Indian Biogas Association urges policy support to boost CBG adoption, soil health, and financing for renewable energy projects
The Indian Biogas Association (IBA) is actively working on budget recommendations to accelerate the growth of the compressed biogas (CBG) sector and strengthen India’s renewable energy transition. According to Abhijeet Mukherjee, Director at IBA, the industry has already benefited from several government incentives, but more needs to be done to unlock its full potential.
Mukherjee highlighted that the Ministry of New and Renewable Energy (MNRE) currently provides central financial assistance covering 15–20% of a project’s capital cost. Additionally, Marketing Development Assistance (MDA) of ₹1.50 per kilogram is offered to promote the offtake of organic fertilisers, a key byproduct of biogas plants. There are also incentives for pipeline laying to connect plants to the gas grid.
However, IBA is pushing for additional measures, including a quota system that would require fertiliser marketing companies to sell a certain proportion of organic fertilisers alongside synthetic ones. “The organic carbon content in Indian soil has fallen to alarming levels—ideally it should be 1.5%, but in most areas, it is below 0.5%. Replenishment can only happen through organic manure or compost,” Mukherjee said. He stressed that improving soil health is as critical as meeting energy targets.
The association has also recommended increasing the MDA from ₹1.50 per kg to ₹3 per kg. A revision to ₹2.50 per kg is already under consideration and could be announced in the next two to three months. “While ministries have their limitations, we continue to push for higher budgetary allocations for this sector,” Mukherjee added.
On financing, Mukherjee noted that banks, once reluctant, now have dedicated loan policies for CBG projects. “Each bank has carved out specific guidelines for lending to this sector. Things are looking positive, but it may take another two to three years for non-organized players and startups to enter in a big way. Initially, established players will set up the ecosystem, and then smaller entrepreneurs will follow,” he said.
Despite challenges, the outlook for the biogas industry remains bright. “Continuous efforts and policy support will ensure the sector achieves its full potential,” Mukherjee concluded.
