Cabinet approves GOBARdhan scheme with Rs 23,731 crore outlay

The Union Cabinet, chaired by the Prime Minister Narendra Modi, has approved GOBARdhan, the National Circular Bioenergy Scheme, with a total outlay of Rs 23,731 crore.

The Scheme will be implemented from FY 2026-27 to FY 2035-36 and will establish Compressed Biogas as a major pillar of India’s future energy mix.

Through assured demand, remunerative and stable pricing, capital assistance, pipeline infrastructure, credit support and technology development, GOBARdhan will provide the strong and predictable framework required to take India’s CBG sector to national scale.


The Scheme aims to increase domestic Compressed Biogas (CBG) production nearly ten-fold, mobilize large-scale private investment and create a vibrant circular bioeconomy across the country.

Administered by the Ministry of Petroleum and Natural Gas, the Scheme creates one integrated platform across the entire CBG value chain. This will enable faster implementation, stronger project economics and greater certainty for investors, lenders and developers.

India’s demand for natural gas is expanding across transport, households, industry and commercial sectors. CBG can meet a growing share of this demand through domestic renewable production, strengthening energy resilience and reducing dependence on imported fossil fuels.

CBG is chemically equivalent to natural gas and can be seamlessly integrated into the existing gas ecosystem. It therefore combines the benefits of a renewable fuel with the reach and utility of India’s expanding gas infrastructure.

GOBARdhan establishes a dedicated CBG Offtake Assurance framework to provide a reliable and predictable market for producers. Procurement by City Gas Distribution entities will support achievement of the notified CBG Obligation trajectory of 3% in FY 2026-27, 4% in FY 2027-28 and 5% from FY 2028-29 onwards in the CNG (Transport) and PNG (Domestic) segments.

GOBARdhan introduces a stable administered CBG price of Rs.2,110 per Metric Million British Thermal Unit (MMBTU), supported through a government-backed pricing framework. The framework provides long-term revenue visibility while protecting consumer affordability through a combination of Government support and a market-based cost-sharing mechanism.

A.R. Shukla, President, Indian Biogas Association, hailed the government's decision and said the sector has long argued that biogas needed three things, i.e., a remunerative price, assured offtake and capital support. This scheme delivers all three, he added.

"Its real impact will not be measured in kilograms of gas alone. It will be measured in paddy straw that is baled instead of burnt across whole India; in dung that earns a dairy farmer a second income; in fermented organic manure that rebuilds our depleted soils; and in imported LNG we no longer have to pay for," added Shukla.

Meanwhile, with a minimum ten-year horizon, the pricing framework will provide producers with durable revenue certainty, commercially attractive returns and a stronger business case for investment and capacity expansion.

Eligible greenfield CBG projects will receive capital assistance of up to Rs.2 crore per ton per day (TPD) of installed CBG capacity.

The support extends beyond core plant machinery to critical value-chain assets for feedstock aggregation, organic manure processing and value addition. Brownfield projects expanding their production capacity will also be eligible.

The Scheme supports both cluster-based and standalone pipeline infrastructure connecting CBG plants with trunk pipelines and City Gas Distribution networks. Greater pipeline connectivity will reduce evacuation costs, improve reliability, expand market reach and enable higher utilization of domestically produced CBG.