What is GOBARdhan scheme?

• The Union Cabinet approved GOBARdhan, the national circular bioenergy scheme, with a total outlay of Rs 23,731 crore.

• The scheme will be implemented from FY 2026-27 to FY 2035-36 and will establish Compressed Biogas (CBG) as a major pillar of India’s future energy mix.

Revamped scheme

• Galvanizing Organic Bio-Agro Resources Dhan (GOBARdhan) was originally launched under the Swachh Bharat Mission (Grameen) in 2018.

• It was an integral component of Solid and Liquid Waste Management (SWM), converting bio-waste — animal waste, kitchen leftovers, crop residue and market waste, into biogas and bio-slurry, thereby ensuring cleanliness in villages and improving rural lives.

• Earlier, the Compressed Biogas (CBG) ecosystem was spread across four different ministries. 

• To ensure better coordination and accelerate the sector’s growth, the government has consolidated the entire scheme under the Ministry of Petroleum and Natural Gas. 

• This reform enables a unified approach to policy, implementation and sectoral development.

Significance of the scheme

• India currently meets nearly 50 per cent of its natural gas requirement through imports, making energy security a strategic priority. 

• Recent geopolitical developments and disruptions along the Strait of Hormuz, a route that carries nearly 55 to 60 per cent of India’s Liquefied Natural Gas (LNG) imports, have underscored the importance of strengthening domestic energy production. 

• India’s demand for natural gas is expanding across transport, households, industry and commercial sectors. 

• Compressed Biogas (CBG) can meet a growing share of this demand through domestic renewable production. 

• It will further strengthen energy resilience and reduce dependence on imported fossil fuels. 

• Reduced energy import dependence will save over Rs 40,000 crore in foreign exchange.

• CBG is chemically equivalent to natural gas and can be seamlessly integrated into the existing gas ecosystem, combining the benefits of a renewable fuel with the reach and utility of India's expanding gas infrastructure.

• Each CBG plant also creates a local circular economy around agricultural residue, cattle dung and other organic resources, generating opportunities in feedstock supply, transportation, plant operations and organic manure production, while supporting cleaner waste management and lower greenhouse gas emissions.

Highlights of GOBARdhan scheme:

1) Assured CBG Offtake: GOBARdhan establishes a dedicated CBG Offtake Assurance framework to provide a reliable and predictable market for producers. Procurement by City Gas Distribution entities will support achievement of the notified CBG Obligation trajectory of 3 per cent in FY 2026-27, 4 per cent in FY 2027-28 and 5 per cent from FY 2028-29 onwards in the CNG (transport) and PNG (domestic) segments.

2) Stable CBG Pricing Framework: GOBARdhan introduces a stable administered CBG price of Rs 2,110 per Metric Million British Thermal Unit (MMBTU), supported through a government-backed pricing framework. The framework provides long-term revenue visibility while protecting consumer affordability through a combination of government support and a market-based cost-sharing mechanism.

3) Capital Assistance: Eligible greenfield CBG projects will receive capital assistance of up to Rs 2 crore per tonne per day (TPD) of installed CBG capacity. It will lower the initial capital burden, accelerate financial closure and expand participation by private developers, MSMEs, cooperatives and rural entrepreneurs.

4) Development of Pipeline Infrastructure: The scheme supports both cluster-based and standalone pipeline infrastructure connecting CBG plants with trunk pipelines and City Gas Distribution networks. Greater pipeline connectivity will reduce evacuation costs, improve reliability, expand market reach and enable higher utilization of domestically produced CBG.

5) Credit Guarantee Support: A dedicated credit guarantee mechanism will strengthen lender confidence and expand the flow of institutional credit to eligible MSME-based CBG projects. This will widen participation by MSMEs, women entrepreneurs and first-time developers, helping build a broad, competitive and entrepreneurial CBG industry.

6) CBG Ecosystem Challenge Fund: GOBARdhan establishes a dedicated CBG Ecosystem Challenge Fund to accelerate district-level implementation and strengthen local value chains across the CBG ecosystem.         

Expected outcomes of GOBARdhan scheme:

i) Nearly ten-fold growth in domestic CBG production, creating a new pillar of India’s clean gas economy.

ii) Greater energy security through increased domestic production of renewable gaseous fuel and lower dependence on imported fossil fuels.

iii) A new wave of private investment supported by stronger project viability, stable pricing and improved access to institutional finance.

iv) Stronger rural livelihoods through new income opportunities for farmers, feedstock aggregators, cooperatives and rural entrepreneurs. Over 1.5 lakh jobs will be generated across the value chain.

v) Scientific waste management through productive use of agricultural residue, cattle dung, municipal organic waste and other biomass resources.

vi) Lower greenhouse gas emissions through replacement of fossil fuels and productive utilisation of organic waste.

vii) A larger organic manure economy through greater production, value addition and utilisation of Fermented Organic Manure (FOM) and Liquid Fermented Organic Manure (LFOM).

viii) Faster and easier project implementation through one national framework, digital governance and simplified institutional arrangements.

Other schemes related to biogas:

i) Sustainable Alternative Towards Affordable Transportation (SATAT) scheme encourages entrepreneurs to set up CBG plants, produce & supply CBG to Oil Marketing Companies (OMCs) for sale as automotive and industrial fuels.

ii) The Ministry of Petroleum and Natural Gas (MoPNG) is implementing the Biomass Aggregation Machinery (BAM) scheme to support CBG producers in procuring biomass aggregation equipment. 

iii) To strengthen CBG evacuation and market access, MoPNG is also implementing the Development of Pipeline Infrastructure (DPI) scheme with a total outlay of Rs 994.5 crore for the period FY 2024-25 to FY 2028-29. 

iv) The Department of Fertilizers was implementing Market Development Assistance (MDA) scheme to promote organic fertilizers produced from GOBARdhan and CBG plants by providing Rs 1,500 per metric tonne for Fermented Organic Manure, Liquid Fermented Organic Manure and Phosphate Rich Organic Manure.

• Together, these initiatives have enabled the commissioning of over 200 CBG plants, established production and offtake systems, strengthened the organic manure value chain and demonstrated the potential of CBG across feedstocks and geographies.

(The author is a trainer for Civil Services aspirants.)