Compressed Biogas (CBG) and the SATAT Scheme

Compressed Biogas, or CBG, is a clean fuel made from wet waste like cow dung, crop leftovers, sugar mill waste and kitchen waste. The waste is first rotted in a closed tank without air, which gives raw biogas. This gas is then cleaned and packed under high pressure. The final product is almost the same as CNG (Compressed Natural Gas), so it can run the same vehicles and flow through the same pipes.

SATAT is the government initiative, launched in 2018, that set up a system for oil and gas companies to buy this CBG.

Why do we need it?

India uses a lot of natural gas for vehicles, homes, fertiliser plants and industry. About half of it is imported, which costs foreign exchange and makes India depend on other countries. At the same time, India has huge amounts of organic waste. CBG turns this waste into a home-made fuel. It also cuts pollution from stubble burning, reduces methane from rotting waste and gives farmers a new source of income.

How is CBG made?

The process is simple to picture. Think of how food is digested in a cow's stomach without air. A CBG plant does the same in a big sealed tank.

1. Collection: Waste such as dung, crop residue, press mud and food waste is collected and brought to the plant.
2. Anaerobic digestion: The waste goes into a closed tank called a digester. Bacteria break it down without oxygen. This gives raw biogas, which is roughly 55-60% methane and 35-40% carbon dioxide, with small amounts of hydrogen sulphide, ammonia and moisture. The exact mix changes with the type of waste used.
3. Purification (upgrading): Carbon dioxide, hydrogen sulphide and water are removed. The gas is now more than 90% methane.
4. Compression: The clean gas is compressed to about 250 bar pressure and filled in cylinders (cascades) or sent into pipelines.
5. By-product: The leftover slurry becomes Fermented Organic Manure (FOM) or liquid manure (LFOM), which can be sold to farmers.

The quality standard

CBG must meet the Bureau of Indian Standards specification IS 16087:2016. Under this standard, CBG must contain at least 90% methane by volume, with strict limits on carbon dioxide, hydrogen sulphide and moisture. This is why CBG can replace CNG directly.

Where did SATAT come from?

SATAT stands for Sustainable Alternative Towards Affordable Transportation. It was launched on 1 October 2018 by the Ministry of Petroleum and Natural Gas. Its original target was 5,000 CBG plants, producing about 15 million tonnes of CBG a year. Under SATAT:

• Oil Marketing Companies (OMCs) like Indian Oil, and gas companies, invited entrepreneurs to build CBG plants.
• These companies promised to buy the CBG through long-term agreements.
• The CBG was sold at their fuel stations as a green fuel, alongside CNG.
• The starting purchase price was ₹46 per kg plus taxes. The pricing method was later changed and linked to the retail price of CNG.

How has support grown?

Over time, the government added more pieces:

• CBG Blending Obligation (CBO): In November 2023, the National Biofuels Coordination Committee announced that City Gas Distribution companies must mix CBG into their CNG (for transport) and PNG (for homes). It was voluntary until 2024-25 and became compulsory from 2025-26. The targets: 1% in 2025-26, 3% in 2026-27, 4% in 2027-28 and 5% from 2028-29.
• Market Development Assistance (MDA): ₹1,500 per tonne for Fermented Organic Manure from these plants, to help its sale.
• Other support: Machinery for collecting biomass, help to build pipelines connecting plants to gas grids, and central financial assistance for plants under the Ministry of New and Renewable Energy's bioenergy programme.
• Tax relief: From 2 February 2026, the value of biogas or CBG blended into CNG is kept out of the value on which central excise duty is charged, to avoid taxing the same gas twice.
• 2026: All these supports were brought together under the GOBARdhan National Circular Bioenergy Scheme with an administered price of ₹2,110 per MMBTU and capital help of up to ₹2 crore per tonne per day of capacity.

Commonly confused concepts

• Biogas vs CBG: Biogas is the raw gas from the digester (about half methane). CBG is biogas that has been cleaned to over 90% methane and compressed. Only CBG can replace CNG.
• CNG vs CBG: Both are mainly methane and look the same to a vehicle. CNG comes from natural gas dug out from under the ground (a fossil fuel). CBG comes from fresh organic waste, so it is renewable.
• CNG vs LNG vs LPG: CNG is natural gas squeezed under high pressure. LNG (Liquefied Natural Gas) is natural gas cooled to about minus 162°C so it becomes liquid, used to ship gas across oceans. LPG (Liquefied Petroleum Gas, cooking gas) is mainly propane and butane, not methane.
• CBG vs ethanol: Both are biofuels. Ethanol is a liquid made from sugarcane, grains or crop waste and is mixed with petrol. CBG is a gas and replaces CNG.
• SATAT vs GOBARdhan: SATAT focuses on buying CBG through oil and gas companies. GOBARdhan is the wider umbrella covering the whole waste-to-energy chain.

Issues, criticism and the way forward

• Far behind target: The goal of 5,000 plants set in 2018 is still far away. Only a few hundred plants were working by 2026.
• Weak finance: Banks saw CBG plants as risky because of unsure feedstock and prices. Many projects could not raise loans.
• Feedstock problems: Waste must be collected every day from many small farms. Seasonal crop residue must be stored for months.
• Manure not selling: The organic manure competes with cheap, subsidised chemical fertilisers.
• Way forward: Assured buyers and stable prices (now given by the 2026 scheme), easier credit through guarantees, pipeline links, district-level waste mapping and better marketing of organic manure. Experts also suggest using existing networks like sugar mills, dairies and cooperatives.

Concepts to Know

• Anaerobic digestion: Breaking down organic waste by bacteria in a sealed container without oxygen. It produces biogas and a nutrient-rich slurry.
• Press mud: A soft, wet waste left over when sugar is made from sugarcane juice. It is rich in organic matter and good for biogas.
• Bar: A unit of pressure. Normal air pressure at sea level is about 1 bar, so 250 bar is about 250 times that.
• Oil Marketing Companies (OMCs): Companies like Indian Oil, Bharat Petroleum and Hindustan Petroleum that sell fuel to the public through petrol pumps.
• Foreign exchange: Money in other countries' currencies, like US dollars, which India needs to pay for imports.
• Blending obligation: A legal target that makes fuel suppliers mix a fixed share of a green fuel into the regular fuel they sell.