Indian Biogas Association Applauds Government's Increase in CBG Procurement Price

The Indian Biogas Association (IBA) has welcomed the government's decision to increase the procurement price of compressed biogas (CBG). This adjustment is seen as a positive step towards realising the potential of the bioenergy sector. However, the IBA expressed that the increase was less than expected and hopes for another revision soon.

Representative image

The Ministry of Petroleum has raised the CBG procurement price from Rs 1,380 to Rs 1,478 per Metric Million British Thermal Unit (MMBTU), effective from June 1. This revised rate will remain in effect until October 31, 2025. The IBA believes this move shows a better understanding of the industry's economics and will help unlock bioenergy's potential in India.

Compressed Biogas Price Increase

IBA Chairman Gaurav Kedia stated, "This change in price is a step in the right direction for CBG developers as it corresponds with their reality." He noted that a higher revision was anticipated, given production economics. Kedia believes this could support CBG's role in sustaining India's energy independence by accelerating progress for both existing and new developers.

Kedia also mentioned that while parity with Compressed Natural Gas (CNG) at pre-tax levels has been achieved, there is a pressing need for further price increases to reward the greener molecule. He suggested implementing a green certification framework with cap and trade mandates for companies with higher carbon footprints.

Impact on Entrepreneurs and MSMEs

According to the IBA, further price hikes could significantly enhance returns on investment for entrepreneurs and MSMEs. This would help scale up decentralised CBG production across rural India, attract institutional finance and foreign direct investment (FDI), and speed up progress towards national goals on clean mobility, waste management, and energy self-reliance.

The current decision aligns with the government's aim to promote cleaner fuel adoption, boost economic development in rural areas, and advance India's circular carbon-neutral economy. The IBA believes these steps are crucial for achieving these objectives.

The IBA's statement highlights the importance of supporting CBG developers through favourable policies. By doing so, India can move closer to its targets of energy independence and environmental sustainability. The association remains hopeful for continued government support in this sector.

With inputs from PTI