The Indian Biogas Association (IBA) has welcomed the Union government’s recent decision to raise the procurement price of compressed biogas (CBG), calling it a step in the right direction for the clean energy sector.
However, the industry body expressed that the hike fell short of expectations and called for a further upward revision in the near future. The Ministry of Petroleum and Natural Gas has revised the procurement rate of CBG from ₹1,380 per Metric Million British Thermal Unit (MMBTU) to ₹1,478/MMBTU, effective from June 1 to October 31, 2025. The new rate aims to provide greater financial viability to CBG developers and support India’s broader goals for energy independence and clean mobility. “This change in price corresponds with the economic realities of developers,” said IBA Chairman Gaurav Kedia. “While it is a welcome move, the sector had anticipated a higher increase considering the production costs. A further hike is necessary to sustain and scale operations.” Kedia noted that the revised rate achieves pre-tax parity with compressed natural gas (CNG), a significant milestone for the biogas industry. However, he argued that CBG, being a greener and sustainable fuel, deserves a premium to reflect its environmental benefits.
He also urged the government to consider creating a green certification framework backed by a cap-and-trade mechanism. “Such a system should be mandated for companies with higher carbon footprints to incentivise cleaner alternatives like CBG,” Kedia added. According to the IBA, a higher procurement rate could significantly improve the return on investment for entrepreneurs and micro, small and medium enterprises (MSMEs) in the sector. It would also help scale up decentralised biogas production across rural India, draw institutional funding and foreign direct investment, and accelerate progress toward India’s clean energy, waste management, and circular economy targets. The association stressed that the current price revision reaffirms the government’s commitment to promoting sustainable fuels, fostering rural economic development, and supporting India’s transition to a carbon-neutral future.
As the demand for renewable and domestically produced fuels continues to rise, the biogas sector is positioning itself as a critical contributor to India’s green growth strategy. The IBA’s latest response highlights the need for ongoing policy support and pricing reforms to realise the sector’s full potential.
