India’s Compressed Biogas Industry Eyes ₹5,000 Crore Investment In 2026–27

India’s biogas industry is heading towards a major expansion phase, with investments likely to surpass ₹5,000 crore in the financial year 2026–27, according to estimates shared by the Indian Biogas Association (IBA).

The outlook reflects increasing demand for gas-based fuels and a growing focus on renewable energy solutions.

Based on official figures referenced by the association, 94 compressed biogas plants collectively sold more than 31,400 tonnes of CBG during FY 2024–25. This uptake highlights the sector’s steady growth and rising acceptance in the domestic energy market.

Looking ahead, the IBA expects a sharp rise in the commissioning of new CBG plants, supported by streamlined feedstock supply systems and more cohesive policy frameworks.

These developments are likely to ease implementation challenges and encourage faster adoption of biogas technologies nationwide.

The association also pointed to significant opportunities to enhance efficiency and capacity usage among the country’s millions of small, traditional biogas digesters.

At the same time, government-backed programmes are scaling up assistance for medium-sized plants that offer cleaner cooking solutions, generate rural employment and produce organic manure.

“The relaxed GST regime is going to augur ease of doing business in the CBG ecosystem. We anticipate that a reduction of 7 per cent in the applicable GST rate for the CBG sector shall significantly improve project viability, and the direct impact would translate into a 45 per cent increase in new investments in the industry over the short to medium term,” IBA Chairman Gaurav Kedia said.

He further added, “Indirectly across the industry value chain, the multiplier effect would be much larger.”

What Is Compressed Biogas?

Compressed biogas is a clean and renewable fuel obtained by processing biogas generated from organic waste such as agricultural residue, animal waste and sewage.

With properties similar to compressed natural gas, CBG plays a crucial role in reducing dependence on imported fossil fuels, lowering emissions and strengthening rural economies.

National initiatives, including the SATAT scheme, continue to promote the production and utilisation of CBG as a sustainable fuel option for transport, industrial use and household cooking.

To encourage investment, the Ministry of New and Renewable Energy currently provides central financial assistance covering 15 to 20 per cent of a project’s capital expenditure.

Additional marketing support of ₹1.50 per kilogram is offered to promote organic fertilisers, a key byproduct of biogas plants.

Financial incentives are also available for pipeline infrastructure linking plants to the gas grid.

Taken together, these policy measures will likely create a supportive investment environment, enabling the biogas sector to emerge as a critical component of India’s clean energy transition and long-term sustainable growth.

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