The Union Cabinet on Thursday approved the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme with a total outlay of Rs 23,731 crore, seeking to increase India's compressed biogas (CBG) production nearly ten-fold over the next decade while boosting rural incomes and reducing dependence on imported fossil fuels.
The scheme, which will be implemented between FY27 and FY36, creates a unified national framework for the CBG sector and will be administered by the Ministry of Petroleum and Natural Gas.
According to the government, the initiative will convert agricultural residue, cattle dung, municipal organic waste, press mud and other biomass into compressed biogas and organic manure, creating a circular bioeconomy while strengthening India's clean energy ecosystem.
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The government said the scheme is built around six key pillars, assured offtake, stable pricing, capital assistance, pipeline infrastructure, credit guarantee support and an innovation challenge fund, to improve project viability and attract private investment.
"GOBARdhan marks a defining moment in India's clean energy journey," the government said in a statement, adding that the programme will transform the country's organic waste into "clean fuel, organic manure, rural income and national economic value."
Under the scheme, City Gas Distribution companies will procure compressed biogas to meet the notified CBG blending obligation, which has been set at 3% in FY27, 4% in FY28 and 5% from FY29 onwards for the transport and domestic gas segments.
The Cabinet also approved a government-backed administered price of Rs 2,110 per MMBTU for compressed biogas, aimed at providing long-term revenue visibility for producers while maintaining affordability for consumers.
To encourage capacity creation, eligible greenfield CBG projects will receive capital assistance of up to Rs 2 crore per tonne per day of installed capacity, while brownfield expansion projects will also qualify for financial support.
The scheme further provides funding for pipeline connectivity linking CBG plants to trunk pipelines and city gas networks, a dedicated credit guarantee mechanism to improve financing for MSMEs and first-time developers, and a challenge fund to support district-level planning, technology adoption and feedstock aggregation.
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The Cabinet said GOBARdhan builds on earlier initiatives such as the SATAT programme, the Market Development Assistance Scheme, the Biomass Aggregation Machinery Scheme, the Development of Pipeline Infrastructure Scheme and the National Bioenergy Programme, under which more than 200 compressed biogas plants have already been commissioned.
According to the government, the programme is expected to strengthen India's energy security, attract large-scale private investment, create new income opportunities for farmers and rural entrepreneurs, improve scientific waste management and lower greenhouse gas emissions through greater use of renewable gaseous fuel.
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