New Delhi, May 12: India’s compressed biogas (CBG) sector remains vastly underutilised, with current production accounting for less than 1 per cent of its estimated annual capacity of 62 million metric tonnes, according to a report by fintech platform smallcase.
The report highlights a significant opportunity for domestic energy generation, with the sector potentially attracting investments of nearly ₹1 lakh crore as India looks to reduce dependence on imported hydrocarbons.
Feedstocks such as agricultural residue, cattle waste, municipal solid waste and industrial byproducts are increasingly being seen as strategic energy resources capable of strengthening energy security.
Karthick Jonagadla, MD and CEO of Quantace Research, said the government’s SATAT (Sustainable Alternative Towards Affordable Transportation) initiative, along with a phased mandatory blending roadmap, will act as key growth drivers.
Over 130 CBG plants have already been commissioned under SATAT, while more than 1,000 projects are currently in the pipeline. The gradual shift towards mandatory blending is expected to create long-term demand visibility, improving the commercial viability of projects.
“The transition from policy encouragement to mandatory blending changes the economics of the sector meaningfully,” Jonagadla noted, adding that clearer demand signals are likely to attract infrastructure developers, technology providers and institutional investors.
The report underscores that India’s reliance on imported crude oil remains a structural economic vulnerability, positioning biogas and CBG as viable domestic alternatives.
Recent policy support—including excise duty waivers on CBG blended with CNG and improved procurement pricing—is expected to accelerate private sector participation.
Major public sector oil companies such as Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited are expected to play a pivotal role as both off-takers and developers of CBG infrastructure, while city gas distribution companies are also likely to benefit as blending requirements expand.
