IBA demands Rs 10,000 crore budgetary support for biogas sector

Gurugram headquartered Indian Biogas Association (IBA) has urged the Modi Government to strengthen financial support for the compressed biogas (CBG) sector in the upcoming Union Budget by proposing the creation of a dedicated Rs 10,000 crore fund. IBA also demanded a substantial increase in capital subsidies.

IBA has recommended raising the capital subsidy by 50 per cent to Rs 6 crore per 4.8 tonnes per day (TPD) of CBG capacity, while also enhancing the subsidy ceiling to Rs 25 crore per project.

In an official statement, IBA said its recommendations would be submitted to the Ministry of New and Renewable Energy (MNRE) and the Ministry of Finance. The association has been advocating these measures across multiple platforms ahead of the Budget, positioning the biogas sector as a rapidly maturing component of India’s clean energy and circular economy strategy.

IBA highlighted that capital costs for CBG projects have increased by more than 50 per cent since the Central Financial Assistance (CFA) scheme was introduced in 2014. Under the current framework, projects receive ₹4 crore per 4.8 TPD with a cap of Rs 10 crore per plant. The proposed revision, the association said, would help make larger projects—up to 20 TPD—financially viable and accelerate capacity addition.

Previously, IBA had called for policy support to boost the use of fermented organic manure (FOM), a key by-product of biogas plants. It recommended making FOM blending mandatory in fertiliser use, starting with 5 per cent by 2028 and increasing to 10 per cent by 2030.

The association suggested that a small share of the government’s annual Rs 2 lakh crore chemical fertiliser subsidy could be redirected toward FOM-linked or carbon-based incentives to improve soil health, reduce fertiliser imports, and support climate-resilient agriculture.

The association also flagged the limited funding for organic manure support, noting that the Rs 1,450 crore allocated over three years under the Market Development Assistance scheme is inadequate. IBA estimated the potential value of CBG-based green certificates at around Rs 4,000 crore by 2030 and recommended exploring cap-and-trade systems to operationalise the market.