New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Thursday approved GOBARdhan, the National Circular Bioenergy Scheme, with a total outlay of Rs 23,731 crore, in a move the government said would raise domestic compressed biogas (CBG) production nearly ten-fold over the next decade.
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The scheme will run from FY2026-27 to FY2035-36 and be administered by the Ministry of Petroleum and Natural Gas, according to a government statement. Information and Broadcasting Minister Ashwini Vaishnaw announced the decision at a post-cabinet briefing, alongside a separate approval for a four-lane highway in Assam; the two projects together, Vaishnaw said, carry a combined outlay of about Rs 32,000 crore.
Vaishnaw linked the scheme to energy security. "We all know that India has to import approximately 50 percent of the natural gas it consumes," he said, adding that "if there is a serious geopolitical conflict, the import of LNG can sometimes be disrupted. So, the objective is to reduce this dependence."
"The scheme approved today is a comprehensive one comprising six pillars," Vaishnaw said. The statement listed the components as assured CBG offtake, a stable pricing framework, capital assistance, pipeline infrastructure, credit guarantee support, and a CBG Ecosystem Challenge Fund.
Under the offtake component, city gas distribution (CGD) entities will procure CBG to meet a blending obligation of 3 percent in FY2026-27, 4 percent in FY2027-28 and 5 percent from FY2028-29 onwards in the CNG (transport) and PNG (domestic) segments, the statement said. It described the obligation as converting into "a clear, long-term demand signal for the industry."
The scheme sets an administered CBG price of Rs 2,110 per MMBTU, which Vaishnaw put at about Rs 15 per kg of CBG. Eligible greenfield projects will receive capital assistance of up to Rs 2 crore per tonne per day (TPD) of installed capacity, with brownfield expansions also eligible, the statement said. A credit guarantee mechanism will cover lending to MSME-based projects. Vaishnaw said about 85 percent of loans extended to MSMEs under the programme would be guaranteed.
CBG is "chemically equivalent to natural gas and can be seamlessly integrated into the existing gas ecosystem," the statement said.
The scheme targets CBG output of about 5 million metric standard cubic metres per day (MMSCMD), Vaishnaw said, describing it as a 10- to-12-fold increase on current levels, which he put at about 0.4 MMSCMD.
Vaishnaw said the scheme would save about 40 million tonnes of carbon dioxide emissions, add about Rs 75,000 crore to GDP and create about 1.5 lakh direct and indirect jobs. It would remove the need to import 10 million metric tonnes of fossil fuels and yield about 250 million metric tonnes of organic manure, he said.
The statement said prior initiatives, including the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme, the Market Development Assistance scheme, the Biomass Aggregation Machinery scheme and Central Financial Assistance under the National Bioenergy Programme, had enabled the commissioning of over 200 CBG plants. GOBARdhan, first launched in 2018, brings the CBG value chain under a single national framework.
Responding to questions on feedstock, Vaishnaw said the scheme was not restricted to cattle dung. "Its foundation is not limited to cow dung alone," he said, citing agricultural residue, press mud and municipal organic waste as inputs.
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He said the CBG ecosystem had earlier been split across ministries. "The entire ecosystem for compressed biogas was previously distributed across four different ministries," he said, calling its consolidation under the Ministry of Petroleum and Natural Gas "a necessary reform." He said the scheme would be rolled out without delay: "The scheme is being launched immediately, and there is no room for delay."
