India’s pursuit of a $5 trillion economy and its 2070 Net Zero target have intensified pressure to diversify energy sources. Yet amid the dominance of solar and wind in policy discussions, biogas remains one of the country’s most underleveraged assets.
From agricultural residue to municipal solid waste, India generates an immense reservoir of organic material—more than 700 million tonnes of crop waste, 150 million tonnes of municipal waste, and 3 million tonnes of cattle dung daily. Most of it is either burned or left to decay, releasing methane, a greenhouse gas 25 times more potent than carbon dioxide. This untapped energy resource could be central to reducing fertilizer and LPG subsidies, cutting emissions, and revitalizing rural economies.
While the government’s SATAT initiative envisions 5,000 compressed biogas (CBG) plants, fewer than 100 have reached operational scale. The gap underscores a broader policy challenge: abundant feedstock and proven technology coexist with fragmented governance and weak financial incentives. In India’s cities, more than 1,250 sewage treatment plants (STPs) exist, yet fewer than 250 use anaerobic digestion—and over half of those flare or underutilize the resulting gas. Each 20 MLD STP could yield roughly 1,500 to 2,000 kilograms of biogas daily. If 300 plants were fully optimized, the output could reach 200 million kilograms of CBG annually—displacing an estimated ₹600 crore in diesel costs while reducing methane emissions.
This inefficiency carries fiscal implications. The government spends about ₹2 lakh crore annually on fertilizer subsidies and ₹50,000 crore on LPG subsidies. A transition toward decentralized biogas systems could significantly reduce both. For example, India’s 80 million cattle-owning households represent a massive energy base. If 40 million families adopted household or community biogas systems, the savings on LPG subsidies alone could exceed ₹14 lakh crore over a decade—while providing energy security and reducing rural dependence on imported fuels.
The environmental case is equally compelling. Biogas systems transform waste into fuel and nutrient-rich digestate, which can substitute 10–15% of chemical fertilizer use, saving ₹20,000–30,000 crore annually. Beyond cost savings, bio-slurry enhances soil fertility, improves water retention, and reduces runoff—key benefits for India’s water-stressed agriculture. At the same time, diverting crop residues and municipal waste into biogas digesters can prevent stubble burning and landfill methane emissions, both major contributors to India’s air quality crisis.
In transport and rural energy systems, compressed biogas can displace diesel and CNG, particularly in local bus fleets, tractors, and delivery vehicles. As city gas distributors begin blending CBG with natural gas, the opportunity to build rural energy hubs anchored in biogas production is emerging. Moreover, biogas-powered generators can provide dispatchable evening electricity, complementing India’s solar-heavy grid and offsetting the need for up to ₹1 lakh crore in battery investments.
The economic and environmental logic is clear—but realizing this potential requires institutional reform. Biogas sits at the intersection of multiple government programs—Swachh Bharat, GOBARdhan, Namami Gange, and SATAT—yet coordination remains limited. Experts argue for a National Mission on Decentralized Bioenergy, integrating small-scale biogas plants with solar microgrids, cold storage, and organic farming networks. Such an approach would empower local bodies, Farmer Producer Organizations (FPOs), and self-help groups to operate community plants, generating revenue from gas sales, slurry, and carbon credits.
Policy updates like the forthcoming Liquid Waste Management Rules 2024 could be pivotal if they mandate biogas recovery from STPs and organic waste streams. Introducing anaerobic digesters in all plants above 10 MLD, coupled with city-level incentives for biogas and bio-slurry use, would mark a major step toward circular urban systems. Financing instruments—such as a Bio-Circular Infrastructure Fund or Green Infrastructure Facility—could de-risk investments through viability gap funding and guaranteed offtake agreements.
