SYLLABUS

GS-3: Infrastructure: Energy.

Context: The Union Cabinet has approved the National Circular Bioenergy Scheme – GOBARdhan with a total outlay of ₹23,731 crore to catalyse the growth of Compressed Biogas (CBG) and establish it as a major pillar of India’s future energy mix.

About the National Circular Bioenergy Scheme – GOBARdhan 

• The Scheme will be implemented from FY 2026–27 to FY 2035–36. 

• It is administered by the Ministry of Petroleum and Natural Gas. 

• Objective: It aims to increase domestic Compressed Biogas (CBG) production nearly ten-fold, mobilize large-scale private investment and create a vibrant circular bioeconomy across the country. 

• It seeks to provide a strong and predictable framework through assured demand, remunerative and stable pricing, capital assistance, pipeline infrastructure, credit support and technology development. 

• The Scheme converts Agricultural residue, Cattle dung, Press mud, Municipal organic waste and other biomass into clean fuel, Organic manure, Rural income and National economic value. 

• The Scheme builds on:

• Sustainable Alternative Towards Affordable Transportation (SATAT) 
• Market Development Assistance (MDA) Scheme 
• Biomass Aggregation Machinery (BAM) Scheme 
• Development of Pipeline Infrastructure (DPI) Scheme 
• Central Financial Assistance (CFA) under the National Bioenergy Programme which have enabled over 200 CBG plants across the country.

Six Components of GOBARdhan

• Assured CBG Offtake: The Scheme establishes a dedicated CBG Offtake Assurance framework to provide a reliable and predictable market for producers. 

• Procurement by City Gas Distribution (CGD) entities will support achievement of the notified CBG Obligation of 3% in FY 2026–27, 4% in FY 2027–28 and 5% from FY 2028–29 onwards in the CNG (Transport) and PNG (Domestic) segments.

• Stable Pricing Framework: The Scheme introduces a stable administered CBG price of ₹2,110 per Metric Million British Thermal Unit (MMBTU) under a minimum 10-year pricing framework. 

• It provides long-term revenue visibility while protecting consumer affordability.

• Capital Assistance: Eligible greenfield CBG projects will receive capital assistance of up to ₹2 crore per tonne per day (TPD) of installed CBG capacity, while brownfield expansion projects will also be eligible. 

• The support extends beyond core plant machinery to feedstock aggregation and organic manure processing.

• Development of Pipeline Infrastructure: Supports cluster-based and standalone pipeline infrastructure connecting CBG plants with trunk pipelines and City Gas Distribution networks.

• Credit Guarantee Support: A dedicated Credit Guarantee mechanism will expand institutional credit to eligible MSME-based CBG projects by improving access to affordable finance and reducing collateral requirements.

• CBG Ecosystem Challenge Fund: Supports feedstock resource assessment and mapping, feedstock aggregation infrastructure, district-level CBG development planning, technology adoption, organic manure value addition, capacity building and stakeholder awareness.

Impact of the Scheme

• Increase domestic CBG production nearly ten-fold and achieve a target of 5 million Metric Standard Cubic Metres per Day (MMSCMD). 

• Reduce dependence on imported fossil fuels, resulting in foreign exchange savings of over ₹40,000 crore.

• Mobilise large-scale private investment, creating an estimated ₹75,000 crore CBG industry through assured offtake, stable pricing, capital assistance, pipeline connectivity and credit support. 

• Generate around 1.5 lakh jobs and create additional income opportunities for farmers, feedstock aggregators, cooperatives, MSMEs and rural entrepreneurs. 

• Improve scientific utilisation of agricultural residue, cattle dung, press mud and municipal organic waste, expand the organic manure economy (FOM and LFOM), and reduce greenhouse gas emissions.

Need and Significance of the Scheme

• Addresses Key Bottlenecks in the CBG Sector: Addresses long-standing challenges such as uncertain offtake, pricing volatility, financing constraints, inadequate pipeline connectivity and fragmented feedstock aggregation, thereby improving the viability of CBG projects.

• Strengthens Energy Security: Promotes domestic production of renewable Compressed Biogas (CBG) to reduce dependence on imported natural gas and strengthen India's long-term energy security.

• Promotes Circular Bioeconomy and Scientific Waste Management: Converts agricultural residue, cattle dung, press mud, municipal organic waste and other biomass into clean fuel and organic manure, promoting a circular bioeconomy and scientific waste management.

• Enhances Rural Economy and Sustainable Agriculture: Creates opportunities for farmers, MSMEs, cooperatives and rural entrepreneurs, while promoting organic manure production to improve soil health and support sustainable agriculture.

• Supports National Development Goals: Advances the objectives of Atmanirbhar Bharat, Viksit Bharat, clean energy transition and climate commitments through a nationally integrated CBG ecosystem.