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					</table><p>The Ministry of Petroleum and Natural Gas (<a href="https://mopng.gov.in/en" target="_blank" rel="noopener">MoPNG</a>) has issued operational guidelines for the GOBARdhan program to accelerate the development of the compressed biogas (CBG) sector.</p>
<p>The government has <a href="https://www.mercomindia.com/cabinet-approves-%E2%82%B9237-billion-national-compressed-biogas-program" target="_blank" rel="noopener">approved</a> the program with a total outlay of ₹237.31 billion (~$2.5 billion) for the period from financial year (FY) 2026-27 to FY 2035-36.</p>
<p><strong>CBG Offtake Assurance</strong></p>
<p>Under the first component, eligible CBG producers can opt for assured offtake of up to 100% of the CBG available for sale. CBG plants will be mapped to either city gas distribution (CGD) entities and geographical areas or identified clusters for aggregation and injection into trunk pipelines.</p>
<p>All CGD entities must procure and sell CBG in their combined compressed natural gas (transport) and piped natural gas (domestic) supplies in line with the notified CBG obligation. The obligation is 3% in FY 2026-27, 4% in FY 2027-28, and 5% from FY 2028-29.</p>
<p>The existing Sustainable Alternative Towards Affordable Transportation (SATAT) initiative will be subsumed under GOBARdhan from September 18, 2026.</p>
<p>GAIL has been designated as the Synchro Operator and will procure CBG from registered producers, pool it with domestic gas, and supply the co-mingled gas to CGD entities.</p>
<p>Producer shortfalls will attract a financial penalty equivalent to 10% of the prevailing administered CBG price (ACP), although no such penalty will apply during the first year of a tripartite agreement to allow plants to stabilize operations.</p>
<p><strong>CBG Pricing Framework</strong></p>
<p>The second component establishes an administered price intended to provide CBG producers with greater revenue certainty.</p>
<p>The initial ACP has been set at ₹2,110 (~$22.11)/MMBtu, equivalent to approximately ₹98 (~$1.03)/kg of CBG at 95% methane content, excluding taxes and compression charges. Payments will be based on the quantity measured at the custody transfer point.</p>
<p>The Project Approval Board (PAB) will determine the ACP for each 12-month period. The price can be revised based on factors including CBG production economics and the Consumer Price Index.</p>
<p>The government will also provide affordability support to the Synchro Operator from FY 2026-27 through FY 2035-36, capped at ₹10 (~$0.105)/kg of CBG. The Petroleum Planning and Analysis Cell will calculate the weighted average retail selling price of CNG across authorized CGD areas to support determining this assistance.</p>
<p>The pricing framework subsumes the Department of Fertilizers&#8217; Market Development Assistance program from September 18, 2026.</p>
<p><strong>Capital Assistance for CBG Projects</strong></p>
<p>The capital assistance component supports establishing CBG plants and purchasing feedstock aggregation and organic manure value-addition machinery.</p>
<p>New greenfield projects commissioned after the program&#8217;s notification, and brownfield projects adding incremental CBG production capacity through new plants and machinery, will be eligible.</p>
<p>For greenfield CBG plants, capital assistance will be ₹12.5 million (~$130,964) per ton per day (TPD) of eligible installed capacity. Brownfield expansion projects will receive 50% of this rate for incremental capacity created through fresh capital expenditure.</p>
<p>Projects in special-category areas, including the northeastern states and Sikkim, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, Ladakh, Lakshadweep, and the Andaman and Nicobar Islands, will receive an additional 20% capital support.</p>
