Government Launches India’s Biggest Ever Scheme for the CBG Sector

In a historic decision that is set to transform India’s renewable energy landscape, the Union Cabinet chaired by Hon’ble Prime Minister Shri Narendra Modi has approved the GOBARdhan – National Circular Bioenergy Scheme with a total financial outlay of ₹23,731 Crore.

The scheme will be implemented from FY 2026-27 to FY 2035-36 and is expected to increase India’s domestic Compressed Biogas (CBG) production by nearly 10 times, making CBG one of the major pillars of India’s clean energy future.

For entrepreneurs, investors, farmers, industries, financial institutions, and CBG developers, this is undoubtedly one of the biggest opportunities ever announced by the Government of India.

What is the GOBARdhan Scheme?

GOBARdhan (National Circular Bioenergy Scheme) is India’s first integrated national framework for the entire Compressed Biogas value chain.

Unlike previous schemes that supported only specific parts of the industry, GOBARdhan brings together:

• Assured Gas Offtake
• Fixed Pricing
• Capital Subsidy
• Pipeline Connectivity
• Credit Support
• Ecosystem Development

under one unified national policy.

The scheme will be implemented by the Ministry of Petroleum and Natural Gas (MoPNG).

Scheme Highlights at a Glance

Why is this Scheme a Game Changer?

India produces enormous quantities of:

• Agricultural residue
• Cattle dung
• Sugar press mud
• Municipal organic waste
• Food waste
• Industrial organic waste

Most of these resources are either burned or disposed of improperly.

The new GOBARdhan Scheme aims to convert these wastes into:

• Clean Compressed Biogas
• Organic Fertilizer
• Farmer Income
• Rural Employment
• Green Energy

This creates a true Circular Economy Model.

Six Major Components of GOBARdhan Scheme

1. Assured CBG Offtake

One of the biggest concerns of CBG investors has always been:

“Who will buy my gas?”

The Government has addressed this through a dedicated CBG Offtake Assurance Framework.

City Gas Distribution (CGD) companies will procure CBG to meet mandatory blending obligations.

Mandatory CBG Blending Targets

This ensures long-term market demand for CBG producers.

2. Stable Administered Pricing

One of the most significant announcements under the GOBARdhan Scheme is the introduction of a Government-backed administered pricing mechanism for Compressed Biogas (CBG), providing long-term revenue certainty to project developers.

Approved CBG Price

• ₹2,110 per MMBTU
• Approximately ₹100 per kg of CBG (equivalent value, subject to the applicable energy conversion methodology and gas quality specifications).

The administered pricing framework is designed to provide a minimum 10-year revenue visibility, ensuring predictable cash flows, improving project bankability, and enhancing investor confidence. This long-term pricing support is expected to facilitate easier financial closure, encourage fresh investments, and accelerate the development of CBG projects across India.

Note: The ₹100/kg figure is an approximate energy-equivalent value derived from the notified price of ₹2,110 per MMBTU. The actual realization per kilogram may vary slightly depending on the gas calorific value and the conversion methodology prescribed by the Government or the off-taking entity.

3. Capital Assistance (CBG Subsidy)

Perhaps the most awaited announcement is the Capital Assistance for Greenfield CBG Projects.

Subsidy Available

Up to ₹2 Crore per TPD of Installed CBG Capacity

Assistance Covers

• Main CBG Plant
• Feedstock Collection Infrastructure
• Organic Manure Processing
• Value Addition Facilities

Even Brownfield Expansion Projects are eligible.

This significantly reduces the capital investment required for setting up a CBG plant.

4. Pipeline Infrastructure Support

Transporting CBG has always been a major challenge.

The Government will now support:

• Cluster Pipeline Infrastructure
• Standalone Pipeline Connections
• Connectivity to Gas Grid
• Connectivity to City Gas Distribution Networks

This will reduce logistics costs and improve market accessibility.

5. Credit Guarantee Support

Financing CBG projects has traditionally been difficult.

The new scheme introduces a dedicated Credit Guarantee Mechanism.

Benefits include:

• Easier Bank Loans
• Lower Collateral Requirement
• Better Institutional Financing
• Improved Bank Confidence

Special focus has been given to:

• MSMEs
• Women Entrepreneurs
• First-Time Developers

6. CBG Ecosystem Challenge Fund

A completely new initiative under GOBARdhan.

The fund will support:

• Feedstock Mapping
• District Planning
• Technology Development
• Capacity Building
• Organic Fertilizer Value Addition
• Stakeholder Awareness
• Local Supply Chain Development

This strengthens the entire ecosystem rather than only funding plants.

