Introduction

As a developing economy India faces the challenge of balancing environment conservation while promoting rapid economic development. In an effort to harmonise these twin objectives the Government of India has taken major steps towards enhancing the adoption and use of compressed bio-gas (CBG).

Integration of CBG into the natural gas infrastructure has been a long-standing goal of Ministry of Petroleum and Natural Gas (MoPNG) under its sustainable alternative towards affordable transportation (SATAT) initiative launched in 2018. The CBG-CGD synchronisation scheme aims to integrate CBG into the city gas distribution (CGD) network, facilitating its blending with piped natural gas (PNG) for domestic use and with compressed natural gas (CNG) for transportation. The National Biofuels Coordination Committee mandates CGD networks to blend a prescribed minimum percentage of CBG in PNG and CNG starting with 1% in 2025 and reaching 5% by 2028. It further includes plans for the aviation industry to blend sustainable aviation fuel (SAF) with aviation turbine fuel starting with 1% SAF for 2027 and 2% SAF for 2028. Galvanising organic bio-agro resources dhan (GOBARdhan) mission is another initiative of the government with its primary objective to transform organic waste-to-energy projects. It is a single stop repository for assessing investment and participation in CBG sector by acting as the unified registration portal for streamlining the process of setting up biogas plants in India.

Suggestions for growth of CBG Sector in India

Financial assistance schemes: The Government had issued guidelines for providing financial assistance to CBG producers in February 2024, for the procurement of biomass aggregation machinery (the ‘2024 Guidelines’). The 2024 Guidelines have recently been revised on July 8, 2025 (the ‘Scheme’) amending the disbursal of financial assistance. Though the Scheme primarily aims to encourage all entrepreneurs for setting up CBG plants, it discriminates between new and under construction projects in availing financial assistance. For instance, the Scheme requires under construction projects to have achieved at least 25% of physical progress at site to be considered an eligible applicant and further imposes the condition of achieving 50% of physical progress as a prerequisite for the disbursement of such assistance. The GOBARdhan portal discloses that 166 plants are presently under construction, and 116 plants are yet to start construction. Since the number of under construction projects are more, the Scheme should remove the condition of disbursing financial assistance to only those projects which have completed 50% of physical progress. Additionally, the objective of the Scheme reads “facilitating biomass aggregation and marketing,” however, it remains silent on any guidelines for ‘biomass marketing’ and how it aims to facilitate farmers at the ground level. The Government should consider providing financial assistance for marketing of CBG and providing assistance to farmers for finalizing offtake arrangements with oil marketing companies.

Awareness initiatives for Carbon Credits and CBG: On February 2, 2023, Ministry of Environment, Forest and Climate Change upon the recommendations of National Designated Authority for the Implementation of the Paris Agreement finalised the list of activities for trading carbon credits under bilateral/cooperative approaches in adherence to Article 6 of the Paris Agreement. CBG has been recognised under ‘greenhouse gas mitigation activities’ head making it a significant project category qualified for earning carbon credits. These carbon credit certificates can thus serve as an additional revenue stream for CBG producers. As of 2023, only 4 CBG projects are registered under verified carbon standard (VCS) and 22 under gold standard (GS). The government should consider launching more awareness programs amongst entrepreneurs desiring to set up CBG plants to register their projects with VSC or GS. This will help in making the business case of Indias CBG sector more robust. An example of a CBG plant availing carbon credits is the ‘GOBARdhan plant’ located in Indore, Madhya Pradesh – Asias largest municipal solid waste biogas plant. Producing 17,000 kilograms of Bio-CNG every day, the plant earned 9 crores in the first two years of carbon trading in the international carbon trading market.

Conclusion:

In 2020 the Government of India estimated the volume of waste generated to be 62 million tonnes which it predicted to rise to 150 million tonnes by 2030. With more than 50% of municipal solid waste consisting of organic waste, underutilization of our nation’s biomass has gravely impacted the growth of biogas industry. As on date, SATAT data reflects only 113 commissioned CBG plants as opposed to its aggressive goal of setting up 5,000 CBG plants by 2023. With the right policy pushes, India has the potential and the resources to emerge as a global leader in biogas, turning its waste into wealth and leading the transition to a cleaner, and more equitable energy future.