<p>Existing biogas plants upgraded by their owners to produce CBG will be eligible for assistance of ₹6 million/TPD, capped at ₹50 million (~$523,855) per project.</p>
<p>Capital assistance for CBG plants will be disbursed in three stages. The first 25% will be linked to Consent to Establish or the relevant Petroleum and Explosives Safety Organization approval, another 25% to the first sale of CBG, and the remaining 50% to plant performance. Full payment of the final tranche requires a plant load factor of at least 75%.</p>
<p>For feedstock aggregation and organic manure value-addition machinery, assistance will cover 50% of actual eligible procurement expenditure, capped at ₹7.5 million (~$78,578)/TPD of eligible CBG plant capacity. This support is not available to brownfield projects.</p>
<p>Applications for capital assistance can be submitted until December 31, 2030.</p>
<p><strong>Pipeline Infrastructure</strong></p>
<p>The fourth component supports pipelines connecting CBG plants with CGD networks and trunk pipelines. It covers direct connections and connections through gas gathering stations.</p>
<p>For CGD network connectivity, registered CBG plants must have at least 2 TPD of installed capacity. Projects exceeding 5 TPD will receive preference. Both commissioned and under-construction plants are eligible, but under-construction projects must have achieved at least 25% physical progress.</p>
<p>Financial assistance will be available for pipeline lengths of up to 75 km. Support will cover 50% of eligible project costs, capped at ₹5 million (~$52,386)/km for steel pipelines and ₹750,000 (~$7,858)/km for medium-density polyethylene pipelines.</p>
<p>For trunk pipeline connectivity, clusters must comprise at least two CBG plants and preferably have aggregate installed capacity of 20 TPD or more, with each individual plant having at least 2 TPD capacity.</p>
<p><strong>Credit Guarantee Support</strong></p>
<p>The program also introduces credit guarantees for term loans to CBG projects, particularly those developed by micro, small, and medium enterprises (MSMEs).</p>
<p>Eligible loans can have a tenure of up to 15 years, including an 18-month moratorium. The guarantee will cover 85% of the loan amount, capped at ₹200 million (~$2.09 million) for general MSME borrowers and ₹250 million (~$2.62 million) for women-led MSMEs. The government has earmarked ₹6.25 billion (~$65.48 million) for this component.</p>
<p>The credit guarantee program will operate until December 31, 2030, or until cumulative loans of ₹150 billion (~$1.57 billion) have been issued, whichever occurs earlier. CBG projects must be registered on the GOBARdhan portal, and only MSMEs will be eligible.</p>
<p>Lenders must pay an annual guarantee fee of 0.5% of the outstanding or disbursed loan amount. No collateral will be required for the portion of a loan covered by the government guarantee.</p>
<p><strong>CBG Ecosystem Challenge Fund</strong></p>
<p>The final component establishes a ₹5 billion (~$52.39 million) CBG Ecosystem Challenge Fund for FY 2026-27 to FY 2030-31. It will support domestic CBG equipment development, process and yield improvements, value addition of fermented organic manure and liquid fermented organic manure, feedstock infrastructure, and other gaps in the CBG ecosystem.</p>
<p>Under an annual District CBG Challenge Program, the top three districts will be eligible for awards of ₹50 million (~$523,855) each, while the remaining districts in the top ten will receive ₹20 million (~$209,542) each.</p>
<p>Last July, the Ministry of Petroleum and Natural Gas <a href="https://www.mercomindia.com/petroleum-ministry-amends-subsidy-terms-for-compressed-biogas-machinery" target="_blank" rel="noopener">amended</a> the disbursal pattern of financial assistance for CBG projects to procure biomass aggregation machinery.</p>


