Union Cabinet approves ₹23,371 crore GOBARdhan scheme to fuel CBG sector growth
The Union Cabinet approved GOBARdhan (National Circular Bioenergy Scheme) with a total outlay of ₹23,731 crore
The scheme will be implemented from FY2026-27 to FY2035-36 to establish compressed biogas (CBG) as a major pillar of India's energy mix
It targets a roughly ten-fold increase in domestic CBG production and aims to mobilise large-scale private investment
Key components include an administered CBG price, capital assistance for greenfield plants, pipeline connectivity, and a credit guarantee mechanism for MSME-based projects
GOBARdhan Scheme — Origin and Evolution
GOBARdhan stands for Galvanising Organic Bio-Agro Resources Dhan. It was launched in April 2018 as a component of Swachh Bharat Mission-Grameen (SBM-G) under the Solid and Liquid Waste Management (SLWM) vertical, aimed at converting cattle dung and organic farm waste into biogas and organic manure at the village level.
Key Details
- Nodal ministry originally: Ministry of Jal Shakti (Department of Drinking Water and Sanitation), under SBM-G
- Objective: keep villages clean, generate rural income, and produce energy/manure from cattle and organic waste
- Over time, GOBARdhan evolved from a sanitation-linked village biogas initiative into a broader circular bioeconomy scheme spanning agricultural residue, press mud, and municipal organic waste
- The new 2026 approval (₹23,731 crore, FY27-FY36) rebrands and scales up GOBARdhan into a National Circular Bioenergy Scheme with CBG as the central output
The Cabinet's approval marks GOBARdhan's transition from a village sanitation-linked scheme to a nationally-scaled compressed biogas industry programme, reflecting the government's circular economy and energy security priorities.
Compressed Biogas (CBG) and the SATAT Scheme
Compressed Biogas is purified biogas (primarily methane, ~90%+ after removal of CO2, H2S, moisture) compressed to be used as a substitute for CNG in transport and industry. The Sustainable Alternative Towards Affordable Transportation (SATAT) scheme, launched in 2018 by the Ministry of Petroleum and Natural Gas, was the earlier initiative encouraging entrepreneurs to set up CBG plants and supply CBG to Oil Marketing Companies (OMCs) for retail sale alongside CNG.
Key Details
- CBG is produced via anaerobic decomposition of biomass feedstock — agricultural residue, cattle dung, sugarcane press mud, municipal solid waste
- Byproduct: nutrient-rich bio-slurry usable as organic fertiliser (linked to India's push for reducing chemical fertiliser dependence)
- Under the new scheme, government has fixed an administered CBG price of ₹2,110 per MMBtu (Metric Million British Thermal Unit) with a minimum 10-year pricing framework for revenue visibility
- Capital assistance of up to ₹2 crore per tonne-per-day (TPD) of installed CBG capacity for eligible greenfield projects
The new scheme builds directly on the SATAT foundation, replacing scattered incentives with a unified pricing and capital-support framework to unlock the CBG sector's stalled growth.
Circular Bioeconomy and National Bioenergy Framework
A circular bioeconomy treats agricultural and organic waste as an input resource rather than a disposal problem, aligning with India's broader waste-to-energy and renewable energy targets. CBG scale-up also supports crop residue management, offering farmers an alternative to stubble burning — a major contributor to seasonal air pollution in North India.
Key Details
- CBG plants offer a market-based outlet for paddy straw and other crop residue, addressing the stubble-burning problem linked to air quality crises
- Complements India's National Bioenergy Programme and biofuel blending targets (ethanol blending, biodiesel) under the National Policy on Biofuels, 2018
- The scheme includes a dedicated credit guarantee mechanism to improve institutional lending to MSME-based CBG projects, addressing a key financing bottleneck that had slowed CBG capacity addition despite earlier SATAT targets
By linking waste management, rural income, clean fuel, and organic manure production, the scheme is positioned as a Mains-relevant example of integrated circular economy policy with cross-sectoral impact (agriculture, energy, environment, rural livelihoods).
- Scheme outlay: ₹23,731 crore
- Implementation period: FY2026-27 to FY2035-36
- Target: approximately ten-fold increase in domestic CBG production
- Administered CBG price: ₹2,110 per MMBtu, with minimum 10-year pricing assurance
- Capital assistance: up to ₹2 crore per TPD of installed CBG capacity for greenfield projects
- Original GOBARdhan launch: April 2018, under Swachh Bharat Mission-Grameen
- SATAT scheme launch: 2018, Ministry of Petroleum and Natural Gas