Central and State Subsidies for CBG Plants in India (2026): Government Schemes, Capital Assistance & Incentives

Short answer: In 2026 the main subsidy for CBG (Compressed Biogas) plants in India is the GOBARdhan scheme, approved by the Union Cabinet on 6 August 2026 with an outlay of ₹23,731 crore for FY 2026–27 to FY 2035–36. It offers:

• capital assistance of up to ₹2 crore per TPD of installed CBG capacity for eligible projects
• a government-backed CBG price of ₹2,110 per MMBtu
• pipeline support of up to 80% (cluster to trunk line) or 50% (standalone plant to city gas network)
• a credit guarantee of up to 85% for eligible MSME projects

The old MNRE Waste to Energy subsidy closed to new applications on 31 December 2025. Some states, such as Assam and Chhattisgarh, offer extra incentives. None of these amounts is automatic: what you actually receive depends on the guidelines, your eligibility and approval.

A CBG plant needs serious money upfront for feedstock handling, digesters, gas cleaning, compression and manure processing. Government support can make a real difference, but only if you understand what each scheme covers and plan for it before you order machinery. Here is what is available in 2026 and how to use it.

What is a CBG plant?

A CBG plant turns biodegradable waste into fuel. Bacteria break down the waste in a closed digester (anaerobic digestion) and produce raw biogas. The gas is cleaned of carbon dioxide, hydrogen sulphide and moisture, and the resulting biomethane is compressed to make CBG, also called Bio-CNG.

Common feedstocks include:

• Cattle dung and other livestock waste
• Press mud from sugar mills
• Paddy straw and other crop residue
• Napier grass and other energy crops
• Food and vegetable market waste
• Organic municipal and industrial waste

A plant earns from the gas and, if the quality meets the rules, from organic manure (FOM and LFOM) made from the leftover digestate. Remember that the subsidy alone doesn’t make a project viable. Feedstock supply, gas yield, running costs, a gas buyer and manure sales matter just as much.

What is the GOBARdhan scheme 2026?

GOBARdhan is now India’s single national framework for CBG, run by the Ministry of Petroleum and Natural Gas. It was approved on 6 August 2026 and launched in October 2026, and it brings together capital assistance, gas buying, pricing, pipelines and finance under one scheme.

How much CBG plant subsidy can you get under GOBARdhan?

Eligible greenfield CBG projects can get capital assistance of up to ₹2 crore per TPD of installed capacity. The announced framework says the support can also cover eligible feedstock aggregation and manure-processing equipment, and brownfield expansions are included.

Here is the simple upper-limit calculation:

Important: these are ceilings, not promised payments. Reports on the scheme guidelines say plant assistance is paid in instalments and capped per project, with ₹30 crore reported as the cap. Your actual amount depends on the final guidelines, eligible costs and approval. Get written confirmation of eligibility before you put the subsidy in your financial model.

Does GOBARdhan guarantee a price for CBG?

It gives much better price visibility than before. The scheme sets an administered CBG price of ₹2,110 per MMBtu under a pricing framework of at least 10 years, along with offtake support.

It also sets a CBG blending obligation for CNG (transport) and PNG (domestic) gas:

This creates steady demand for CBG, but it does not mean every plant automatically sells all its gas at that price. Confirm the buying arrangement, gas quality specification, delivery point, transport cost and metering for your location before you invest.

Is there support for pipeline connection?

Yes. Connecting a plant to the gas network can be expensive if it is far from a pipeline. Under GOBARdhan’s pipeline component, support goes up to:

• 80% of eligible capital cost for pipelines connecting CBG clusters to trunk pipelines
• 50% of eligible capital cost for standalone plants connecting to city gas distribution (CGD) networks

Reports on the guidelines mention per-km ceilings and a maximum length. Check the exact limits for your project. Before you fix the plant location, look at the distance to the nearest network, its spare capacity, connection rules, and who builds and maintains the line.

What is the Biomass Aggregation Machinery (BAM) scheme?

For plants running on crop residue, collecting and moving biomass is one of the biggest running costs. The BAM scheme helps you buy eligible machinery for collecting, baling, handling and transporting biomass.

According to government information, the scheme has an outlay of ₹564.75 crore, and by 16 March 2026, 37 proposals had been approved with about ₹248 crore of assistance. The earlier guidelines offered up to 50% of the machinery cost per set, subject to a cap.

