New Delhi: The Ministry of Petroleum and Natural Gas (MoPNG) has issued operational guidelines for all six components of GOBARdhan, the Rs 23,731-crore scheme to develop the compressed biogas (CBG) sector. The guidelines set a fixed price for CBG until at least March 2036 and require city gas distributors to buy it. They also lay down capital subsidies, pipeline funding and credit guarantees for producers.
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GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) was approved on August 6 and covers the period from 2026-27 to 2035-36. It has six components: a CBG offtake assurance mechanism, a CBG pricing framework, capital assistance, development of pipeline infrastructure, credit guarantee support and a CBG Ecosystem Challenge Fund.
Under the pricing framework, CBG producers will receive an Administered CBG Price (ACP) of Rs 2,110 per million British thermal units (MMBTU). The guidelines put this at about Rs 98 per kg of CBG at 95 percent methane content. The price excludes taxes and compression charges. GAIL (India) Ltd, designated as the Synchro Operator, will pay the price to producers.
The guidelines explain why the price is being fixed. CBG production costs, they say, depend mainly on feedstock, power tariffs and plant expenses rather than on global fuel prices. Linking the CBG price to the retail selling price of compressed natural gas (CNG) had therefore made project revenues volatile.
The ACP will stay in place at least until March 31, 2036. A Project Approval Board (PAB), chaired by the MoPNG Secretary, will set the price every 12 months. It may keep the price unchanged or revise it, based on factors such as production economics and the Consumer Price Index. The Petroleum Planning and Analysis Cell (PPAC) will notify the price.
The government will give GAIL affordability support as one source of money for paying the ACP. This support is capped at Rs 10 per kg, or Rs 215.31 per MMBTU, of CBG procured, and the PAB will set the actual rate each year. The framework also provides for a cost-sharing mechanism across the sectors that consume domestic gas.
The ACP includes an incentive for selling by-products such as fermented organic manure (FOM) and liquid fermented organic manure (LFOM). Producers who receive the price must file a quarterly statement certified by a chartered accountant. The statement must cover the quantities they sold, sale prices, the use of by-products, and the feedstock they bought and the prices they paid. A producer that fails to file risks losing the ACP. Plants that only buy raw biogas from others and upgrade it are not eligible for the price.
The offtake guidelines let a producer seek assured offtake of up to 100 percent of the CBG it has for sale. On the buying side, CGD entities must source CBG as a share of the gas they supply to the CNG (transport) and piped natural gas (PNG) (domestic) segments. That share, the Compressed Biogas Obligation, is 3 percent in 2026-27 and 4 percent in 2027-28. From 2028-29, it rises to 5 percent.
A firm offtake is secured through a tripartite agreement between the producer, the CGD entity and GAIL. The CGD entity must sign it within three months of receiving a complete request. Each geographical area must also keep a minimum intake capacity for CBG. This capacity is set at 50 percent of the area's average CNG and PNG consumption in the previous quarter.
If a CGD entity does not sign within the deadline, the matter goes to the PAB. On the board's recommendation, MoPNG may reduce the entity's allocation of APM (administered price mechanism) or non-APM gas by the amount of CBG the producer asked it to buy. The guidelines also say that buying CBG will not reduce a CGD entity's overall entitlement to APM gas or new well gas. If CBG replaces APM gas in one area, the entity can use that APM gas in its other areas.
Neither side carries a penalty obligation in the first year of an agreement. From the second year, the CGD entity must take at least 90 percent of the nominated quantity, and the producer must supply at least 50 percent of the contracted quantity.
New plants will get capital assistance of Rs 1.25 crore per tonne per day (TPD) of capacity. Brownfield projects will get half that rate, and only for the capacity they add. An operator that upgrades its own existing biogas plant to produce CBG will get Rs 0.60 crore per TPD, up to Rs 5 crore. Projects in special category areas get 20 percent more support. These areas are the North-Eastern states and Sikkim, Uttarakhand and Himachal Pradesh, and the union territories of Jammu and Kashmir, Ladakh, Lakshadweep and the Andaman and Nicobar Islands.
