Government Subsidyfor CBG Plant

BIO CNG digestor

Government Subsidy for Compressed Biogas (CBG) Plant in India – 2026

The Government of India provides financial assistance, incentives, loans and market-support mechanisms for setting up Compressed Biogas (CBG) plants using agricultural waste, Napier grass, press mud, cattle dung, municipal organic waste and other biodegradable feedstocks.

For a proposed CBG plant in Maharashtra, the main schemes and agencies to investigate are:

  1. Ministry of New and Renewable Energy (MNRE) – Waste-to-Energy programme.

  2. Ministry of Petroleum and Natural Gas (MoPNG) – SATAT initiative and CBG ecosystem.

  3. Department of Fertilizers – Market support for Fermented Organic Manure (FOM).

  4. Agriculture Infrastructure Fund (AIF) – Eligible infrastructure financing.

  5. Maharashtra Government – State industrial, renewable energy and bioenergy incentives, subject to eligibility.

1. Major subsidy: GOBARdhan National Scheme 2026

Major central government support

Ministry of Petroleum & Natural Gas | FY 2026–27 to FY 2035–36

The new GOBARdhan National Circular Bioenergy Scheme was approved on 6 August 2026 with a total outlay of ₹23,731 crore and formally launched on 1 October 2026.

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Key financial benefits

Component Government support
Capital assistance for eligible greenfield CBG plants Up to ₹2 crore per TPD
Pipeline – CBG cluster to trunk pipeline Up to 80% eligible project cost
Pipeline – standalone plant to CGD network Up to 50% eligible project cost
MSME credit guarantee Up to 85% eligible outstanding loan
Credit guarantee cap – general MSME ₹20 crore/project
Credit guarantee cap – women-led MSME ₹25 crore/project

These are scheme ceilings, not automatic entitlements. Actual assistance depends on eligibility, approved costs, scheme conditions and sanction.

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Example: Potential capital assistance

CBG plant capacity Maximum indicated capital assistance
1 TPD ₹2 crore
2 TPD ₹4 crore
3 TPD ₹6 crore
5 TPD ₹10 crore
10 TPD ₹20 crore

Illustrative calculation using the announced ₹2 crore/TPD ceiling. Do not treat these amounts as sanctioned subsidy.

2. Other government incentives

Scheme Financial benefit Application / implementing agency
Biomass Aggregation Machinery (BAM) Financial assistance for biomass collection and aggregation equipment MoPNG
Development of Pipeline Infrastructure (DPI) Pipeline infrastructure assistance MoPNG
Market Development Assistance (MDA) ₹1,500/MT for eligible FOM, LFOM and PROM Department of Fertilizers
SATAT CBG purchase and market-development framework Oil marketing companies
MSME credit guarantee Reduced lending risk for eligible projects GOBARdhan credit guarantee mechanism

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Important: The ₹1,500/MT MDA is support for eligible organic manure products, not a direct capital subsidy for constructing the CBG plant.

3. Maharashtra Government subsidy – CBG Policy 2026

State-level policy approved

Maharashtra approved a CBG Policy in April 2026 with a reported budget outlay of ₹500 crore for 2026–27.

The policy includes:

  • Government land on lease for eligible projects.

  • Single-window clearance mechanism.

  • Linkage between urban waste suppliers and CBG developers.

  • Support for agricultural residue and cattle waste utilization.

  • Public-private partnership opportunities.

  • Assured payment arrangements for eligible urban waste projects.

An important qualification: the reported policy model includes large plants processing at least 200 tonnes/day of waste. This should not be confused with a general capital subsidy available to every small CBG plant