In a significant push towards India’s clean energy transition and circular bioeconomy, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) National Circular Bioenergy Scheme with a total outlay of ₹23,731 crore. The integrated scheme aims to transform agricultural residue, cattle dung, municipal organic waste, press mud and other biomass resources into Compressed Biogas (CBG), organic manure and rural economic opportunities, while positioning CBG as a key pillar of India’s future energy mix.
The scheme will be implemented between FY 2026-27 and FY 2035-36 under the Ministry of Petroleum and Natural Gas, providing a unified national framework to accelerate domestic CBG production through assured offtake, stable pricing, capital assistance, pipeline connectivity, access to finance and technology development.
Building on initiatives such as SATAT, the Market Development Assistance (MDA) Scheme, the Biomass Aggregation Machinery (BAM) Scheme, the Development of Pipeline Infrastructure (DPI) Scheme, and financial assistance under the National Bioenergy Programme, the government has already facilitated the commissioning of over 200 CBG plants across the country. GOBARdhan now seeks to consolidate these initiatives under a single implementation platform to improve project viability, investor confidence and large-scale deployment.
One of the scheme’s primary objectives is to increase India’s domestic Compressed Biogas production nearly ten-fold, reducing dependence on imported fossil fuels while supporting the country’s growing natural gas demand across transportation, domestic, commercial and industrial sectors. Since CBG is chemically equivalent to natural gas, it can be seamlessly integrated into India’s expanding gas distribution infrastructure.
The scheme rests on six strategic growth pillars. These include an Assured CBG Offtake Framework to create predictable long-term demand through the notified CBG Blending Obligation, a Stable Pricing Framework with an administered price of ₹2,110 per MMBTU, Capital Assistance of up to ₹2 crore per tonne per day (TPD) for eligible greenfield projects, support for pipeline connectivity, a Credit Guarantee Mechanism to improve financing for MSMEs, and a dedicated CBG Ecosystem Challenge Fund to strengthen district-level planning, feedstock aggregation, technology adoption and capacity building.
The approved framework also operationalises the government’s notified CBG blending trajectory, mandating 3% blending in FY2026-27, 4% in FY2027-28, and 5% from FY2028-29 onwards across the CNG (Transport) and PNG (Domestic) segments. The long-term pricing mechanism and assured procurement are expected to significantly improve project bankability and attract greater private investment into the sector.
Beyond strengthening India’s energy security, the government expects GOBARdhan to generate widespread socio-economic benefits, including higher farmer incomes, new opportunities for rural entrepreneurs and cooperatives, improved scientific waste management, lower greenhouse gas emissions and expansion of the organic manure economy. By integrating policy support across the entire CBG value chain, the scheme is expected to transform agricultural and organic waste into a valuable clean energy resource while advancing the country’s vision of Atmanirbhar Bharat, Waste-to-Wealth, and Viksit Bharat.
The GOBARdhan Scheme has the potential to reshape India’s bioenergy landscape by creating a robust ecosystem for Compressed Biogas production. With long-term policy certainty, financial incentives and assured demand, the initiative is expected to accelerate private investment, strengthen rural livelihoods and establish CBG as a mainstream renewable fuel in India’s energy transition.
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