Compressed Biogas (CBG) is a renewable, clean gaseous fuel, which is a concept and a fuel type chemically identical to Compressed Natural Gas (CNG). The concept was formalized in India with the launch of the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme on October 1, 2018, by the Ministry of Petroleum and Natural Gas (MoP&NG). This scheme was created to solve the problem of India's heavy dependence on imported fossil fuels and to promote the effective utilization of organic waste.
The mechanism involves the anaerobic digestion of organic materials, such as cattle dung, agricultural residue, or municipal solid waste, to produce raw biogas. This raw biogas is then purified to remove impurities like carbon dioxide ($\text{CO}_2$) and hydrogen sulfide ($\text{H}_2\text{S}$), raising the methane content to a minimum of 90% as per the IS 16087:2016 standard. The purified gas is finally compressed to 250 bar pressure, making it a "drop-in" fuel compatible with the existing CNG infrastructure.
CBG is closely connected to the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme, which the Union Cabinet approved in August 2026 with an outlay of ₹23,731 crore. This new scheme, effective from FY 2026-27 to FY 2035-36, establishes a mandatory Compressed Biogas Obligation (CBO) for City Gas Distribution operators. The CBO mandates procurement of CBG, starting at 3% in FY 2026-27 and increasing to 5% from FY 2028-29 onwards, which provides a guaranteed market for CBG producers.