INDIA’S tryst with JAPAN in next phase of CBG revolution!

As the Compressed Biogas (CBG) industry India takes strides with the new Gobardhan Scheme, there is a new but powerful entrant that can prove to be gamechanger in near future – Japan. The launch of the India-Japan Cooperative Biogas for Growth Initiative (CBG Initiative) by the Prime Ministers of the two countries last July marks a fresh chapter in bilateral cooperation.

The initiative aims to support India’s ambition of establishing 1,000 biogas and organic fertiliser plants across the country, complementing the momentum that has been created by the Gobardhan Scheme subsequently.

Experts say that this partnership in CBG sector comes against a shared strategic backdrop. Both India and Japan rely heavily on imported natural gas, making domestic alternatives such as biogas increasingly attractive from both energy-security and environmental perspectives.

Japan’s contribution could extend well beyond technology. Its advanced purification systems can help convert raw biogas into high-quality biomethane, while Japanese industrial expertise could bring efficient production and management practices to Indian plants.

Long Term Investments

Finance could be another critical piece of the puzzle. With high upfront investment remaining a major hurdle for CBG projects, Japanese institutions and companies could provide long-term capital and help connect projects with carbon markets. Japanese trading house Sojitz has recently invested in IOC GPS Renewables Pvt Ltd signalling growing commercial interest.

Colonel Rohit Dev, an industry expert and Founder of Reveille Energy, said that Japan as a Government-to-Government protocol, is more invested in India. The Japanese consortiums are much more active in investments in India in green energy and clean technology sector. It’s a proven pathway for them, and they are interested.

Colonel Dev said, “Japan is good in project development as a financer from investment point of view. In 1000 CBG plants they will have stakes as they invest, which is good of India, and Japan is very much willing to do so.”

He said that there are forward integrated technologies with CBG that Japan has and they would be setting up here as well with Indian collaborations whether in JV or SPV or any other shape.

“Japanese have got process technologies – mid stream or post harvest – that will benefit Indians. Plus, the forward integration of CBG with liquefaction/bio-LNG can also take place. Bio-LNG is vital because marine fuels is something that India is looking at and Japan already has proven technologies there. In that sense India has ordered lot of ship-building to happen to get that ownership of supply chain across the globe. So, it’s a small thread attaching to each other,” he added.

He also mentioned that Japan already has an advantage of ‘Making in India.’ With regards to pricing of these niche technologies, Japan agrees to manufacture here and they already have many manufacturing units here in Gujarat or Rajasthan.

Utilising Dairy Cooperatives & Monetising Carbon Credits

Sanjay Ganjoo, Director General of Indian Federation of Green Energy (IFGE), said that some Japanese companies are bullish on bioenergy sector. “Japan based Maruti Suzuki is banking a lot on biogas in India and its planning to set-up many CBG plants. The NDDB (National Dairy Development Board) is also planning to set-up many small plants supported by Japan.” He said that the delegation of the Prime Minister also had representatives of NDDB and Maruti Suzuki; hence, this announcement took place.

He expects a bilateral agreement between Japan and India for carbon credits. “By developing CBG projects in India, Japan would look to earn carbon credits,” said Sanjay Ganjoo.

India’s dairy cooperatives already have a strong network for collecting cattle dung and farm waste, making them well suited to support these biogas projects. The Maruti Suzuki–NDDB model links CBG production with nearby gas stations. It also supports the sale of organic fertilisers through dairy cooperatives, earns revenue from carbon credits, and trains plant operators and farmers.

Combining Japanese tech & India’s feedstock resources

Varun Karad, Co-Founder & CEO, REnergy Dynamics (RED), says that Japan can bring patient capital that is strategic rather than opportunistic. “Unlike conventional private equity funds, which generally operate within an exit horizon of five to eight years, Japanese strategic investors are often prepared to remain invested throughout the development and growth of a business. CBG projects require precisely this kind of capital because they are long-life infrastructure assets that take time to commission, stabilise and achieve their full operating potential,” he stated.

Varun also mentions that from a technology perspective, Japanese-manufactured membranes are already used in biogas-upgradation systems, including in the upgradation technology developed and deployed by REnergy Dynamics. “A CBG facility is ultimately a process plant, and Japan is globally respected for its manufacturing systems, process discipline, quality management, preventive maintenance and continuous-improvement practices. There is considerable scope to adapt these principles to Indian CBG plants so that they operate more reliably, consistently and efficiently.”

Speaking on the intergovernmental collaboration for 1,000 CBG plants, Varun mentions, “We are now awaiting greater clarity regarding its implementation, including the institutional structure, the implementing agencies, the financing mechanism and the responsibilities of the participating stakeholders.”

Industry believes that combined with Japanese process discipline, selected technologies and India’s feedstock resources, engineering capabilities and growing CBG market, the partnership unlock the sector at a scale that short-term capital alone may not be able to achieve.