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:
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Ministry of New and Renewable Energy (MNRE) – Waste-to-Energy programme.
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Ministry of Petroleum and Natural Gas (MoPNG) – SATAT initiative and CBG ecosystem.
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Department of Fertilizers – Market support for Fermented Organic Manure (FOM).
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Agriculture Infrastructure Fund (AIF) – Eligible infrastructure financing.
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Maharashtra Government – State industrial, renewable energy and bioenergy incentives, subject to eligibility.
1. Major subsidy: GOBARdhan National Scheme 2026
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
Maharashtra approved a CBG Policy in April 2026 with a reported budget outlay of ₹500 crore for 2026–27.
The policy includes:
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Government land on lease for eligible projects.
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Single-window clearance mechanism.
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Linkage between urban waste suppliers and CBG developers.
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Support for agricultural residue and cattle waste utilization.
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Public-private partnership opportunities.
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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