Producers can also claim back half the cost of feedstock aggregation and organic manure machinery, up to Rs 0.75 crore per TPD. Total assistance across both types of support is capped at Rs 30 crore per project. A company and its majority-owned subsidiaries can receive no more than Rs 500 crore in a financial year.
The assistance for building a plant is paid in three instalments. A quarter is paid on consent to establish, against a bank guarantee. Another quarter is paid on the first sale of CBG. The remaining half depends on performance: the plant must run for three months and then complete a 24-hour test. A plant load factor of 75 percent or more earns the full final instalment, and anything between 50 and 75 percent earns a proportionate share. Below 50 percent, nothing is paid and the producer's bank guarantees are cashed in.
Plants that run on 50 percent or more municipal solid waste or sewage are not eligible. The guidelines say such projects may be supported under schemes of the Ministry of Housing and Urban Affairs. Applications close on December 31, 2030. When applications exceed the remaining budget, priority goes to projects that already have a firm CBG sale contract.
GOBARdhan subsumes five existing schemes from September 1. Three are run by MoPNG: the SATAT (Sustainable Alternative Towards Affordable Transportation) initiative, the Biomass Aggregation Machinery scheme and the Development of Pipeline Infrastructure scheme. The other two are the Department of Fertilizers' Market Development Assistance scheme and the Ministry of New and Renewable Energy's central financial assistance for CBG plants under the Waste to Energy Programme.
Any liabilities already committed under these schemes stay with the ministry or department that ran them. Retail outlets set up under SATAT will be encouraged to join the GOBARdhan framework.
The pipeline component funds two kinds of connection. For plants linking to a CGD network, it pays 50 percent of the cost. The ceiling is Rs 50 lakh per km for steel pipelines and Rs 7.5 lakh per km for medium-density polyethylene (MDPE) pipelines, and support covers up to 75 km. To qualify, a plant must have at least 2 TPD of capacity and a firm offtake agreement. For links to trunk pipelines, GAIL will act as Cluster Operator. It will build, own and run shared infrastructure for clusters of at least two plants, preferably with a combined 20 TPD or more, and must complete each cluster within two years of sanction.
A credit guarantee fund, managed by the National Credit Guarantee Trustee Company (NCGTC), will cover term loans to new micro, small and medium enterprise (MSME) CBG projects. It will cover 85 percent of the loan, up to Rs 20 crore, or up to Rs 25 crore for women-led MSMEs. Loans can run for up to 15 years, including an 18-month moratorium. Lenders cannot ask for collateral on the guaranteed portion of a loan. The component has an outlay of Rs 625 crore. It will run until December 31, 2030, or until loans reach Rs 15,000 crore, whichever comes first.
The CBG Ecosystem Challenge Fund has Rs 500 crore for 2026-27 to 2030-31. Part of it pays for an annual contest among district administrations. The top three districts each year will get Rs 5 crore each, and the next seven will get Rs 2 crore each.
Districts will be scored on five measures, each carrying 20 percent. They are single-window clearance, the time taken to approve applications, feedstock mapping, the use of organic manure from CBG plants, and awareness drives. The awareness drives include campaigns against parali (stubble) burning.
The rest of the fund will give grants of up to 50 percent of project cost. The grants will support domestic CBG equipment, better plant yields and the processing of by-products. CBG developers, research institutions, start-ups and central public sector enterprises can apply.
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All producers seeking benefits must install real-time monitoring systems (SCADA), an online gas chromatograph or mass spectrometer, and an automatic shut-off that stops gas flow if quality slips. If a SCADA fault is not fixed within seven days, GAIL can stop paying the ACP until it is repaired. The Centre for High Technology will act as the project management agency for the scheme.