Subsidy for CBG Plant in India: Financial Assistance for Biomass Aggregation Machinery (BAM)
India’s push towards green energy and environmental sustainability has opened exciting opportunities for entrepreneurs looking to establish Compressed Bio Gas (CBG) plants and offers subsidy for CBG Plant in India. One of the major hurdles in CBG production is the collection and management of biomass. To address this, the Ministry of Petroleum and Natural Gas (MoPNG) has launched a Financial Assistance Scheme for Procurement of Biomass Aggregation Machinery (BAM) for CBG producers.
This blog explores the scheme in detail, including the eligibility, subsidy amount, application process, and frequently asked questions (FAQs).
What is the Objective of the Scheme?
The key objective of this scheme is:
To prevent stubble burning and pollution by enabling proper biomass collection.
To support 100 CBG plants in their early stages through financial aid for BAM procurement.
To generate income for farmers by creating a biomass market.
To encourage eco-friendly fuel production like Compressed Bio Gas and bio-manure.
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Financial Assistance (Subsidy) Available for CBG Projects
The scheme offers generous financial incentives to CBG producers for purchasing biomass collection equipment:
| Particulars | Subsidy Details |
|---|---|
| Type of Support | Capital Subsidy (Grant) |
| Eligibility | Existing or upcoming CBG projects using at least 50% agri-residue as feedstock |
| Minimum Plant Capacity | 2 TPD (Tonnes Per Day) |
| Maximum Subsidy per Set | 50% of cost or ₹90 Lakhs per BAM set (whichever is lower)4 |
| Total Subsidy Cap per Project | ₹9 Crores (based on pro-rata for capacity up to 4 TPD) |
| Disbursement Mode | Self-financed or bank-loan backed with phased payments allowed. |
✅ Example to Understand the CBG Plant Subsidy (Pro Rata Basis)
Let’s say you are planning to set up a CBG plant with a capacity of 10 TPD.
According to the scheme:
For a 4 TPD project, you are eligible for ₹1.80 Crore subsidy.
This is calculated on a pro-rata basis (which means the subsidy increases proportionately with the plant size).
🧮 How to Calculate Subsidy for Your 10 TPD Project
Step 1: Determine subsidy per 1 TPD
₹1.80 Crore ÷ 4 TPD = ₹0.45 Crore per TPD
Step 2: Multiply by your project size
10 TPD × ₹0.45 Crore = ₹4.50 Crore subsidy
✅ So, for your 10 TPD CBG plant, you can get ₹4.50 Crore as subsidy.
❗ Maximum Cap Reminder:
Even if your plant is very large (say 25 TPD or 30 TPD), the maximum subsidy you can get is ₹9 Crore per project, no matter how high the capacity is.
So, if you calculate and the subsidy comes out to be ₹12 Crore for a 30 TPD plant, you will still get only ₹9 Crore as per the scheme limit.
✅ “50% of cost of BAM or ₹90 Lakhs per set (whichever is lower)”
The Government will provide subsidy for each set of Biomass Aggregation Machinery (BAM).
A “Set” usually includes:
Machinery Name Purpose Baler (Large/ 3 Small) For compressing loose biomass into compact bales Rake To collect scattered crop residues into rows Loader/Grabber For lifting biomass and loading into trailers Tractor Used for pulling various BAM implements Trailer/Trolley Transport of baled biomass from field to storage site Shredder/Chopper Cutting biomass into smaller pieces for handling Biomass Collector Mechanized tools for efficient gathering of residue Bund Former Forms bunds/rows from residue for collection Hydraulic Baler Machine Compresses biomass using hydraulic pressure Bale Wrapper Protects biomass from moisture and spoilage Field Rake Loader Combined tool for raking and lifting residues — depending on the standard list of approved equipment.
➡️ Subsidy per set = 50% of total cost, but maximum ₹90 Lakhs per set (if 50% exceeds ₹90 Lakhs, then ₹90 Lakhs is the cap).
✅ Pro Rata Limit – Explained with Example:
Let’s say:
You are setting up a CBG plant of 10 TPD capacity.
As per scheme:
₹1.80 Crore is allowed for 4 TPD = ₹0.45 Crore per TPD
So, for 10 TPD: 10 × ₹0.45 Crore = ₹4.50 Crore subsidy
✅ Now let’s understand “Per Set Limit” in this example:
Let’s assume:
Your DPR mentions you need 5 sets of BAM for collecting required biomass.
Each set costs ₹1.80 Crore.
