New Delhi, August 6. The Union Cabinet, chaired by Prime Minister Narendra Modi, on Thursday approved the National Circular Bioenergy Scheme (GOBARdhan) with an outlay of ₹23,731 crore. The scheme aims to convert agricultural residues, cow dung, municipal organic waste, and other biomass resources into compressed biogas (CBG), organic fertilizer, and a source of rural income.
The scheme will be implemented from the financial years 2026-27 to 2035-36 and will establish compressed biogas (CBG) as a key pillar of India’s energy system. Through this scheme, the government aims to increase CBG production in the country by nearly 10 times, attract private investment, and strengthen the circular bioeconomy.
The scheme, run by the Ministry of Petroleum and Natural Gas, will provide assured markets, stable prices, capital assistance, pipeline connectivity, credit support, and technical support to CBG producers, thereby enhancing the economic viability of projects and increasing investor confidence.
Six Key Components of the Scheme
1. Assured Offtake Assurance
City Gas Distribution (CGD) companies will procure CBG. The target for CBG blending is 3 percent in 2026-27, 4 percent in 2027-28, and 5 percent from 2028-29.
2. Stable Price Mechanism
The government has fixed an administered price of ₹2,110 per MMBTU for CBG, which will provide long-term revenue stability to producers.
3. Capital Assistance
New (greenfield) CBG projects will receive capital assistance of up to ₹2 crore per tonne per day (TPD) capacity. Brownfield projects that expand production capacity will also be covered.
4. Pipeline Infrastructure Development
A pipeline network will be developed to connect CBDG plants to gas pipelines and city gas networks, reducing transportation costs and facilitating market access.
5. Credit Guarantee Facility
A special credit guarantee mechanism will be developed to provide easy access to credit for MSME-based CBDG projects, benefiting women entrepreneurs and new investors.
6. CBDG Ecosystem Challenge Fund
A special fund will be created at the district level to assess feedstock resources, adopt technologies, enhance organic fertilizer value addition, and build capacity and raise awareness.
Benefits to Farmers and the Rural Economy
According to the government, this scheme will create new income opportunities for farmers, cooperatives, feedstock suppliers, and rural entrepreneurs. It will also promote the scientific management of agricultural residues, dung, and urban organic waste, thereby reducing greenhouse gas emissions and boosting organic fertilizer production. The government says that the Gobardhan scheme will prove to be an important step towards accelerating the goals of energy security, ‘waste to wealth’, self-reliant India and developed India.
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