Cabinet approves Rs 23,731 crore GOBARdhan scheme to boost clean bioenergy

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New Delhi, August 6

Union Cabinet meeting chaired by Prime Minister Narendra Modi, has approved the GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) National Circular Bioenergy Scheme with an outlay of ₹23,731 crore, aiming to turn agricultural and organic waste into clean energy while creating new income opportunities for farmers and rural communities.

The scheme, to be implemented from 2026-27 to 2035-36, seeks to make Compressed Biogas (CBG) a key component of India’s energy mix by converting cattle dung, crop residue, municipal organic waste, press mud and other biomass into renewable fuel and organic manure.
Officials said the programme is designed to increase domestic CBG production nearly ten-fold through a combination of assured demand, stable pricing, capital assistance, improved pipeline connectivity, easier access to credit and support for technology development.

The Ministry of Petroleum and Natural Gas will oversee the scheme and bring together multiple existing initiatives under single national framework to accelerate project implementation and improve investor confidence.

The government said GOBARdhan builds on the progress made through initiatives such as SATAT, the Market Development Assistance scheme, the Biomass Aggregation Machinery scheme and financial support for bioenergy projects. More than 200 CBG plants have already been commissioned across the country.

Under the new policy, City Gas Distribution companies will procure CBG to meet the government’s blending targets of 3% in 2026-27, 4% in 2027-28 and 5% from 2028-29 for transport and domestic gas supplies.

To encourage investment, the scheme introduces an administered CBG price of ₹2,110 per MMBTU with a long-term pricing framework aimed at giving producers greater revenue certainty. Eligible greenfield projects will also receive capital assistance of up to ₹2 crore per tonne per day of installed production capacity, while expanding brownfield plants will also qualify for support.

The package includes funding for pipeline infrastructure to connect plants with gas networks, a dedicated credit guarantee mechanism for MSMEs and a Challenge Fund to support district-level planning, feedstock aggregation, technology adoption and capacity building.

The government believes the scheme will strengthen India’s energy security by reducing dependence on imported fossil fuels, improve waste management, lower greenhouse gas emissions and create new economic opportunities for farmers, cooperatives, rural entrepreneurs and the organic manure sector.

Describing the initiative as a major step towards a circular bioeconomy, the government said the programme aims to transform India’s organic waste into a valuable resource, supporting clean energy production, rural prosperity and the country’s long-term energy transition.