Daijiworld Media Network – New Delhi
New Delhi, Sep 20: The government has operationalised its Rs 23,731-crore GOBARdhan scheme for compressed biogas (CBG), offering producers assured offtake of up to 100 per cent of their output, an administered price for at least 10 years and capital assistance to make waste-to-energy projects more commercially viable.
The Petroleum and Natural Gas Ministry, in operational guidelines issued on September 15, detailed the framework for the scheme, which will run from 2026-27 to 2035-36 and aims to create a more predictable market for CBG producers.
GOBARdhan, or Galvanising Organic Bio-Agro Resources Dhan, seeks to convert organic waste such as cattle dung, agricultural residue, food waste and other biomass into biogas, CBG and organic manure. The CBG will be co-mingled with natural gas for supply to consumers.
According to the ministry guidelines, the scheme has six components covering assured CBG offtake, pricing, capital assistance, pipeline infrastructure, credit guarantee support and a CBG ecosystem challenge fund.
Eligible CBG producers can opt for assured offtake of up to 100 per cent of CBG available for sale, subject to technical and operational feasibility. The gas will be mapped to City Gas Distribution entities and geographical areas or identified CBG clusters for aggregation and injection into trunk pipelines.
City gas distributors will also be required to procure and sell CBG within their overall gas supplies for CNG transport and domestic PNG segments. The obligation will be 3 per cent in 2026-27, 4 per cent in 2027-28 and 5 per cent from 2028-29 onwards.
The government has fixed an administered CBG price of Rs 2,110 per million British thermal unit, equivalent to around Rs 98 per kg at 95 per cent methane content, excluding taxes and compression charges. The price will remain in place for a minimum of 10 years until March 31, 2036, subject to prospective revisions based on production economics, inflation and other factors.
The government will also provide affordability support to the designated synchronisation operator for 10 years, capped at Rs 10 per kg of CBG procured, to bridge the difference between the administered procurement price and downstream affordability. GAIL has been designated as the synchronisation operator for CBG procurement, pooling and operation of the CBG-CGD synchronisation mechanism.
The framework provides capital assistance of up to Rs 30 crore per CBG project under the two eligible capital-support components. New greenfield plants will receive assistance of Rs 1.25 crore per tonne per day of eligible CBG capacity, while brownfield projects will receive support at 50 per cent of the applicable greenfield rate for additional capacity created through fresh investment.
Existing biogas plants upgraded to produce CBG can receive Rs 0.60 crore per tonne per day, subject to a project ceiling of Rs 5 crore. A separate component will reimburse up to 50 per cent of eligible expenditure on feedstock aggregation and organic-manure value-addition machinery, capped at Rs 0.75 crore per tonne per day.
The assistance will be linked to project milestones rather than provided as an unconditional upfront grant. These include obtaining approvals, commencing commercial sale of CBG and meeting subsequent plant-performance requirements. Production data will be assessed through SCADA systems and other verification mechanisms.
The new framework will subsume the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative from September 1, 2026. Liabilities already committed under SATAT will continue to be honoured, while existing SATAT retail outlets have been encouraged to integrate into the GOBARdhan framework.
The government expects the new framework to provide greater revenue visibility for CBG producers seeking project finance and support significant expansion of domestic CBG production by bringing demand, pricing, capital assistance, infrastructure and financing under a single framework.