Cabinet approves ₹23,731 crore GOBARdhan scheme to boost compressed biogas

The Union Cabinet on Thursday approved the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme with a total budgetary support of ₹23,731 crore to promote compressed biogas (CBG) production, strengthen energy security and reduce dependence on imported natural gas.

The scheme is built around six pillars: assured offtake, price stability, capital expenditure support, pipeline infrastructure development, credit guarantee and a challenge fund for innovation.

Under the scheme, city gas distribution companies will procure compressed biogas to meet mandatory blending targets of 3% in 2026-27, 4% in 2027-28 and 5% from 2028-29 onwards for compressed natural gas used in transport and piped natural gas supplied to households.

As part of the assured offtake mechanism, every CBG plant will be linked to a buyer through the City Gas Distribution (CGD) network or the trunk pipeline network.

The government will also introduce an administered price mechanism for CBG to provide price stability and shield buyers from volatility in global fuel markets.

Under the capital support component, eligible projects will receive assistance of up to ₹2 crore per tonne per day (TPD) capacity for setting up plants, developing feedstock systems and installing organic manure processing machinery.

The scheme also provides support for connecting CBG plants to trunk pipelines and CGD networks to improve evacuation and distribution infrastructure.

The government will provide credit guarantee coverage of up to 85% on eligible loans for MSME-led projects.

A challenge fund will support district-level implementation, feedstock development, research and innovation, technology adoption, by-product value addition and stakeholder awareness initiatives.

India, the world's third-largest oil importer, has been expanding the use of biofuels and domestic gas production as part of efforts to improve energy security and reduce carbon emissions.

The government said more than 200 compressed biogas plants have already been commissioned under earlier initiatives, including the Sustainable Alternative Towards Affordable Transportation (SATAT) programme, and the new scheme is intended to scale up the sector nationwide.