New Delhi, August 6, 2026: Union Cabinet on Thursday approved the GOBARdhan (National Circular Bioenergy Scheme) with an outlay of ₹23,731 crore, paving the way for a major expansion of India's compressed biogas (CBG) sector over the next decade.
Chaired by Prime Minister Narendra Modi, the Cabinet approved the scheme to be implemented from 2026-27 to 2035-36. The initiative seeks to convert agricultural residue, cattle dung, municipal organic waste and other biomass into clean fuel, organic manure and additional income for rural communities.
Integrated National Framework
The scheme, to be implemented by the Ministry of Petroleum and Natural Gas, brings together the entire CBG value chain under a single national framework. It includes assured market demand, a stable pricing mechanism, capital support, pipeline connectivity, easier access to finance and technology development. The government expects these measures to increase domestic CBG production by nearly ten times during the implementation period.
Officials said the scheme would strengthen India's energy security by increasing domestic production of renewable gas and reducing dependence on imported fossil fuels.
Six Major Components
GOBARdhan scheme has six key components aimed at improving project viability and attracting private investment. The first component provides assured offtake of CBG through City Gas Distribution (CGD) companies to meet the mandatory blending targets of 3 per cent in 2026-27, 4 per cent in 2027-28 and 5 per cent from 2028-29 onwards.
Secondly, the government has introduced a stable administered price of ₹2,110 per MMBTU, giving producers long-term revenue certainty. The scheme also offers capital assistance of up to ₹2 crore per tonne per day (TPD) of installed capacity for eligible greenfield projects, while brownfield expansion projects will also qualify for support.
In addition, financial assistance will be provided for pipeline connectivity between CBG plants and existing gas networks. A dedicated Credit Guarantee mechanism will improve access to institutional finance, particularly for MSMEs, cooperatives, women entrepreneurs and first-time developers.
The sixth component establishes a CBG Ecosystem Challenge Fund to support biomass mapping, feedstock aggregation, technology adoption, district-level planning, organic manure value addition and awareness programmes.
Boost for Farmers and Rural Economy
The government said the scheme would create new income opportunities for farmers by converting crop residue, cattle dung, sugar industry waste and other organic materials into valuable resources.
Besides producing renewable fuel, every CBG plant is expected to generate organic manure, improve waste management and create employment in feedstock collection, transportation and plant operations.
Building on Existing Progress
The Centre said the new scheme builds on earlier initiatives such as SATAT, the Market Development Assistance Scheme, Biomass Aggregation Machinery Scheme, Development of Pipeline Infrastructure Scheme and the National Bioenergy Programme.
These initiatives have already enabled the commissioning of more than 200 compressed biogas plants across the country.
With the launch of GOBARdhan, the government aims to create a nationally integrated bioenergy ecosystem that supports clean energy production, rural development, private investment and the vision of Atmanirbhar Bharat.
Keywords
GOBARdhan Scheme, Compressed Biogas Scheme, CBG India, Bioenergy Scheme, Farmers Renewable Energy, Waste to Wealth