Feedstocks Covered Under the Scheme

The scheme encourages production of CBG from multiple biomass sources including:

• Agricultural Residue
• Napier Grass
• Maize Silage
• Cattle Dung
• Press Mud
• Poultry Waste
• Food Waste
• Municipal Organic Waste
• Industrial Organic Waste
• Other Biomass Resources

This allows developers to choose feedstocks based on regional availability.

Expected Impact of GOBARdhan Scheme

The Government expects the scheme to deliver:

Nearly 10 Times Increase in CBG Production

India’s CBG sector is expected to witness unprecedented growth over the next decade.

Increased Energy Security

Higher domestic renewable gas production will reduce dependence on imported fossil fuels.

Large Scale Private Investment

Stable pricing and assured offtake are expected to attract significant private investment into the sector.

Better Income for Farmers

Farmers can earn additional income by supplying:

• Crop Residue
• Dung
• Biomass
• Organic Waste

Employment Generation

Thousands of new jobs are expected in:

• Feedstock Collection
• Transportation
• Plant Operations
• Organic Fertilizer Marketing

Improved Waste Management

The scheme promotes scientific utilization of agricultural and municipal organic waste, reducing environmental pollution.

Why This Scheme Matters for Investors

For many years, investors were hesitant to enter the CBG sector due to concerns over:

• Gas pricing uncertainty
• Market demand
• Bank financing
• Feedstock management
• Pipeline connectivity

The GOBARdhan Scheme directly addresses these challenges by providing:

• Assured Demand
• Stable Pricing
• Capital Subsidy
• Credit Support
• Infrastructure Development
• Ecosystem Strengthening

This creates a far more predictable investment environment.

Who Should Consider Investing?

The scheme opens opportunities for:

• Entrepreneurs
• Existing Industrial Groups
• Sugar Mills
• Dairy Cooperatives
• Farmer Producer Organizations (FPOs)
• MSMEs
• EPC Companies
• Waste Management Companies
• Municipal Bodies
• Renewable Energy Developers

How Adroit Corporation Can Help

Setting up a successful CBG project requires much more than identifying a subsidy. It involves project planning, financial structuring, approvals, and execution.

Adroit Corporation provides end-to-end consultancy for CBG projects, including:

• Project Feasibility Study
• Detailed Project Report (DPR)
• Techno-Economic Viability Analysis
• Bank Loan Assistance
• Financial Modeling & CMA
• Government Subsidy Planning
• Subsidy Documentation & Application
• Project Finance Coordination
• Liaison with Banks and Government Departments
• End-to-End Project Advisory

Final Thoughts

The approval of the ₹23,731 Crore GOBARdhan – National Circular Bioenergy Scheme marks one of the most significant policy initiatives for India’s renewable energy sector.

By integrating assured offtake, administered pricing, capital assistance, pipeline connectivity, credit guarantee, and ecosystem development into one unified framework, the Government has created a strong foundation for scaling up India’s CBG industry.

For investors, farmers, entrepreneurs, and industries looking to enter the bioenergy sector, this scheme presents a long-term opportunity to participate in India’s transition toward a cleaner, circular, and self-reliant energy economy.

With implementation planned through 2035-36, GOBARdhan has the potential to reshape India’s waste management, strengthen rural livelihoods, enhance energy security, and accelerate the country’s journey toward Viksit Bharat.

Frequently Asked Questions (FAQs)

Q1. What is the GOBARdhan Scheme 2026?
It is a ₹23,731 crore national scheme approved by the Union Cabinet to accelerate Compressed Biogas (CBG) production through assured offtake, stable pricing, capital assistance, pipeline connectivity, credit support, and ecosystem development.

Q2. What is the subsidy available under the GOBARdhan Scheme?
Eligible greenfield CBG projects can receive capital assistance of up to ₹2 crore per TPD (Ton Per Day) of installed CBG capacity, subject to the scheme guidelines.

Q3. What is the approved CBG price under the scheme?
The Government has introduced an administered CBG price of ₹2,110 per MMBTU, supported by a government-backed pricing framework.

Q4. Who can apply for the scheme?
Eligible applicants may include private developers, MSMEs, cooperatives, rural entrepreneurs, and eligible brownfield expansion projects, as per the detailed implementation guidelines.

Q5. When will the scheme be implemented?
The scheme will be implemented from FY 2026-27 to FY 2035-36.

Q6. Which feedstocks are eligible for CBG production?
The scheme supports CBG production from agricultural residue, cattle dung, press mud, municipal organic waste, food waste, industrial

organic waste, and other eligible biomass resources.

Q7. Can existing CBG plants also get benefits?
Yes. The Cabinet announcement states that eligible brownfield projects expanding their production capacity will also be covered under the capital assistance component, subject to scheme conditions.

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