The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the GOBARdhan (National Circular Bioenergy Scheme) with an outlay of Rs 23,731 crore to accelerate the production of Compressed Biogas (CBG) and strengthen India's clean energy ecosystem.

The scheme will be implemented from FY 2026-27 to FY 2035-36 and aims to increase domestic CBG production nearly ten-fold by converting agricultural residue, cattle dung, municipal organic waste and other biomass into clean fuel and organic manure.

Administered by the Ministry of Petroleum and Natural Gas, GOBARdhan will provide a comprehensive framework for the CBG sector through assured offtake, stable pricing, capital assistance, pipeline infrastructure, credit guarantee support and ecosystem development, with the objective of attracting large-scale private investment and boosting rural incomes.

Key measures include an assured procurement framework linked to the Compressed Biogas Obligation (CBO), a stable administered CBG price of Rs 2,110 per MMBTU, capital assistance of up to Rs 2 crore per tonne per day (TPD) of installed capacity for eligible projects, support for pipeline connectivity, a dedicated credit guarantee mechanism for MSMEs and a CBG Ecosystem Challenge Fund to strengthen district-level implementation.

The government said the scheme will improve energy security by reducing dependence on imported fossil fuels, promote scientific waste management, generate additional income for farmers and rural entrepreneurs, lower greenhouse gas emissions and expand the organic manure economy, while establishing compressed biogas as a key component of India's future energy mix.