Blitz Bureau
NEW DELHI: The Union Cabinet has approved GOBARdhan, a national circular bioenergy scheme with an outlay of ₹23,731 crore. The headline is compressed biogas. The mechanism, and the part that will actually change behaviour, is a guaranteed price held steady for ten years.
Schemes for biogas are not new in India, and most of them have run into the same wall: a plant can be built with a capital grant, but nobody will run it if the price of what it produces moves unpredictably and no one is obliged to buy it. GOBARdhan attacks both ends. It sets an administered price of ₹2,110 per million British thermal units, backed by a pricing framework with a minimum ten-year horizon, and it requires city gas distribution companies to blend compressed biogas into what they already sell — 3 per cent in 2026-27, 4 per cent in 2027-28 and 5 per cent from 2028-29 in the CNG transport and piped domestic segments. A capital grant of up to ₹2 crore per tonne per day of installed capacity remains available for new projects, and a credit guarantee mechanism sits behind smaller MSME promoters who cannot otherwise raise term debt. Read together, the scheme is less a subsidy than a market being written into existence.
Feedstock with a buyer: cattle dung, paddy stubble, press mud and municipal organic waste stop being disposal problems the moment a plant nearby is contractually obliged to accept them at a known price.
Stubble is burned because it has no value and a deadline. Give it a buyer within a truck ride and the deadline stops mattering.
At a Glance
• Scheme: GOBARdhan — national unified scheme for compressed biogas, approved by the Union Cabinet
• Outlay: ₹23,731 crore, running from FY 2026-27 to FY 2035-36
• Price: administered CBG price of ₹2,110 per MMBTU, with a pricing framework of at least ten years
• Blending obligation: 3 per cent in FY27, 4 per cent in FY28, 5 per cent from FY29 in CNG (transport) and PNG (domestic)
• Capital assistance: up to ₹2 crore per tonne per day of installed capacity for eligible greenfield projects
• Credit support: a dedicated credit guarantee mechanism for MSME-based projects
• Stated ambition: raising domestic CBG production nearly ten-fold, with about 1.5 lakh jobs expected
• Feedstock: cattle dung, agricultural residue, press mud, municipal organic waste and other biomass
For a village the change is concrete and arrives through the gate rather than through a bank account. Cattle dung, paddy and wheat residue, press mud from sugar mills and the wet fraction of municipal waste are today things to be disposed of, and disposal in a hurry is why fields burn in the weeks between harvest and the next sowing. A plant within trucking distance that is obliged to run, because its output has a buyer and a price, converts all of that into a purchase order. The second output matters as much as the gas: what remains after digestion is fermented organic manure, which goes back onto the same fields and reduces the quantity of bagged fertiliser a farmer has to buy. A household that sells residue and buys less urea has been paid twice by the same decision.
The work ahead is logistical rather than financial, and it is worth naming plainly so that expectations are set at the right level. Biomass is bulky, seasonal and low in value per tonne, which means the economics of a plant are decided within a radius of a few dozen kilometres; aggregation, baling and storage are the parts of this chain India has built least. The scheme anticipates that with a challenge fund aimed at district-level implementation and feedstock value chains, and with support for the pipelines that connect plants to gas networks — the difference between a plant that sells locally and one that sells into the grid. A ten-year price horizon is the single most useful thing here, because it is long enough for a district co-operative or a small entrepreneur to sign a five-year feedstock contract with farmers and still see the far end of it. Certainty, more than capital, is what this sector has been short of.