Now:
🧮 Subsidy per set = 50% of ₹1.80 Cr = ₹0.90 Cr → ✅ Allowed (since it’s not exceeding the ₹90 lakh cap)
✔ So, for 5 sets: 5 × ₹90 Lakhs = ₹4.50 Crore subsidy
➡️ ✅ You will get full eligible subsidy as per both:
Per TPD pro-rata subsidy (10 TPD = ₹4.50 Crore)
Per Set cap (₹90 Lakhs × 5 sets = ₹4.50 Crore)
❌ If your machinery cost is very high
Suppose 1 BAM set costs ₹2.50 Cr
50% = ₹1.25 Cr
But max allowed = ₹90 Lakhs
⛔ You will get only ₹90 Lakhs per set, even if 50% is more.
🧾 Final Summary for Easy Understanding
| Parameter | Value |
|---|---|
| Plant Capacity | 10 TPD |
| BAM Sets Needed | 5 Sets |
| Cost per Set | ₹1.80 Cr |
| Subsidy per Set (50%) | ₹0.90 Cr |
| Subsidy Received | 5 × ₹0.90 Cr = ₹4.50 Cr |
| Maximum Subsidy Allowed | ₹9.00 Cr per project |
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Eligibility Criteria for Subsidy
To qualify for the financial assistance:
Project must use minimum 50% agri-residue/biomass.
Project capacity must be minimum 2 TPD.
Must be registered on GOBARdhan portal.
Project must not have availed any subsidy for the same equipment from other government schemes.
Only under-construction projects with 50% physical progress are considered.
Application must be submitted before BAM purchase through a designated portal.
Application Process & Timelines
- Apply through portal quarterly (e.g., 1st to 30th April for Q1).
- Submit DPR and equipment list before BAM procurement.
- PMA (Project Management Agency) evaluates, followed by approvals from PAC and PAB.
- Upon approval, CBG producer procures BAM and uploads bills and photos on the portal.
- Physical verification is conducted.
- Subsidy is released to the bank (if loan taken) or beneficiary directly (if self-funded).
- Maximum period allowed for phased purchase is 2 years from approval date.
Beneficiary Responsibilities
Approved beneficiaries must:
Sign a 5-year bond to use BAM solely for CBG biomass collection.
Insure equipment above ₹5 Lakhs.
Upload annual reports on biomass collected.
Maintain equipment in good condition and ensure optimal use.
Not sell/transfer the equipment for 5 years.
Selection Criteria for Beneficiaries
When selecting applicants, preference will be given based on:
- Date of CBG plant commissioning.
- Approvals and consents from PESO and CPCB.
- Date of GOBARdhan portal registration.
- Date of application submission.
Monitoring and Evaluation
The Ministry and PMA will conduct regular field visits, audits, and desk reviews.
Web-based tracking system will be used to ensure transparency.
A third-party evaluation will be carried out at mid and end of scheme period9. Scheme Monitoring.
FAQs: CBG Plant Subsidy Scheme
Q1. What is the total budget allocated for this scheme?
A: ₹564.75 Crore for the period FY 2023–24 to FY 2026–27.
Q2. Who can apply for this scheme?
A: Any existing or under-construction CBG plant with a minimum capacity of 2 TPD using at least 50% agri-residue and registered on the GOBARdhan portal.
Q3. Can I avail this subsidy along with other government schemes?
A: No, the machinery purchased under this scheme must not be financed under any other Central/State government scheme.
Q4. What is the maximum subsidy limit per CBG plant?
A: ₹9 Crore per project based on capacity, with ₹1.8 Crore considered sufficient for a 4 TPD project.
Q5. Is phased equipment purchase allowed?
A: Yes, you may procure machinery in phases within two years of approval.
Q6. What is BAM?
A: BAM stands for Biomass Aggregation Machinery, used for collecting, baling, and transporting agricultural residue for use in CBG production.
Q7. What happens if a beneficiary fails to comply with scheme rules?
A: Penalties include recovery of bond amount, cancellation of benefits, or transfer of machinery to another eligible beneficiary.
Conclusion
This subsidy scheme offers a robust financial and procedural support structure for CBG entrepreneurs. It reduces the initial burden of biomass procurement and ensures structured implementation through oversight and evaluation. Entrepreneurs interested in sustainable fuel production should take advantage of this unique opportunity.
If you need help in preparing a Detailed Project Report (DPR) or applying for the subsidy, feel free to contact our experts at Adroit Corporation.
