Compressed Biogas (CBG) is a purified form of biogas, consisting primarily of methane (>90 [percent), and serves as a substitute for compressed natural gas (CNG). Its production relies on feedstock such as agricultural residue, municipal solid waste (MSW), cattle dung, sugar industry by-products like press mud, and sludge from sewage treatment plants.
India has witnessed a significant year-on-year growth in the number of CBG plants over the past five years, with the total operational units increasing from 19 in 2020 to over 125 by December 2024. The country has set an ambitious target of establishing 5,000 commercial CBG plants by 2024-25, aiming to produce 15 MMT (million metric tonnes) of CBG, which would serve as a replacement for other gaseous fuels currently in use.
India has an estimated CBG potential of approximately 62 MMT, along with a bio-manure generation capacity of 370 MMT. As an agrarian economy with a large population, the country produces over 350 million tonnes of agricultural waste annually, along with around 62 million metric tonnes of municipal solid waste (MSW) and other types of waste, such as sugarcane press mud, distillery spent wash, cattle dung, and sewage treatment plant waste. These resources can serve as valuable feedstock for CBG plants.
The growth of CBG in India is driven by factors such as government support, increasing energy demand, a focus on waste-to-energy solutions, growing emphasis on sustainability, and the rise in waste generation. To promote CBG, the government is offering financial assistance through various schemes to develop CBG infrastructure across the country. Under the bioenergy program, the government has allocated a cumulative budget of Rs 1,715 crore to provide financial support for establishing both large-scale CBG plants and small biogas and biomass facilities. Additionally, various government departments are offering financial aid for the development of pipeline infrastructure to inject CBG into city gas distribution networks, as well as support for purchasing biomass aggregation machinery and setting up CBG plants.
Other government initiatives include the offtake of CBG by Oil Marketing Companies (OMCs) at a fixed price under the SATAT scheme, excise duty exemptions for CBG blended with Compressed Natural Gas (CNG), and the phased implementation of mandatory CBG blending with Compressed Natural Gas (CNG) (for transportation) and Piped Natural Gas (PNG) (for domestic use).
Other factors driving the growth of CBG, include rising energy consumption, the emphasis on replacing imported natural gas and CNG with CBG, a growing focus on renewable energy, and the push for decarbonisation.
Despite the government's efforts, India is significantly behind its target of setting up 5,000 CBG plants by 2024-25. Some of the key challenges hindering the growth of CBG in the country include high initial investments, inconsistent feedstock availability, lack of awareness, reliance on imported technology for biogas purification, and delays in approvals, subsidies, and financing.
To accelerate the growth of CBG plants in the country, it is essential to boost private sector involvement through public-private partnerships (PPPs), streamline the approval and clearance processes, facilitate easier financing, promote domestic manufacturing of biogas upgrading and purification equipment, enable CBG blending in existing natural gas pipelines to optimize infrastructure use, and raise awareness.
There is considerable potential for CBG in the country, and with the right actions from both the government and private sector, this sector's growth can be significantly accelerated in the coming years.
