Quick Takeaways
- Compressed Biogas policy India is set to strengthen the CBG ecosystem and accelerate cleaner fuel adoption across transport and households.
- The policy aims to support blending mandates, infrastructure expansion, and domestic biogas production to cut LNG imports.
Amid an intensified national push to transition from fossil fuels and scale up cleaner alternatives, the government is preparing a comprehensive policy framework to strengthen the Compressed Biogas policy India and accelerate the development of the domestic CBG ecosystem. The initiative is positioned as a key step in advancing energy security, waste-to-energy solutions, and lower-emission transport fuels.
“I just want to share something on the two-day conference on developing the Indian CBG ecosystem. We had convened high-level conferences. The key outcomes are presented and, based on this, my ministry will be coming up with a policy on CBG in a short time frame,” said Hardeep Singh Puri, Minister for Ministry of Petroleum and Natural Gas, while addressing the issue on Thursday.
Compressed Biogas policy India to strengthen the CBG value chain
The upcoming policy is expected to build on existing interventions across the CBG value chain, with a sharper focus on financial and infrastructure support. According to official indications, the framework will cover financial assistance for biomass procurement, support for aggregation machinery, pipeline infrastructure development, central financing mechanisms, and market development assistance for fermented organic manure and liquid fermented organic manure.
At present, multiple ministries contribute to different parts of the ecosystem. The Ministry of New and Renewable Energy provides financial incentives across the value chain, the Department of Fertilizers supports market development, while the petroleum ministry oversees pipeline infrastructure and biomass aggregation.
Biogas is produced from organic matter such as agricultural residue, food waste, and animal waste, and primarily consists of methane and carbon dioxide. Its use supports effective waste management, lowers greenhouse gas emissions, and increases the share of renewable energy in the fuel mix, while offering a viable substitute for natural gas.
Blending mandates to drive demand in CGD sector
For use as a transport fuel, biogas must be purified and upgraded to achieve a methane concentration of at least 95% by volume. While blending of CBG with CNG remained voluntary until 2024–25, the government has now mandated phased blending for transport fuels and piped natural gas supplied to households.
Under the current roadmap, CBG blending in total CNG and PNG consumption is set at:
The primary objective of this mandate is to create assured demand for biogas within the City Gas Distribution sector. This is also a strategic move to reduce dependence on imported liquefied natural gas, resulting in foreign exchange savings and improved energy resilience.
Private investments and vehicle adoption gain momentum
Private sector participation in the biogas ecosystem is steadily increasing, with plants being set up across multiple states. India currently has an estimated 132 CBG plants with a combined production capacity of about 920 tonnes per day, reflecting growing confidence in the sector’s commercial viability.
Automakers are also aligning with this transition. Recently, Maruti Suzuki showcased biogas-powered variants of its Wagon R and Vitara models. The company plans to establish nine CBG plants in Gujarat by 2027 in partnership with Amul, Banas Dairy, and the National Dairy Development Board. By FY31, the automaker expects CNG and CBG vehicles to account for nearly 35% of its overall powertrain mix, underlining the growing role of biogas in India’s automotive fuel landscape.
“I just want to share something on the two-day conference on developing the Indian CBG ecosystem. We had convened high-level conferences. The key outcomes are presented and, based on this, my ministry will be coming up with a policy on CBG in a short time frame,” said Hardeep Singh Puri, Minister for Ministry of Petroleum and Natural Gas, while addressing the issue on Thursday.
Compressed Biogas policy India to strengthen the CBG value chain
The upcoming policy is expected to build on existing interventions across the CBG value chain, with a sharper focus on financial and infrastructure support. According to official indications, the framework will cover financial assistance for biomass procurement, support for aggregation machinery, pipeline infrastructure development, central financing mechanisms, and market development assistance for fermented organic manure and liquid fermented organic manure.
At present, multiple ministries contribute to different parts of the ecosystem. The Ministry of New and Renewable Energy provides financial incentives across the value chain, the Department of Fertilizers supports market development, while the petroleum ministry oversees pipeline infrastructure and biomass aggregation.
Biogas is produced from organic matter such as agricultural residue, food waste, and animal waste, and primarily consists of methane and carbon dioxide. Its use supports effective waste management, lowers greenhouse gas emissions, and increases the share of renewable energy in the fuel mix, while offering a viable substitute for natural gas.
Blending mandates to drive demand in CGD sector
For use as a transport fuel, biogas must be purified and upgraded to achieve a methane concentration of at least 95% by volume. While blending of CBG with CNG remained voluntary until 2024–25, the government has now mandated phased blending for transport fuels and piped natural gas supplied to households.
Under the current roadmap, CBG blending in total CNG and PNG consumption is set at:
| Financial Year | CBG Blending Share |
|---|---|
| FY26 | 1% |
| FY27 | 3% |
| FY28 | 4% |
| FY29 | 5% |
The primary objective of this mandate is to create assured demand for biogas within the City Gas Distribution sector. This is also a strategic move to reduce dependence on imported liquefied natural gas, resulting in foreign exchange savings and improved energy resilience.
Private investments and vehicle adoption gain momentum
Private sector participation in the biogas ecosystem is steadily increasing, with plants being set up across multiple states. India currently has an estimated 132 CBG plants with a combined production capacity of about 920 tonnes per day, reflecting growing confidence in the sector’s commercial viability.
Automakers are also aligning with this transition. Recently, Maruti Suzuki showcased biogas-powered variants of its Wagon R and Vitara models. The company plans to establish nine CBG plants in Gujarat by 2027 in partnership with Amul, Banas Dairy, and the National Dairy Development Board. By FY31, the automaker expects CNG and CBG vehicles to account for nearly 35% of its overall powertrain mix, underlining the growing role of biogas in India’s automotive fuel landscape.
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