Cabinet Approves Rs 23,731 Crore GOBARdhan Scheme To Boost CBG Production

New Delhi, Aug 7 (KNN) The Union Cabinet has approved the GOBARdhan (National Circular Bioenergy Scheme) with a total outlay of Rs 23,731 crore to accelerate compressed biogas (CBG) production and strengthen India's renewable energy ecosystem.

Rs 23,731 Crore Scheme To Boost Domestic CBG Production

Chaired by Prime Minister Narendra Modi, the scheme will be implemented from FY 2026-27 to FY 2035-36 and aims to increase domestic CBG production nearly tenfold through assured demand, stable pricing, capital assistance, pipeline infrastructure, credit support and technology development.

Administered by the Ministry of Petroleum and Natural Gas, the scheme seeks to create an integrated platform across the entire CBG value chain to improve project viability and provide greater certainty for investors, lenders and developers, reported Economic Times.

The government said CBG, which is chemically equivalent to natural gas, will play an increasing role in meeting India's growing energy demand across transport, households, industrial and commercial sectors while reducing dependence on imported fossil fuels.

CBG Blending Targets And Assured Pricing Framework

Under the scheme, City Gas Distribution (CGD) entities will procure CBG to meet the notified CBG blending obligation of 3 percent in FY 2026-27, 4 percent in FY 2027-28 and 5 percent from FY 2028-29 onwards in the CNG (Transport) and PNG (Domestic) segments.

The scheme also introduces an administered CBG price of Rs 2,110 per MMBTU, supported by a government-backed pricing framework to provide long-term revenue certainty while maintaining consumer affordability.

Capital Support, Pipeline Connectivity To Improve Project Viability

Eligible greenfield CBG projects will receive capital assistance of up to Rs 2 crore per tonne per day (TPD) of installed production capacity. The support will also cover feedstock aggregation, organic manure processing and value-addition infrastructure, while brownfield projects expanding capacity will also be eligible.

In addition, the scheme supports cluster-based and standalone pipeline infrastructure to connect CBG plants with trunk pipelines and City Gas Distribution networks, reducing evacuation costs and expanding market access.

Industry Welcomes Focus On Assured Offtake And Farmer Benefits

Welcoming the decision, Indian Biogas Association President A.R. Shukla said the sector had long sought remunerative pricing, assured offtake and capital support, all of which are addressed under the new scheme.

He said the initiative would not only boost biogas production but also create additional income opportunities for dairy farmers, reduce crop residue burning, improve soil health through organic manure and lower India's dependence on imported liquefied natural gas (LNG).

(KNN Bureau)