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The Union Cabinet has approved GOBARdhan (National Circular Bioenergy Scheme) with a total outlay of ₹23,731 crore

ICICIdirect Research 07 Aug 2026 DISCLAIMER

News: The Union Cabinet has approved GOBARdhan (National Circular Bioenergy Scheme) with a total outlay of ₹23,731 crore for FY27–FY36 to accelerate India's Compressed Biogas (CBG) ecosystem. The scheme aims to increase domestic CBG production nearly 10-fold, supported by assured offtake, stable pricing, capital assistance, pipeline connectivity, credit support and ecosystem development. Key incentives include a government-backed administered CBG price of ₹2,110/MMBTU (10-year framework), capital assistance of up to ₹2 crore per TPD of installed CBG capacity, and a dedicated credit guarantee for MSMEs. City Gas Distribution companies will be required to procure CBG under blending obligations of 3% in FY27, 4% in FY28 and 5% from FY29 onwards. The scheme builds on the existing base of 200+ operational CBG plants and is expected to boost private investment, strengthen rural incomes, improve waste management and reduce dependence on imported fossil fuels

View: The GOBARdhan scheme is a structural positive for India's CBG ecosystem as it addresses the two biggest bottlenecks—demand certainty (mandatory CBG blending of 3% in FY27, 4% in FY28 and 5% from FY29) and project viability through ₹2,110/MMBTU administered pricing (10-year framework) and capital assistance of up to ₹2 crore per TPD. This should accelerate fresh CBG capacity addition, improve project financing and drive private sector investment. Among listed companies, Thermax, Va Tech Wabag, Praj industries and Kirloskar pneumatic as (a equipment provider) are the key beneficiaries given their strong CBG technology and engineering capabilities.

Impact: Positive

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