Government Subsidy for Compressed Biogas – CBG Plant in Madhya Pradesh: A Complete Guide for Investors
Government Subsidy for CBG Plant in Madhya Pradesh: A Complete Guide for Investors
India is on a transformative journey toward clean energy, and Compressed Biogas (CBG) is emerging as a powerful contributor to this green shift. With its vast agricultural base, Madhya Pradesh holds immense potential for setting up CBG plants, and the state government has rolled out robust subsidy schemes and incentives to attract private investments.
In this blog, we present a complete list of government subsidies and incentives available for CBG projects in Madhya Pradesh, based on the latest Bio-Fuel Policy, Industrial Promotion Policy 2025 (IPP 2025), and MSME Development Policy 2025.
🔋 What is a CBG Plant?
Compressed Biogas (CBG) is purified biogas with energy content similar to CNG, derived from agricultural residue, pressmud, cow dung, organic waste, and MSW. It’s used for:
Green transport fuel
Industrial gas usage
Bio-manure by-products
📌 Key Government Schemes Applicable
1. Madhya Pradesh Biofuel Project Scheme
CBG projects with investment of ₹10 crore or more are eligible for the following major incentives:
✅ Basic Investment Promotion Assistance (BIPA)
Up to ₹200 Cr subsidy, disbursed in 7 equal annual instalments
✅ Infrastructure Subsidy
50% assistance, up to ₹5 Cr for building internal infrastructure (power, water, road, etc.)
✅ Green Industrialization Subsidy
Up to ₹5 Cr for waste management systems
Up to ₹10 Cr for Zero Liquid Discharge (ZLD) ETPs
✅ Stamp Duty Reimbursement
50% reimbursement on land purchase stamp duty
✅ Electricity & Energy Waivers
100% exemption for 10 years on:
Electricity Duty
Energy Development Cess
Cross Subsidy Surcharge
✅ Patent & Certification Support
100% reimbursement for patent, copyright, GI registration (max ₹10 lakh/unit)
50% reimbursement for quality certification (max ₹1 lakh)
✅ Land at Discounted Rate
Government land at 50% circle rate for plant & machinery
Annual lease at 10% of collector rate
✅ Machinery Subsidy for Feedstock Collection
50% subsidy from GoI + 30% from GoMP (max ₹20 lakh) on Rakers, Balers, and Trawlers
2. Industrial Promotion Policy 2025 (IPP 2025)
Incentives are enhanced with “Multiples” for job creation, export, FDI, and location:
| Incentive Type | Details |
|---|---|
| BIPA Rate | 10% to 40% of Fixed Capital Investment (as per formula) |
| Employment Multiple | Up to 1.5× for hiring over 2,500 people |
| Export Multiple | Up to 1.3× for units exporting more than 75% |
| Geographical Multiple | 1.3× for units in Priority Blocks |
| FDI Multiple | 1.2× for >50% foreign equity |
| Power Tariff Rebate | As per DISCOM tariff incentives |
| Customized Package (CCIP) | Available for projects with >₹500 Cr investment |
3. MSME Policy 2025 (for medium-scale units ≤ ₹50 Cr in Plant & Machinery)
If your CBG plant qualifies under the MSME category, you get additional benefits:
40% subsidy on plant & machinery + building (disbursed over 4–7 years)
Quality Certification Reimbursement: Up to ₹20 lakh
Patent/IPR Reimbursement: Up to ₹10 lakh per patent
Green Industrialization Assistance: Up to ₹2.5 Cr
Energy Audit + Equipment Subsidy: Up to ₹5 lakh
Infrastructure Support: Up to ₹3 Cr
Freight Assistance: 50% of cost for exports, max ₹40 lakh/year for 5 years
🤝 Feedstock & Operational Support
The MP Government ensures continuous feedstock availability through:
Exclusive Registration: Only 1 biofuel plant per block to avoid feedstock conflict
Long-Term Biomass Contracts: With aggregators, FPOs, APMCs, and Gaushalas
State-Supported IT Portal: To manage aggregator-farmer-project coordination
Bio-Manure Promotion: Recognized under FCO 1985, mandatorily marketed via fertilizer shops
🏁 Conclusion
With capital subsidies, infra development assistance, tax exemptions, and feedstock facilitation, Madhya Pradesh is one of the most investor-friendly states for setting up Compressed Biogas (CBG) plants.
If you’re planning to start or invest in a CBG project in Madhya Pradesh, now is the time to act.
📞 Need Help with Project Finance & Subsidy?
Adroit Corporation, based in Rajkot, Gujarat, provides end-to-end consultancy for:
DPR preparation
Project finance
Subsidy applications
CBG plant setup support
📩 Email: info@adroitcorporation.in
📞 Call: +91-7203010101
