India Approves INR 23,731 Crore GOBARdhan Scheme to Accelerate Compressed Biogas Development

August 12, 2026

In August 2026, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved GOBARdhan, the National Circular Bioenergy Scheme, with a total outlay of INR 23,731 crore. Administered by the Ministry of Petroleum and Natural Gas, the scheme will run from FY 2026-27 to FY 2035-36 and consolidates a fragmented set of prior compressed biogas (CBG) programmes into a single, unified national framework.

The government has stated the scheme aims to increase domestic CBG production nearly ten-fold, mobilise large-scale private investment, and build a vibrant circular bioeconomy around agricultural residue, cattle dung, press mud, and municipal organic waste. For a compressed biogas sector that has, until now, developed amid varying offtake and financing conditions, the GOBARdhan Scheme represents a significant national policy commitment to scaling India's CBG industry.

What is the GOBARdhan Scheme and What is Its Outlay?

GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) is a unified national scheme that brings together previously separate initiatives, the Sustainable Alternative Towards Affordable Transportation (SATAT) programme, Market Development Assistance for organic manure, the Biomass Aggregation Machinery Scheme, the Development of Pipeline Infrastructure Scheme, and Central Financial Assistance for CBG plants under the National Bioenergy Programme, into a single integrated platform covering the entire CBG value chain.

With its INR 23,731 crore outlay running over a decade, the scheme is structured around six components the government describes as “growth engines,” each addressing a distinct barrier that has historically slowed CBG project development in India: assured offtake, stable pricing, capital assistance, pipeline infrastructure, credit guarantee support, and a district-level ecosystem challenge fund.

Why Has India Approved the INR 23,731 Crore GOBARdhan Scheme?

The scheme aims to accelerate a sector that has established a foundation but is yet to scale. By late July 2026, India had 217 operational CBG plants with a combined capacity of about 1,773 TPD, while CBG blending reached only 1.05% in FY 2025-26. As demand for natural gas continues to grow, GOBARdhan seeks to scale CBG production and reduce India's dependence on imported gas by expanding a nationwide renewable gas ecosystem.

How Will the GOBARdhan Scheme Support Compressed Biogas Projects?

Each of the six growth engines targets a specific project development constraint. The Assured CBG Offtake framework requires City Gas Distribution entities to procure CBG in line with a notified blending obligation trajectory, rising from 3% in FY 2026-27 to 4% in FY 2027-28 and 5% from FY 2028-29 onwards across CNG (transport) and PNG (domestic) segments, converting a regulatory obligation into a predictable, long-term demand signal that directly improves project bankability.

The Stable CBG Pricing Framework introduces an administered price of INR 2,110 per Metric Million British Thermal Unit (MMBTU), backed by government support and a market-based cost-sharing mechanism, with a minimum ten-year revenue horizon designed to give producers durable, commercially attractive returns. Capital Assistance provides eligible greenfield CBG projects support of up to INR 2 crore per tonne-per-day (TPD) of installed capacity, extending beyond core plant machinery to feedstock aggregation and organic manure processing assets, with brownfield capacity expansions also eligible.

Pipeline Infrastructure support funds both cluster-based and standalone connections between CBG plants and trunk pipelines or City Gas Distribution networks, reducing evacuation costs and expanding market reach. Credit Guarantee Support extends lending risk-sharing specifically to MSME-based CBG projects, widening access to institutional finance for smaller developers, cooperatives, and first-time entrants.

And the CBG Ecosystem Challenge Fund supports district-level feedstock mapping, aggregation infrastructure, and technology adoption, addressing the localised planning work that individual project developers have historically had to solve on their own.

What Does the Scheme Mean for India's CBG Industry and Investment?

For CBG developers, technology providers, and infrastructure companies, GOBARdhan introduces a national framework intended to provide greater offtake certainty and improve project bankability, improving revenue certainty and potentially improving their attractiveness to lenders. The scheme's ten-year administered price floor and mandatory offtake support long-term financing, while the credit guarantee mechanism creates new opportunities for MSMEs, cooperatives, and rural entrepreneurs with reliable feedstock access.

What Factors Still Determine CBG Project Viability Despite Policy Support?

Policy support changes a project's risk profile; it does not substitute for the underlying feasibility work every CBG project still requires. Feedstock availability and security remain the single largest determinant of project viability, a plant sized against optimistic feedstock assumptions, without secured long-term supply agreements for agricultural residue, cattle dung, press mud, or municipal organic waste, faces underutilisation regardless of how favourable the offtake and pricing framework is.

Location matters for the same reason: feedstock transport radius, proximity to a trunk pipeline or CGD network for evacuation, and access to organic manure off-takers all shift a project's cost structure materially, and GOBARdhan's pipeline infrastructure support only reduces this cost, it does not eliminate the need for a location decision grounded in real feedstock and logistics data. Technology selection, anaerobic digestion configuration, feedstock pre-treatment, and biogas upgrading technology, must match the specific feedstock mix a project will receive, since technology optimised for one feedstock type may not deliver the same performance with a materially different feedstock mix.

Plant capacity has to be sized against realistic, contracted feedstock volumes rather than theoretical district-level availability, and project economics still need to be modelled against the administered price, capital assistance quantum, and financing structure specific to that project, not against sector-wide averages. Offtake logistics, the physical and contractual arrangements connecting a plant to its CGD buyer, remain a project-specific engineering and commercial exercise even with a national assured-offtake framework in place.

How Can Engineering Consultants Support CBG Project Development in India?

Converting GOBARdhan's policy architecture into an operating, bankable CBG plant requires the same engineering disciplines the scheme's financial support cannot substitute for. A feasibility study needs to validate feedstock availability and secure supply commitments specific to a candidate site, model project economics against the applicable administered price and capital assistance and confirm whether pipeline or CGD offtake logistics are physically achievable at the proposed location.

Technology evaluation has to match digestion and upgrading technology to the confirmed feedstock mix rather than a generic plant configuration. Engineering design needs to size the plant, utilities, and feedstock handling and organic manure processing systems correctly from the outset, since undersized or oversized capacity relative to secured feedstock is one of the most common causes of underperforming CBG plants. Project execution determines whether a project reaches the capacity utilisation its financing case assumed.

India has committed INR 23,731 crore to strengthen its compressed biogas ecosystem and support substantial growth in domestic CBG production. Whether individual projects capture that opportunity will depend on how effectively developers translate policy support into sound feedstock, technology, location, financing, and engineering decisions at the project level.

IMARC Engineering’s Perspective

GOBARdhan is the most significant national policy commitment India's compressed biogas sector has received, and its combination of assured offtake, a ten-year price floor, direct capital assistance, and pipeline connectivity support can materially improve the risk-return profile of well-planned CBG projects.

At IMARC Engineering, we believe the scheme increases the importance of translating policy support into technically and commercially viable projects. We support CBG developers and investors with feasibility studies grounded in verified feedstock availability and secured supply agreements, technology evaluation matched to actual feedstock chemistry, site selection weighing logistics and pipeline connectivity, engineering design for plant, utility, and organic manure processing systems, and project execution through commissioning.

As GOBARdhan works to drive a ten-fold increase in domestic CBG production over the next decade, the developers who pair the scheme's financial and market support with rigorous engineering and feasibility work will be the ones whose plants actually reach the utilisation and returns the policy framework was designed to enable.