Not every tractor, trailer or baler qualifies automatically. Check the current BAM guidelines for eligible machines, who can apply and how approval works.

How does the credit guarantee help with a bank loan?

GOBARdhan includes a credit guarantee for eligible MSME CBG projects, covering up to 85% of the outstanding amount at default, subject to project limits. Reports put those limits at ₹20 crore for general MSME projects and ₹25 crore for women-led MSMEs.

A guarantee is not a subsidy. It reduces the bank’s risk, so the bank is more willing to lend, but you still repay the loan in full. Banks will want a solid Detailed Project Report (DPR) covering:

• Total project cost and promoter contribution
• Proposed term loan
• Feedstock availability and cost
• Expected daily CBG output
• Gas sale arrangement
• Manure revenue
• Operating costs, debt servicing and cash flow

Is the MNRE subsidy still available for CBG plants in 2026?

Not for new applications at the moment. MNRE’s Waste to Energy Programme used to give Central Financial Assistance for Bio-CNG:

But the programme ran until 31 March 2026, and the BioURJA portal says the last date for applications was 31 December 2025, with new submissions stopped until further notice. Treat these as past rates and don’t use them in a 2026 project report unless MNRE issues a new notification.

Which states give subsidies for CBG plants?

State support depends on the state policy, project location, type of investment and when the project starts. There is no single state subsidy that applies across India. Depending on the policy, a state may offer:

• Capital subsidy on plant and machinery
• Reimbursement of state GST (SGST)
• Electricity duty exemption or reimbursement
• Power tariff support
• Stamp duty and land concessions
• Interest subsidy on term loans
• Support for feedstock collection
• Single-window clearances

Assam

Assam’s Integrated Clean Energy Policy includes incentives for biofuel projects, including CBG:

All of these are subject to the policy conditions, approvals and limits on combining benefits.

Chhattisgarh

Chhattisgarh has a dedicated CBG Policy 2026, listed on the GOBARdhan portal. Read the notification itself for eligible project types, capacity rules, incentives, land provisions, the nodal department and the application process. Don’t assume a particular subsidy percentage without checking the document.

Rajasthan

Rajasthan is strong for cattle dung, crop residue and Napier-based plants, but a general industrial incentive is not the same as a CBG-specific subsidy. Start with the Rajasthan Single Window Clearance System and check:

1. Whether the project qualifies under a clean energy or bioenergy policy
2. Whether any state incentive specifically covers CBG
3. Whether general industrial incentives apply
4. Which electricity, tax, land or finance benefits apply
5. Whether state benefits can be combined with GOBARdhan

Other states

Also check Uttar Pradesh (Bio Energy Policy 2022), Bihar (Bio-Fuels Production Promotion Policy and amendment), Madhya Pradesh (biofuel project scheme) and Andhra Pradesh (Integrated Clean Energy Policy). These are all listed on the GOBARdhan portal. The policies differ, so compare them against your feedstock, buyer, land, transport and gas network access before choosing a state.

Central vs state CBG support at a glance

Each type of support covers a different cost. A pipeline grant, a machinery subsidy, capital assistance and a tax refund are not interchangeable.

Can a CBG plant get both central and state subsidy?

Possibly, if both schemes allow it, but it is not automatic. Before combining benefits, confirm:

• Whether the central scheme allows the state incentive alongside it
• Whether the state policy blocks overlapping claims
• That the same equipment or cost is not claimed twice
• How each scheme defines eligible project cost
• Whether approval is needed before ordering machinery or starting construction
• Commissioning deadlines and performance conditions

Never work out your total subsidy by simply adding up the headline rates from different policies.

Who can apply for a CBG plant subsidy?

Depending on the scheme, applicants can include private companies, waste and biomass businesses, farmers and FPOs, cooperatives, entrepreneurs, eligible MSMEs and public sector bodies.

Registration on the GOBARdhan Unified Registration Portal is open to government and private entities running or planning biogas, CBG or Bio-CNG plants. The registration number is needed to seek support from ministries and departments. Registration alone does not mean your subsidy is approved.

What documents are needed for a CBG subsidy application?

Company and promoter: company registration, PAN, GST, promoter KYC, authorisation letter.

Land and project: land ownership or lease, site and plant layout, Detailed Project Report (DPR), capacity and production calculations, technology and machinery specifications, implementation schedule, statutory approvals.

Financial: project cost estimate, machinery quotations, means of finance, promoter contribution, bank sanction (if required), projected cash flow, proof of eligible expenditure.

