How to Set Up a Compressed Biogas (CBG) Plant in India: 2026 Guide

Last updated: 1 November 2026 · By KSR Green Bharat Team

Key takeaways

• Feedstock security over 10+ years is the foundation of a CBG project.
• The process chain is: feedstock → pre-treatment → digestion → upgrading → compression → offtake, with organic manure as a co-product.
• Register on gobardhan.eil.co.in to access Ministry of Petroleum and Natural Gas support.
• Policy support improved significantly in 2026 with GOBARdhan’s pricing, capital and offtake framework.

What is compressed biogas?

Biogas from anaerobic digestion contains methane, carbon dioxide and small amounts of hydrogen sulphide and moisture. When it is cleaned and upgraded to high methane purity and compressed, it becomes CBG – chemically equivalent to natural gas. It can fuel vehicles, replace natural gas or LPG in industry, or be injected into city gas distribution (CGD) networks.

Where does India’s CBG sector stand in 2026?

According to the Government’s factsheet of 6 August 2026, 1,908 CBG/Bio-CNG plants had been registered on the GOBARdhan Unified Registration Portal. Of these, 217 had been commissioned, producing about 0.4 MMSCMD, and 339 were under construction. India meets nearly half its natural gas needs through imports, which is a key reason the Government is backing domestic CBG.

Step 1: Secure feedstock

Map volumes within your collection radius, test samples for gas potential, and lock in supply agreements before finalising capacity.

Step 2: Design the process

1. Pre-treatment: shredding, mixing and, for lignocellulosic residue such as straw, treatment to improve digestibility.
2. Anaerobic digestion: digesters sized for your feedstock’s retention time and loading rate, with temperature and mixing control.
3. Gas cleaning and upgrading: removal of hydrogen sulphide, moisture and carbon dioxide to reach CBG quality.
4. Compression and storage: compression into cascades or delivery into a pipeline.
5. Digestate handling: solid–liquid separation to produce fermented organic manure (FOM) and liquid FOM.

Technology selection should be driven by feedstock tests, not by a vendor’s standard design.

Step 3: Register and plan approvals

• Obtain a registration number on the GOBARdhan Unified Registration Portal (gobardhan.eil.co.in); it is required to avail MoPNG benefits.
• Land use and building approvals.
• Pollution control board consent as applicable in your state.
• PESO-related approvals for compression, storage and dispensing of compressed gas.
• Fire safety approvals.

Approval requirements vary by state and plant configuration, so engage a consultant familiar with your state early.

Step 4: Plan offtake and revenue

Under the GOBARdhan scheme, procurement by City Gas Distribution entities supports a notified CBG obligation of 3% in FY 2026-27, 4% in FY 2027-28 and 5% from FY 2028-29 onwards in the CNG (transport) and PNG (domestic) segments. The administered price of ₹2,110 per MMBTU comes with a minimum ten-year pricing horizon. A pipeline infrastructure component supports connecting plants to trunk pipelines and CGD networks, which can reduce the cost of moving gas by cascade.

Manure sales are the second revenue stream. Market Development Assistance of ₹1,500 per tonne has supported fermented organic manure from biogas and CBG plants. Build a plan for manure marketing from day one.

For a full breakdown of the scheme, read our GOBARdhan scheme 2026 guide.

Step 5: Finance the project

GOBARdhan provides capital assistance of up to ₹2 crore per TPD of installed CBG capacity for eligible greenfield projects, extending to feedstock aggregation and manure processing assets, and a credit guarantee of up to 85% on eligible loans for MSME-based projects. Lenders will still expect a bankable project report, feedstock agreements and a clear offtake path.

Common reasons CBG projects struggle

• Overestimating feedstock availability or gas yield.
• Underestimating straw collection, storage and pre-treatment costs.
• Weak digestate management and manure sales.
• Poor process monitoring leading to digester upsets.
• Delays in evacuation where pipeline connectivity is not available.

How KSR Green Bharat supports CBG projects

KSR Green Bharat provides CBG installation and consultancy support shaped around the project stage, site needs and agreed execution plan – from project requirements and site priorities to equipment and installation coordination, handover and ongoing support planning. Share your location, feedstock and project stage to discuss your CBG plant.

Frequently asked questions

What is compressed biogas (CBG)?

CBG is biogas that has been cleaned and upgraded to high methane purity and then compressed. It is chemically equivalent to natural gas and can be used as automotive fuel, in industry or injected into city gas networks.

Which feedstocks can a CBG plant use?

Common feedstocks include paddy straw and other crop residues, cattle dung, press mud from sugar mills, food and market waste, and the organic fraction of municipal solid waste. Feedstock choice drives plant design, pre-treatment and operating cost.

Where do I register a CBG plant?

Anyone operating or planning a CBG or Bio-CNG plant can obtain a registration number on the GOBARdhan Unified Registration Portal (gobardhan.eil.co.in). The registration number is required to avail benefits and support from the Ministry of Petroleum and Natural Gas.

How many CBG plants are operating in India?

According to the Government’s 6 August 2026 factsheet, 1,908 CBG/Bio-CNG plants were registered on the GOBARdhan portal, of which 217 were commissioned producing about 0.4 MMSCMD and 339 were under construction.

What support is available for new CBG plants?

The GOBARdhan National Circular Bioenergy Scheme approved in August 2026 provides an administered CBG price of Rs 2,110 per MMBTU (about Rs 105/kg), capital assistance of up to Rs 2 crore per TPD for eligible greenfield projects, assured offtake through CBG obligations, and credit guarantee of up to 85 percent for eligible MSME projects.

Sources

• PIB – GOBARdhan: Fuelling Clean Energy and Rural Growth (6 Aug 2026, PDF)
• GOBARdhan Unified Registration Portal