Govt Approves ₹23,731 Crore GOBARdhan Scheme to Transform Waste into Clean Energy

New Delhi | SugarToday
In a landmark decision aimed at strengthening India’s energy security and rural economy, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the GOBARdhan – National Circular Bioenergy Scheme with a total outlay of ₹23,731 crore.

The scheme will be implemented over 10 years, from FY 2026-27 to FY 2035-36. Its objective is to establish Compressed Biogas (CBG) as a core pillar of India’s energy mix by converting agricultural residue, cattle dung, press mud, municipal organic waste, and other biomass into clean fuel, organic manure, rural income, and economic value.

Addressing Energy Security
Announcing the decision, the Union Minister of Petroleum and Natural Gas said India imports nearly 50% of its natural gas requirement. Recent geopolitical disruptions, including volatility in key transit routes such as the Strait of Hormuz, have impacted a significant share of LNG imports.
“Aatmanirbharta is no longer an option, it is a necessity. Compressed Bio-Gas is a domestic solution,” the Minister said.

Six Growth Engines of GOBARdhan
The scheme is structured around 6 pillars to de-risk investment and scale the ecosystem:

1. Assured Offtake: City Gas Distribution (CGD) entities will have mandatory CBG procurement targets. Blending obligations are set at 3% in FY 2026-27, 4% in FY 2027-28, and 5% from FY 2028-29 onwards for CNG (Transport) and PNG (Domestic) segments.
2. Stable Pricing: A government-administered price of ₹2,110 per MMBtu for a minimum 10-year period to ensure revenue certainty.
   Conversion for readers: Using the standard CBG industry norm of 1 MMBtu ≈ 20.5 kg, this equals ₹103 per kg.
   For comparison, the previous OMC procurement price was ₹1,478/MMBtu, or ₹75.8 per kg. The new price provides 43% higher unit realization.
   Quick rule: ₹/kg ≈ ₹/MMBtu ÷ 20.5
3. Capital Assistance: Financial support of up to ₹2 crore per TPD of installed CBG capacity for eligible greenfield projects. This covers not just plant and machinery, but also feedstock aggregation and organic manure processing infrastructure. Brownfield expansions are also eligible.
4. Pipeline Infrastructure: Development of cluster-based and standalone pipelines to connect CBG plants to trunk gas pipelines and CGD networks, reducing logistics costs.
5. Credit Guarantee: A dedicated mechanism to provide up to 85% guarantee cover on eligible loans for MSME-led CBG projects, improving bankability.
6. Challenge Fund: Support for district-level rollout, feedstock supply chain development, R&D, technology adoption, by-product value addition, and stakeholder awareness.

Building on Existing Programs
GOBARdhan consolidates ongoing efforts including the SATAT initiative, Market Development Assistance for Fermented Organic Manure, Biomass Aggregation Machinery Scheme, Pipeline Infrastructure Development, and Central Financial Assistance under the National Bioenergy Programme.
According to the government, these programs have supported the commissioning of over 200 CBG plants across the country to date.

Expected Impact by 2036
Over the 10-year period, the government projects:

• 10x increase in domestic CBG production capacity
• Forex savings of over ₹40,000 crore through reduced natural gas imports
• Creation of a ~₹75,000 crore CBG industry contributing to GDP
• 1.5+ lakh jobs across collection, plant operations, and logistics
• 250 million metric tonnes of organic fertilizer/digestate production _
• 40+ million tonnes of CO2 emissions avoided
• 10 million metric tonnes of fossil fuel displacement
• The fertilizer number appears high and should be cross-verified with the final scheme DPR. Typical yields are 8-10 kg digestate per kg CBG.

A Unified Vision
Administered by the Ministry of Petroleum and Natural Gas, GOBARdhan creates a single integrated platform across the CBG value chain. The aim is faster project execution, improved unit economics, and long-term policy certainty for developers, lenders, and investors.

The scheme embodies the government’s vision: “India’s waste will fuel India’s growth. India’s villages will become centers of clean energy production. India’s farmers will become partners in the nation’s energy security.”*