GOBARdhan Scheme can help reduce gas imports by $5 billion, says IBA
Industry body Indian Biogas Association (IBA) stated that the recently approved GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) scheme could help reduce India's natural gas import bill by an estimated $5 billion
The scheme, approved with a financial outlay of Rs 23,731 crore, has been described by industry as a strategic national investment in energy security rather than routine public expenditure
GOBARdhan aims to scale up compressed biogas (CBG) production nationally by converting cattle dung, agricultural residue, municipal organic waste, and press mud into compressed biogas and organic manure
The scheme is structured to run over a ten-year period (FY 2026-27 to FY 2035-36) and includes assured CBG offtake, an administered pricing mechanism, and capital subsidy support for producers
Compressed Biogas (CBG) and the SATAT Scheme
Compressed Biogas is produced by purifying raw biogas — which contains roughly 45-75% methane along with carbon dioxide and trace gases — to remove moisture and impurities, then compressing it for use as a vehicular and industrial fuel comparable to CNG. India's push for CBG began with the SATAT (Sustainable Alternative Towards Affordable Transportation) initiative launched in 2018 by the Ministry of Petroleum and Natural Gas, which invited entrepreneurs to set up CBG plants and sell output to oil marketing companies.
Key Details
- SATAT originally targeted 5,000 CBG plants producing around 15 million tonnes of CBG annually
- CBG is chemically similar to compressed natural gas (CNG) with over 90% methane content after purification, making it usable in existing CNG infrastructure without major retrofitting
- Feedstocks include cattle dung, agricultural stubble, municipal solid waste, sewage, and press mud from sugar mills
GOBARdhan is positioned as the umbrella "National Unified Scheme for Compressed Biogas" that consolidates and scales up the CBG ecosystem originally seeded by SATAT, with a dedicated Rs 23,731 crore outlay to accelerate plant installation nationwide.
GOBARdhan Scheme: Structure and Objectives
GOBARdhan was approved by the Union Cabinet with an outlay of Rs 23,731 crore (about $2.49 billion) covering FY 2026-27 to FY 2035-36, aiming to increase India's domestic CBG production nearly ten-fold and reduce dependence on imported liquefied natural gas (LNG). The scheme provides an integrated framework combining assured offtake, price support, and capital assistance to make CBG projects commercially viable for entrepreneurs, including MSMEs.
Key Details
- Administered CBG price under the scheme: Rs 2,110 per MMBTU, intended to give producers price certainty
- Capital assistance: up to Rs 2 crore per tonne-per-day (TPD) of installed CBG capacity
- Additional components include pipeline infrastructure support, credit guarantees for MSME-led projects, and a dedicated CBG Ecosystem Challenge Fund
The IBA's projected $5 billion reduction in gas import costs stems directly from GOBARdhan's ten-fold CBG production target, which would substitute imported LNG with domestically produced biogas in city gas distribution and industrial use.
Methane Abatement and India's Climate Commitments
Methane is a potent short-lived greenhouse gas, with a global warming potential more than 28 times that of carbon dioxide over a 100-year period, making organic waste management (which otherwise releases methane through uncontrolled decomposition) a high-leverage lever for near-term climate mitigation. Converting cattle dung and organic waste into CBG captures this methane for productive energy use instead of releasing it into the atmosphere, aligning with India's broader climate and circular-economy goals.
Key Details
- India is not a signatory to the Global Methane Pledge (launched at COP26, 2021, targeting a 30% reduction in global methane emissions by 2030 from 2020 levels), but domestic schemes like GOBARdhan contribute to methane mitigation outcomes independently
- CBG production also yields organic bio-manure as a byproduct, supporting reduced dependence on chemical fertilisers
- The livestock and agricultural residue sectors are among India's largest sources of methane emissions, making them a key target for circular bioenergy schemes
By diverting organic waste from open decomposition into CBG plants, GOBARdhan simultaneously advances energy security (import substitution) and environmental objectives (methane capture, reduced fertiliser dependence), reinforcing the "national investment" framing used by industry.
- GOBARdhan financial outlay: Rs 23,731 crore (~$2.49 billion), for FY 2026-27 to FY 2035-36
- IBA's projected gas import savings from the scheme: approximately $5 billion
- Administered CBG price under the scheme: Rs 2,110 per MMBTU
- Capital assistance ceiling: up to Rs 2 crore per TPD of installed CBG capacity
- SATAT scheme (2018) original target: 5,000 CBG plants producing ~15 million tonnes of CBG annually
- Methane's global warming potential: over 28 times that of CO2 over 100 years