GOBARdhan Scheme Launched: ₹23,731 Crore Bioenergy Push Targets Nearly 10-Fold Growth in CBG Production – Indian PSU

Union Petroleum and Natural Gas Minister Hardeep Singh Puri on Thursday launched the GOBARdhan National Circular Bioenergy Scheme, a ₹23,731-crore initiative aimed at scaling up compressed biogas (CBG) production, mobilising private investment and reducing India’s dependence on imported natural gas.

The scheme, approved by the Union Cabinet on August 6, 2026, will be implemented over 10 years, from FY 2026-27 to FY 2035-36. It seeks to increase domestic CBG production nearly ten-fold by creating an integrated framework for assured procurement, stable pricing, capital assistance, pipeline infrastructure and easier access to finance.

The launch marks a major policy push for India’s emerging bioenergy industry, bringing organic waste management and renewable fuel production together under a national framework.

Six pillars to accelerate CBG production

GOBARdhan seeks to address several longstanding challenges faced by compressed biogas producers, particularly uncertainty over buyers, pricing, financing and connectivity to gas distribution networks.

The scheme’s support framework covers assured offtake of CBG, a stable pricing mechanism, capital assistance for eligible new plants, pipeline infrastructure, credit guarantees and technology development.

A key element is the procurement framework linked to the government’s CBG blending obligation. City Gas Distribution entities will support blending targets of 3% in FY 2026-27, 4% in FY 2027-28 and 5% from FY 2028-29 onwards in the CNG transport and domestic PNG segments.

The policy is intended to provide producers with greater visibility on future demand and improve the commercial viability of new projects.

From agricultural waste to clean energy

The scheme will promote the conversion of cattle dung, agricultural residue, sugar-industry press mud, municipal organic waste and other biomass into compressed biogas and organic manure.

For farmers and rural entrepreneurs, the initiative could open additional income streams through the collection, aggregation and supply of biomass. CBG plants can also create employment in transportation, plant operations, waste processing and the distribution of organic fertilisers.

By creating commercial value from waste, the programme aims to support cleaner waste management while reducing the environmental burden associated with the disposal or burning of agricultural residues.

Major implications for the oil and gas sector

The Petroleum and Natural Gas Ministry will play the central role in implementing the unified scheme, which consolidates support for the CBG ecosystem under a common national framework.

For India’s oil and gas industry, the programme could expand the availability of domestically produced gaseous fuel and create new opportunities across the energy value chain.

Oil marketing companies and city gas distribution companies are important to the scheme’s implementation, particularly through procurement arrangements and the integration of CBG into existing fuel distribution systems.

For public sector energy companies, the expanding CBG ecosystem also presents opportunities in renewable energy investment, biofuel procurement, technology partnerships and the development of waste-to-energy projects.

However, achieving the scheme’s production ambitions will depend on the timely commissioning of plants, reliable supplies of feedstock, access to affordable finance and effective last-mile connectivity to gas networks.

A decade-long push for energy security

GOBARdhan is designed to establish compressed biogas as a more significant component of India’s energy mix while encouraging private investment and developing a circular bioeconomy.

The government expects the programme to support rural economic activity, generate employment and reduce dependence on imported fossil fuels. Its success will ultimately depend on how effectively financial support and procurement commitments translate into operational capacity and sustained CBG production.

By linking waste management with commercial fuel production, the scheme seeks to turn locally available organic resources into an additional source of energy and economic value for India.