Operational: feedstock assessment and supply agreements, expected gas output and quality, gas offtake arrangement, digestate and manure plan, pollution-control documents.

How to apply for a CBG plant subsidy: step by step

1. Choose the location: check feedstock, road access, land, water, power and distance to the gas buyer or pipeline.
2. Fix the capacity: base it on real feedstock quantity, realistic gas yield and seasonal supply.
3. Prepare the DPR: process flow, technology, layout, machinery, cost, operating expenses, output, revenue, gas buyer and digestate plan.
4. Register on the portal: register on the GOBARdhan Unified Portal and follow the current scheme procedure.
5. Confirm eligibility: get the operational guidelines and confirm eligible costs, application window, implementing agency and approval steps.
6. Arrange finance and clearances: complete bank funding and statutory approvals.
7. Apply: submit the application with technical and financial documents. Submission is not approval.
8. Commission and comply: keep invoices, equipment records, commissioning reports and performance data, and complete the inspections needed to release assistance.

How much can subsidy reduce the cost of a CBG plant?

Take a hypothetical 5 TPD CBG plant. At the GOBARdhan rate of up to ₹2 crore per TPD, the upper-limit figure is ₹10 crore. That doesn’t mean the government will pay ₹10 crore. The approved amount depends on the guidelines, eligibility, cost limits and approvals.

A sensible financial model runs three cases:

1. No subsidy: can the project survive on equity, debt and operating revenue alone?
2. Partial subsidy: a realistic amount backed by the policy and an early eligibility check.
3. Maximum subsidy: the highest amount you could qualify for, clearly marked as conditional.

This stops you from overestimating returns or relying on an uncertain subsidy to repay your loan.

Common mistakes to avoid

1. Assuming the maximum subsidy is guaranteed. “Up to” is a ceiling, not a promise.
2. Using outdated guidelines. The MNRE Waste to Energy rates are a good example: the window has closed.
3. Ordering machinery before checking eligibility. Some schemes require approval first.
4. Ignoring the feedstock supply chain. High collection and transport costs can sink a technically sound plant.
5. Ignoring gas offtake. Distance to the network, gas quality and commercial terms decide profitability.
6. Ignoring digestate. FOM and LFOM need equipment, running costs and a real sales plan.
7. Counting the same cost twice. One machine can’t be claimed under two schemes unless both rules allow it.

Frequently asked questions

What is the subsidy for a CBG plant in India in 2026?

Under the GOBARdhan scheme, eligible CBG projects can get capital assistance of up to ₹2 crore per TPD of installed capacity, plus pricing support (₹2,110 per MMBtu), pipeline support (up to 80% or 50%) and an 85% credit guarantee for eligible MSMEs. The actual amount depends on guidelines and approval.

How much subsidy can a 5 TPD CBG plant get?

At the announced rate of up to ₹2 crore per TPD, the upper limit for a 5 TPD plant is ₹10 crore. The approved amount may be lower, depending on eligibility, eligible costs and the per-project cap.

Is the MNRE Bio-CNG subsidy still open?

No. MNRE’s Waste to Energy Programme stopped taking new applications after 31 December 2025, and the programme ran until 31 March 2026. Check BioURJA for any new notification.

Can I get both central and state subsidy for a CBG plant?

Yes, if both schemes allow it and you don’t claim the same cost twice. Confirm the rules on combining benefits with both the central and state authorities before you plan for it.

Where do I register for the GOBARdhan scheme?

On the GOBARdhan Unified Registration Portal (gobardhan.sbm.gov.in). The registration number is needed to seek support from the relevant ministries and departments.

How Proveg Engineering supports CBG plant projects

At Proveg Engineering & Food Processing Pvt. Ltd., we supply the machinery that feeds and finishes a CBG plant, sized to your feedstock, capacity and output:

• Biomass shredding and size reduction, including hammer mills
• Feedstock preparation, handling and conveyors
• Drying equipment where the process needs it
• Digestate processing and organic manure preparation through our biofertilizer plants
• Grinding, screening, mixing, granulation and packing for solid manure

A complete CBG plant also needs anaerobic digestion, gas purification, compression and storage. See our CBG plant page and our complete guide to CBG plants in India. For turnkey EPC of the full plant, we work alongside Biovardhan Energy.

Talk to us about your CBG project: call or WhatsApp +91 9928038885, or visit www.provegengineering.in.