CBG plants are industrial facilities that produce Compressed Bio-Gas (CBG), a renewable fuel that is chemically similar to Compressed Natural Gas (CNG). The concept is a key component of the Indian government's energy and waste management strategy.
The origin of the CBG plant ecosystem is tied to the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme, which was launched on October 1, 2018, by the Ministry of Petroleum and Natural Gas (MoP&NG). The scheme was created to solve the dual problems of India's heavy dependence on imported fossil fuels and the challenge of managing vast amounts of organic waste, including agricultural residue and municipal solid waste. The initial goal was to establish 5,000 CBG plants to produce approximately 15 million metric tons of CBG per year.
A CBG plant works by processing various organic feedstocks, such as cattle dung, agricultural residue (like paddy straw), sugarcane press mud, and municipal solid waste, through anaerobic digestion to produce raw biogas. This raw biogas is then highly purified to remove impurities like carbon dioxide and hydrogen sulfide, raising the methane content to over 90%, and is finally compressed to 250 bar pressure to become CBG. The mechanism is supported by Public Sector Oil Marketing Companies (OMCs) like IOCL, BPCL, and HPCL, which invite entrepreneurs to set up the plants and guarantee the purchase of the CBG through long-term offtake agreements.
The CBG plant concept connects directly to the broader GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) initiative, which was launched under the Swachh Bharat Mission (Grameen) and aims to convert bio-waste into energy and nutrient-dense soil rejuvenators. The scheme also supports the National Biofuel Policy and India's commitment to achieving net-zero emissions by 2070. Recently, the government approved a national CBG scheme under GOBARdhan for implementation from FY 2026-27 to FY 2035-36, which aims to increase domestic CBG production nearly ten-fold. This new framework includes a government-backed administered price and capital assistance for eligible greenfield projects, while the core mechanism of guaranteed offtake by OMCs remains.