Union Cabinet Approves National Circular Bio-Energy Scheme – GOBARdhan with a Total Outlay of ₹2,331 Crore

The Union Cabinet has approved the National Circular Bio-Energy Scheme – GOBARdhan with a total outlay of ₹2,331 crore. Its objective is to accelerate the development of Compressed Biogas (CBG) and establish it as a key pillar of India's future energy mix.

National Circular Bio-Energy Scheme – GOBARdhan

¨     Scheme Duration: The scheme will be implemented from the financial year 2026–27 to 2035–36.

¨     Administrative Ministry: Ministry of Petroleum and Natural Gas.

¨     Objective: It aims to increase domestic Compressed Biogas (CBG) production approximately tenfold, attract large-scale private investment, and build a robust circular bio-economy across the country.

¨     It aims to provide a strong and predictable framework through assured demand, remunerative and stable pricing, capital support, pipeline infrastructure, credit assistance, and technology development.

¨     The scheme converts agricultural residues, cattle dung, pressmud, organic waste from municipal bodies, and other biomass into clean fuel, organic manure, rural income, and national economic value.

 The scheme is based on the following initiatives

¨     Sustainable Alternative Towards Affordable Transportation (SATAT)

¨     Market Development Assistance (MDA) scheme

¨     Biomass Aggregation Machinery (BAM) scheme

¨     Pipeline Infrastructure Development (DPI) scheme

¨     Central Financial Assistance (CFA) under the National Bio-energy Programme

Six components of GOBARdhan

1.     Assured CBG Offtake: The scheme establishes a dedicated CBG offtake assurance framework to provide a reliable and predictable market for producers. Procurement by City Gas Distribution (CGD) entities will help meet notified CBG obligations in the CNG (transport) and PNG (domestic) sectors—specifically 3% in FY 2026–27, 4% in FY 2027–28, and 5% from FY 2028–29 onwards.

2.     Stable Pricing Framework: A stable administered CBG price of ₹2,110 per Million Metric British Thermal Units (MMBTU) has been set under a pricing framework valid for a minimum of 10 years. This ensures long-term income certainty and helps maintain affordability for consumers.

3.     Capital Support: Eligible greenfield CBG projects will receive capital support of up to ₹2 crore per tonne per day (TPD) of installed CBG capacity. Brownfield expansion projects will also be eligible. This support will not be limited to core plant machinery but will also cover feedstock aggregation and organic manure processing.

4.     Pipeline Infrastructure Development: Support will be provided for cluster-based and standalone pipeline infrastructure connecting CBG plants to main pipelines and City Gas Distribution networks.

5.     Loan Guarantee Support: Institutional credit will be extended to eligible MSME-based CBG projects through a dedicated loan guarantee mechanism. This will improve access to affordable financial assistance and reduce collateral requirements.  

6.     CBG Ecosystem Challenge Fund: This will provide support for the assessment and mapping of feedstock resources, feedstock aggregation infrastructure, district-level CBG development planning, technology adoption, value addition of organic manure, capacity building, and stakeholder awareness.

Impact of the Scheme

¨     Increasing domestic CBG production nearly tenfold and achieving a target of 5 Million Metric Standard Cubic Meters per Day (MMSCMD).

¨     Reducing dependence on imported fossil fuels, thereby saving over ₹40,000 crore in foreign exchange.

¨     Attracting large-scale private investment to develop a CBG industry estimated at ₹75,000 crore, facilitated by assured offtake, stable pricing, capital support, pipeline connectivity, and credit assistance.

¨     Generating approximately 1.5 lakh jobs and creating additional income opportunities for farmers, feedstock aggregators, cooperatives, MSMEs, and rural entrepreneurs.

¨     Promoting the scientific utilization of agricultural residues, cattle dung, press mud, and organic waste from urban local bodies; expanding the organic manure economy (FOM and LFOM); and reducing greenhouse gas emissions.