Government Issues Guidelines for GOBARdhan Program to Boost Biogas Sector


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					</table><p>The Union Cabinet has approved GOBARdhan, the National Circular Bioenergy program, with an outlay of ₹237.31 billion (~$2.5 billion) to expand compressed biogas production in India.</p>
<p>The program will run from the financial year (FY) 2026-27 through FY 2035-36 and will be administered by the <a href="https://mopng.gov.in/en" target="_blank" rel="noopener">Ministry of Petroleum and Natural Gas.</a></p>
<p>GOBARdhan will consolidate existing government support measures for compressed biogas into a national framework covering offtake, pricing, capital assistance, pipeline infrastructure, credit guarantees, and technology development.</p>
<p>The government expects the program to increase domestic compressed biogas production tenfold.</p>
<p>It also aims to attract private investment and support the use of agricultural residue, cattle dung, press mud, municipal organic waste, and other biomass resources as feedstock.</p>
<p>Compressed biogas is chemically equivalent to natural gas and can be supplied through existing gas infrastructure, according to the government. The fuel can be used in transport, households, industrial facilities, and commercial establishments.</p>
<p>The program builds on measures including the Sustainable Alternative Towards Affordable Transportation initiative, the Market Development Assistance program for organic manure, the Biomass Aggregation Machinery program, the Development of Pipeline Infrastructure program, and Central Financial Assistance for compressed biogas plants under the National Bioenergy Program.</p>
<p>The government said these initiatives have supported the commissioning of more than 200 compressed biogas plants.</p>
<p><strong>Six Components </strong></p>
<p>Under the first component, city gas distribution companies will procure compressed biogas to meet the notified blending obligation. The <a href="https://www.mercomindia.com/government-mandates-biogas-in-cng-and-png" target="_blank" rel="noopener">obligation</a> is set at 3% in FY 2026-27, 4% in FY 2027-28, and 5% from FY 2028-29 for compressed natural gas used in transport and piped natural gas supplied to households.</p>
<p>The second component introduces an administered compressed biogas price of ₹2,110 (~$22.20) per metric million British thermal units. The pricing framework will have a minimum term of 10 years and will combine government support with a market-based cost-sharing mechanism.</p>
<p>Under the third component, eligible greenfield projects will receive capital assistance of up to ₹20 million (~$210,400) per ton per day of installed compressed biogas capacity. Brownfield projects that expand production capacity will also qualify for assistance. The capital support will cover plant, machinery, and infrastructure for feedstock aggregation, organic manure processing, and value addition.</p>
<p>Under the fourth component, the program will support cluster-based and standalone pipelines connecting compressed biogas plants to trunk pipelines and city gas distribution networks.</p>
<p>The fifth component introduces a credit guarantee mechanism, which will support eligible micro, small, and medium enterprise projects by sharing part of the lending risk. The government said the mechanism is intended to improve access to institutional finance and reduce collateral requirements.</p>
<p>Under the sixth component, the program will also establish a Compressed Biogas Ecosystem Challenge Fund. The fund will support feedstock assessments, resource mapping, aggregation infrastructure, district-level planning, technology adoption, process improvements, organic manure value addition, capacity building, and stakeholder awareness.</p>
<p>Last July, the Ministry of Petroleum and Natural Gas <a href="https://www.mercomindia.com/petroleum-ministry-amends-subsidy-terms-for-compressed-biogas-machinery" target="_blank" rel="noopener">amended</a> the disbursal pattern of financial assistance for compressed biogas projects to procure biomass aggregation machinery. Compressed biogas projects that utilize more than 50% biomass as feedstock and have a 2-ton-per-day capacity are eligible for financial support of ₹9 million (~$94,639).</p>


Cabinet Approves ₹237 Billion National Compressed Biogas Program


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					</table><p>The <a href="https://mopng.gov.in/en" target="_blank" rel="noopener">Ministry of Petroleum and Natural Gas</a> has amended the disbursal pattern of financial assistance for compressed biogas (CBG) projects to procure biomass aggregation machinery.</p>
<p>According to the amendments, CBG plants utilizing more than 50% biomass as feedstock for a 2 tons per day (TPD) capacity project are eligible for a financial support of ₹9 million (~$104,970).</p>
<p>All existing and upcoming CBG projects must use at least 50% or a minimum of 3,000 MT of biomass as feedstock annually to avail of the subsidy.</p>
<p>CBG plants utilizing less than 50% biomass as feedstock, but more than 3,000 MT of biomass annually, can receive financial support of ₹9 million (~$104,970) per 3,000 MT of agri-residue requirement.</p>
<p>The Ministry provides financial assistance for a maximum of 50% of the procurement cost of a biomass aggregation machine, up to ₹9 million (~$104,970) per project, whichever is lesser.</p>
<p>The CBG project must have installed or proposed CBG production capacity of at least 2 TPD.</p>
<p>To be eligible for a subsidy, the CBG projects under construction must have achieved at least 25% of their progression. However, at least 50% of the project must be completed before financial assistance is disbursed.</p>
<p>The CBG projects must not have availed of any financial assistance under any other government or state program.</p>
<p>The amendments also state that when applying for financial assistance, CBG producers must specify whether the machinery or equipment is proportional to the collected biomass. They must also list the available machinery and equipment.</p>
<p>After the application for financial assistance is approved, CBG producers can avail of 10% of the financial assistance as a mobilization advance, provided an equivalent bank guarantee is provided. The bank guarantee must be valid for a year. However, the financial aid will be extended per the project management agency’s requirements.</p>
<p>The bank guarantee will be forfeited if the project developers fail to comply with the program guidelines during the project’s execution.</p>
<p>CBG producers can apply for the financial assistance release in a phased manner within two years of receiving approval for their aid application.</p>
<p>Recently, the Ministry of New and Renewable Energy <a href="https://www.mercomindia.com/mnre-introduces-iot-based-monitoring-of-data-under-biomass-energy-program" target="_blank" rel="noopener">revised</a> the guidelines for the National Biomass Program for the financial years 2022 to 2027 (Phase-I). These amendments aim to promote cleaner energy solutions, ease of doing business, and accelerate the adoption of biomass technologies across India.</p>
<p>Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.</p>


Petroleum Ministry Amends Subsidy Terms for Compressed Biogas Machinery

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