-28
- 5% from FY 2028-29 onwards
This framework is intended to provide greater certainty regarding the market for CBG producers.
Administered CBG Price Fixed at ₹2,110 per MMBtu
The scheme introduces an administered CBG price of ₹2,110 per MMBtu, providing greater revenue visibility to CBG producers.
The pricing framework is intended to address concerns around revenue volatility and provide a more predictable operating environment for the sector.
Capital Assistance for Greenfield CBG Projects
Eligible greenfield CBG projects can receive capital assistance of up to ₹2 crore per tonne per day (TPD) of installed CBG capacity.
The assistance can cover areas including:
- Plant machinery
- Feedstock aggregation
- FOM/LFOM processing
- Manure value-addition equipment
The support is designed to help reduce initial capital requirements for eligible projects and encourage additional investment in the CBG sector.
Pipeline Infrastructure Support Under GOBARdhan
The scheme also addresses gas evacuation and connectivity constraints by providing support for pipeline infrastructure.
Under the framework:
- Up to 80% of eligible capital expenditure can be supported for pipelines connecting CBG clusters to trunk pipeline networks.
- Up to 50% of eligible capital expenditure can be supported for standalone plants connecting to CGD networks.
This infrastructure support is aimed at improving the connectivity of CBG plants with existing gas networks.
Credit Guarantee Support for MSME-Based CBG Projects
GOBARdhan includes a dedicated credit guarantee mechanism for eligible MSME-based CBG projects.
The guarantee can cover up to 85% of the outstanding amount at default, subject to prescribed project limits.
The guarantee cap is:
- ₹20 crore per project for general MSME projects
- ₹25 crore per project for women-led MSME projects
The higher limit for women-led MSME projects is intended to provide additional financial support for women entrepreneurs entering the CBG sector.
CBG Ecosystem Challenge Fund to Support Technology and Capacity Building
The CBG Ecosystem Challenge Fund will support broader ecosystem development across the sector.
Its areas of focus include:
- Technology development
- Capacity building
- Feedstock assessment and aggregation
- District-level ecosystem development
- Organic manure value addition
The framework is intended to address challenges beyond individual CBG plants and support the development of supporting infrastructure and capabilities.
GOBARdhan Handbook and Unified Portal Launched
The launch also featured the unveiling of the GOBARdhan Handbook, designed as a reference guide for stakeholders, project developers, State Governments and financial institutions.
A Unified GOBARdhan Portal was also launched as a centralised digital platform to streamline applications and reduce multi-channel processes.
The portal is intended to improve transparency during the processing and implementation of CBG projects.
Government Highlights Role of CBG in Energy Security and Rural Economy
Speaking at the launch, Hardeep Singh Puri said India’s growing energy requirements need to be addressed through availability, affordability and sustainability, with greater use of domestic energy resources.
He highlighted CBG’s potential to convert crop residue, cattle dung and other organic resources into clean domestic energy while producing organic manure and creating economic opportunities in rural areas.
Farmers, cooperatives, gaushalas and local enterprises can participate in activities such as:
- Feedstock collection
- Aggregation
- Transportation
- Processing
This creates a link between agriculture and energy production.
Puri also called on industry, financial institutions, States, cooperatives and technology providers to convert the framework into operating plants and sustained CBG production.
Government Seeks to Address Key CBG Sector Challenges
Dr. Neeraj Mittal, Secretary, Ministry of Petroleum and Natural Gas, highlighted that India currently meets nearly half of its natural gas requirement through imports.
He said CBG provides an opportunity to convert domestic organic waste into a domestic gas resource.
The government identified several challenges that have affected the development of the CBG sector, including:
- Volatile revenues
- Fragmented support mechanisms
- Limited long-term policy visibility
- Feedstock assurance
- Organic manure offtake
- Access to finance
GOBARdhan seeks to address these issues through predictable pricing, greater certainty of gas offtake, capital assistance, consolidated processes and digital monitoring.
States to Play Key Role in CBG Project Development
State Governments are expected to play an important role in translating the national GOBARdhan framework into projects on the ground.
This includes measures such as:
- Developing State CBG policies
- Conducting feedstock assessments
- Creating suitable land banks
- Facilitating faster approvals
- Supporting required infrastructure
The involvement of States is expected to help create local ecosystems around CBG production and feedstock availability.
India’s CBG Sector Has 217+ Commissioned Plants
India’s CBG ecosystem has already developed a base for further expansion. According to government data, 217+ CBG plants had been commissioned as of August 2026, with installed capacity of more than 1,700 TPD.
The GOBARdhan Scheme aims to increase domestic CBG production nearly ten-fold over its 10-year implementation period.
The scheme builds on earlier government initiatives supporting the CBG ecosystem and brings various interventions into a unified national framework.
GOBARdhan Scheme: Expected Economic and Environmental Benefits
The government expects the scheme to generate significant economic, employment and environmental benefits.
The projected outcomes include:
- More than ₹40,000 crore in foreign-exchange savings
- Over ₹75,000 crore added to GDP
- More than 1.5 lakh jobs
- Replacement of 10 million tonnes of fossil fuel with clean gas
- Reduction of more than 40 million tonnes of CO₂ emissions
- Support for production of 250 million tonnes of organic manure
These outcomes are part of the government’s broader objective of expanding domestic clean energy resources and developing a circular bioeconomy.
GOBARdhan to Support Waste-to-Energy and Rural Development
The scheme seeks to convert agricultural residue, cattle dung and other organic waste into CBG and organic manure, creating value from domestic bio-resources.
With its focus on assured offtake, pricing, project assistance, connectivity and financing, GOBARdhan provides an integrated framework for expanding the CBG sector from FY 2026-27 to FY 2035-36.
