The Government has implemented the ₹23,731-crore GOBARdhan scheme. Under the scheme, compressed biogas (CBG) producers will be provided with an assured offtake of up to 100% of their marketable gas, an administered price for at least 10 years, and capital support. According to guidelines issued by the Ministry of Petroleum and Natural Gas on September 15, the scheme will be implemented from FY 2026–27 to FY 2035–36.
Government Aims to Increase Compressed Biogas Production in the Country
The objective of the GOBARdhan scheme is to promote compressed biogas production in the country, create a more favorable market for projects, and encourage private investment.
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GOBARdhan stands for “Galvanizing Organic Bio-Agro Resources Dhan.” It is a government initiative under which biogas, compressed biogas, and organic manure are produced from cattle dung, agricultural residues, food waste, and other organic waste.
Compressed Biogas to Be Supplied to Consumers by Blending It with Natural Gas
Under the scheme, the compressed biogas produced will be supplied to consumers by blending it with natural gas.
The ministry’s guidelines state that six key components will be ensured under the scheme. These include:
- Assured offtake of CBG
- A pricing mechanism
- Capital support
- Pipeline infrastructure
- Credit guarantee support
- A CBG Ecosystem Challenge Fund
Gas Supply to Be Integrated with City Gas Distribution Networks
Under the new system, eligible compressed biogas producers can opt for assured offtake of up to 100% of their gas available for sale. This facility will be subject to technical and operational feasibility.
The gas supply will be connected with City Gas Distribution (CGD) companies and the respective geographical areas. In addition, CBG clusters will facilitate the aggregation of gas and its injection into the main pipeline network.
CBG Procurement and Sales to Be Required at a Prescribed Proportion of CNG and PNG Supply
Compressed biogas companies will be required to procure and sell CBG at a prescribed proportion of their total gas supply for CNG transportation and domestic PNG.
This obligation will be:
- 3% in FY 2026–27
- 4% in FY 2027–28
- 5% from FY 2028–29 onwards
Government Sets Administered Price at ₹2,110 per MMBTU
The government has set an administered price of ₹2,110 per MMBTU for CBG. Based on 95% methane content, this is equivalent to approximately ₹98 per kg.
Taxes and compression charges are not included in this price.
The administered price will remain applicable at least until March 31, 2036. However, it may be revised in the future, taking into account factors such as the cost of CBG production, inflation, and other relevant factors.
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