Business EconomyPosted at: Sep 20 2026 12:22AM


Centre operationalises Rs 23,731-crore GOBARdhan scheme; offers assured CBG offtake, capital and pipeline support

New Delhi, Sep 19 (UNI) The Centre has issued detailed operational guidelines for its Rs 23,731-crore GOBARdhan scheme, laying down mechanisms for assured purchase of compressed biogas (CBG), administered pricing, capital assistance, pipeline connectivity and credit guarantees in a major push to expand India's waste-to-energy sector.
The National Circular Bioenergy Scheme, approved by the union Cabinet on August 6, will run from 2026-27 to 2035-36 and seeks to increase domestic CBG production nearly ten-fold.
The scheme has six components — CBG Offtake Assurance Mechanism, CBG Pricing Framework, Capital Assistance, Development of Pipeline Infrastructure, Credit Guarantee Support and CBG Ecosystem Challenge Fund.
The Rs 23,731-crore outlay and implementation period are also confirmed in the government's Cabinet announcement.
Under the newly detailed offtake mechanism, eligible CBG producers can seek assured offtake of up to 100 per cent of the CBG available for sale, at the producer's option and subject to technical and operational feasibility.
This can be facilitated by mapping CBG plants to City Gas Distribution (CGD) entities or geographical areas, or by aggregating plants into CBG clusters for injection into trunk pipelines.
The framework also requires CGD entities to procure and sell CBG in line with the government's CBG obligation trajectory. The obligation has been fixed at 3 per cent in 2026-27 and 4 per cent in 2027-28.
The government's original scheme announcement provides for this to rise to 5 per cent from 2028-29 onwards in the CNG transport and PNG domestic segments.
Firm offtake through the CGD route will be governed by a tripartite agreement among the CBG producer, the concerned CGD entity and the designated Synchro Operator.
A separate route has been provided for firm offtake through trunk pipelines.
Under the pricing component, the Administered CBG Price (ACP) has initially been fixed at Rs 2,110 per MMBTU, which the new operational guidelines calculate as approximately Rs 98 per kg at 95 percent methane content, excluding applicable taxes and compression charges.
The price may remain unchanged or be revised annually, or whenever considered necessary, on the basis of factors such as CBG production economics and the Consumer Price Index.
The administered pricing mechanism will remain in place for a minimum of 10 years, up to March 31, 2036, unless the Petroleum Ministry decides otherwise.
The guidelines also provide for government-funded CBG affordability support capped at Rs 10 per kg, equivalent to Rs 215.31 per MMBTU. This support will be available for 10 years from 2026-27 to 2035-36.
The August Cabinet announcement had described the Rs 2,110-per-MMBTU administered price without using the revised Rs 98-per-kg conversion appearing in the subsequent operational guidelines.
The operational guidelines provide capital assistance for setting up CBG plants and for purchasing eligible feedstock aggregation and organic-manure value-addition machinery.
The maximum aggregate capital assistance across the two sub-components has been capped at Rs 30 crore per CBG project.
For establishment of an eligible CBG plant, assistance will be linked to installed capacity at Rs 1.25 crore per tonne per day (TPD). For an existing biogas plant upgraded to produce CBG, assistance will be available at Rs 60 lakh per TPD of eligible CBG capacity, subject to a maximum of Rs 5 crore per project.
Capital assistance will be released in three tranches linked to milestones, including regulatory approval, the first sale of CBG and plant performance.
For eligible feedstock aggregation and organic-manure value-addition machinery, assistance will be limited to 50 per cent of the actual eligible procurement cost, subject to a ceiling of Rs 75 lakh per TPD of eligible CBG plant capacity.
The scheme also seeks to tackle one of the major constraints faced by CBG projects — connecting plants to gas distribution networks and trunk pipelines.
For CGD network connectivity, an eligible CBG plant will generally be required to have installed production capacity of at least 2 TPD, with preference to projects above 5 TPD. Cluster-based pipeline connectivity has also been provided for groups of CBG plants.
Financial assistance will be provided for pipeline lengths of up to 75 km. For determining assistance, the cost of laying pipelines has been assumed at Rs 1 crore per km for steel pipelines and Rs 15 lakh per km for MDPE pipelines.
The assistance will be 50 per cent of the eligible project cost, subject to a ceiling of Rs 50 lakh per km for steel pipelines and Rs 7.5 lakh per km for MDPE pipelines.
A separate Credit Guarantee Fund has been provided to improve access to term loans for CBG projects, particularly those developed by micro, small and medium enterprises.
The fund will be managed by the National Credit Guarantee Trustee Company Ltd (NCGTC), with the Ministry of Petroleum and Natural Gas as the settlor. The credit guarantee component carries a total outlay of Rs 625 crore, while loans can have a tenure of up to 15 years, including an 18-month moratorium from the date of first disbursement.
The credit guarantee scheme will remain operational until December 31, 2030, or until cumulative loans of Rs 15,000 crore are issued, whichever is earlier.
Projects seeking the guarantee must be registered on the GOBARdhan portal and possess a valid Plant Identification Number. The guidelines also prescribe tighter technology-based monitoring of projects receiving benefits.
UNI KK RN
Tags: #Centre operationalises Rs 23#731-crore GOBARdhan scheme; offers assured CBG offtake# capital and pipeline support
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