Cabinet Approves GOBARdhan Scheme: India’s ₹23,731 Crore Push for Compressed Biogas and Circular Bioenergy

The Cabinet of the Union Government, headed by Prime Minister Narendra Modi, has approved the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) – National Circular Bioenergy Scheme, with an allocation of ₹23,731 crore. This scheme was announced on 6th of August 2026 with an objective to convert the agricultural residue, cattle dung, urban organic waste, press mud, and biomass of other nature into Compressed Biogas (CBG), organic manure, and rural incomes. It is anticipated that the scheme, which will be implemented from FY 2026-27 to FY 2035-36, will go a long way in enhancing India’s clean energy infrastructure and reducing India’s dependence on imports of fossil fuel-based energy.

What is the GOBARdhan Scheme?

The GOBARdhan Scheme is India’s comprehensive national plan to boost the generation and consumption of Compressed Biogas (CBG) through a circular bioeconomy model.

The scheme aims at converting organic waste into valuable sources of energy through an ecosystem that supports CBG generation, transportation, finance, and market. Managed by the Ministry of Petroleum and Natural Gas, the scheme encompasses several existing bioenergy schemes to hasten India’s shift towards renewable gaseous fuels.

The vision behind the GOBARdhan Scheme is simple and revolutionary,

• Waste to wealth
• Boosts farmers income
• Improves India’s energy security
• Fosters sustainable rural development.

Objectives of the GOBARdhan Scheme

The following are the strategic objectives of this scheme,

• Increase domestic production of CBG nearly ten times.
• Decrease reliance on imports of natural gas and other fossil fuels.
• Scientific management of agriculture and municipal solid waste.
• Private sector involvement in the bio-energy industry.
• Creation of jobs in rural areas.
• Achieve India’s climate targets by decreasing greenhouse gases emissions.
• Enhance the circular economy through utilization of biomass.

Through creation of a stable policy regime, the government will ensure that CBG becomes a significant part of the country’s energy mix in the coming future.

Six Major Components of the GOBARdhan Scheme

1. Assured CBG Offtake

The government will create a procurement system to guarantee a ready market for CBG producers.

CBG will be purchased by CGD operators to fulfill the blending targets as per notifications,

• 3% in FY 2026-27
• 4% in FY 2027-28
• 5% from FY 2028-29 onwards

Guaranteed offtake of CBG will enhance the project viability and will attract investment.

2. Stable Pricing System

In order to give a stable return to the investors, a price cap of ₹2,110 has been set per Metric Million British Thermal Unit (MMBTU).

This pricing structure provides the following benefits,

• Stable long-term returns.
• Investor confidence.
• Predictable project revenues.
• Affordable price for customers.

The pricing structure will be valid for at least ten years.

3. Financing of Capital

Financial assistance is provided for setting up of new CBG units.

Financial support available shall include Up to ₹2 crore per TPD capacity of installed CBG unit.

Financial support includes,

• Aggregation of feedstocks.
• Processing of organic manures.
• Value addition infrastructure.

Expansion projects are also eligible for financial support under the scheme.

4. Development of Pipeline Infrastructure

In order to enhance market connectivity, the GOBARdhan scheme provides funding for development of pipeline infrastructure connecting CBG plants with,

• Trunk gas pipelines.
• City Gas Distribution (CGD) Networks.

Market connectivity shall help reduce transportation costs, improved utilization of plants and distribution of domestically produced biogas.

5. Credit Guarantee Scheme

Credit Guarantee scheme has been launched especially for MSMEs undertaking CBG projects.

The scheme seeks to,

• Enhance access to institutional financing.
• Reduce collateral requirement.
• Encourage financial institutions to lend.
• Provide finance to women entrepreneurs and first timers.

6. CBG Ecosystem Challenge Fund

Under this scheme, a special Challenge Fund shall be established for district level implementation.

The Challenge Fund shall provide support in,

• Mapping of feedstock resources.
• Infrastructure for aggregation of biomass.
• Adoption of technology.
• Capacity Building.
• Value addition of organic manure.
• Stakeholder awareness programs.

GOBARdhan Scheme as an Extension of Other Government Schemes

The GOBARdhan Scheme is an extension of many other schemes which form the bedrock of the CBG industry in India such as,

• SATAT (Sustainable Alternative Towards Affordable Transportation) scheme.
• MDA (Market Development Assistance) Scheme for Organic Manure.
• Biomass Aggregation Machinery (BAM) Scheme.
• Development of Pipeline Infrastructure (DPI) Scheme.
• National Bioenergy Programme – CFA (Central Financial Assistance).

These schemes have already resulted in the setting up of more than 200 CBG plants across the country.

Impact of the Scheme Expected by the Government

As per the government, GOBARdhan Scheme will help to create multiple economic, environmental and social advantages.

Energy Security

• Ten times higher production of CBG in India.
• Dependence on natural gas imports would come down.

Rural Prosperity

• Revenue for farmers through biomass supply.
• Creation of employment for entrepreneurs and cooperatives in rural areas and MSMEs.

Environmental Benefits

• Management of agricultural residue and organic waste in scientific manner.
• Low carbon footprint.
• Reduction in stubble burning and waste dumping.

Circular Economy

• Increase in organic manure production.
• Better utilization of biomass resources.
• Encouragement of sustainable agriculture.

Investment

• Viability of projects.
• Increased participation from the private sector.
• Availability of credit due to pricing stability.