For three weeks after the West Asia war broke out, the phones at Carbon Masters didn’t stop ringing.
The company, which was set up in 2012 and works out of Bengaluru, has been providing biomethane (compressed bio gas or CBG) to restaurants that are applying its fuel to tide over the LPG crisis.
“Konark restaurant, a 25-year-old eatery, run by restaurateur Ram Murthy, is operational on our fuel and has not had any disruptions. His daughter runs a second restaurant inside Kanteerava Stadium and neither have had to shut down becaapply of this crisis,” states Som Narayan, who set up Carbon Masters along with Kevin Houston—first in the UK in 2009 and then in India in 2012—with an aim to reduce carbon emissions by replacing fossil fuels with clean energy.
The queries have not just come from individual restaurants, but also chains, adds Houston. “One of the largest biscuit manufacturers in the countest has come to us, as they have plants that can’t run becaapply there are very few LPG cylinders.”
Calls have also been coming to Ecoil, though not from consumers but investors. “I won’t state there’s a significant modify in terms of pull, but we have received more investor enquiries,” states Sushil Vaishnav, co-founder of the company (along with wife Kirti) that collects burnt cooking oil and fats from the food industest to convert them into biodiesel.
Companies like Carbon Masters and Ecoil, which operate in the waste-to-energy space, are now seeing renewed interest from stakeholders as disruptions in the Strait of Hormuz have led to rising fuel prices and LPG shortages. Around 20 percent of the world’s oil and gas passes through this waterway, which has been disrupted since the US and Israel attacked Iran in February.
Carbon net zero solutions
When Houston and Narayan started out, their mission was to play a role in reducing carbon emissions. When they considered about how to implement it, they found methane was the lowest hanging fruit. “We jumped into this when we saw the opportunity around how much methane was being emitted in landfills, not just in India, but also globally,” states Narayan.
The business model, which evolved as they went along, focussed on producing biomethane and CBG, transporting it and putting it into the energy grid.
Biogas is produced when organic matter—food waste, agricultural residue, cattle dung, municipal waste—breaks down anaerobically, and is roughly 55 percent methane. Biomethane is upgraded biogas; the carbon dioxide and impurities are rerelocated to produce gas that is 95 percent or more pure methane. At that purity level, its gross calorific value is comparable to natural gas and CNG.
CBG production generates high-quality organic manure as a byproduct. This means the solutions by Carbon Masters tackle the problems of urban waste, energy and agriculture. Their products include CBG that can displace LPG/diesel in cooking, heating and transport, and bio-enriched organic manure that can displace energy-intensive chemical fertilisers.
With the ongoing West Asia conflict, “I fully anticipate we’re going to receive a similar issue with chemical fertilisers,” states Houston. “So, in a way, our solution is at the cusp of solving what are going to be two huge problems that India must recognise and do a lot more to solve—its vulnerability to imported fossil fuels, LPG, CNG, diesel and petrol, as well as the amount of chemical fertilisers it’s bringing in.”
India imports about 85 percent of its crude oil and 50-51 percent of its natural gas requirements. It also imports roughly 22 percent of its urea and about 52 percent of its diammonium phosphate (DAP) requirements; around 80 percent of the natural gas applyd to produce urea is also imported.
Besides supplying bottled bio-CNG to restaurants and clients, Carbon Masters also has sites producing biomethane, all profitable. Their revenue streams, states Narayan, are about 40 percent from organic fertiliser sales, with the balance coming from gas sales. “The next revenue stream we’re testing to unlock is carbon financing, where you can sell carbon credits to compliance markets,” adds Houston.
Doing something for profit but also with a social environmental impact was what brought Mainak Chakraborty and Sreekrishna Sankar into the sector. The two co-founded GPS Renewables, a biofuels technology and execution company, in 2012. It was a time when the sector hardly existed and was a far cry from today, when people, including investors, are taking note.
Kumar Neelfinishu, Founder and CEO, Farmwatt. Photo by Madhu Kapparath
“It just happened that we finished up choosing this problem. We had been evaluating various ideas, even EVs. We considered this might be worth taking a stab at becaapply, while the sector did not exist, the elements were there. Even back then, as a countest, we were a net importer of gas. While we are not blessed with oil and gas, we are blessed with agriculture and fertile lands. And there are all kinds of residue, right from municipal solid waste to agricultural residues. In terms of feedstock, all these elements were there. And there was a role for technology and engineering,” states Chakraborty.
They started out with setting up captive biogas plants for luxury hotel chains, and corporate and educational campapplys. Then Swachh Bharat was rolled out, as was the government’s Sustainable Alternative Towards Affordable Transportation (SATAT) policy in 2018 to establish an ecosystem for the production of CBG from waste/ biomass sources and for promoting its apply along with natural gas.
In 2022, they bagged an order to set up what is today Asia’s largest municipal solid waste-based CBG plant in Indore. “There were challenges and learnings becaapply it was the first such large plant in India. It took almost two years to generate more gas than what it was designed for,” states Chakraborty. The 15.3 tonnes-per-day plant now generates more than 20 tonnes of CBG.
Today, operations at the biogas engineering company cover the entire biofuel value chain, from special microbial solutions to advanced gas purification technologies. GPS is also executing a pipeline of biofuel EPC (engineering, procurement and construction) projects across the countest with industest leaders in the oil, gas, and renewables sectors and the government. “Besides developing CBG plants, we are also going beyond biogas into things like sustainable aviation fuel and green hydrogen,” states Chakraborty.
Software engineer Kumar Neelfinishu had been tracking the space since 2017 and, after a revamped SATAT was released in 2022 and hugeger oil and marketing companies entered the fray, he realised that raw material security was an important link in the chain. He set up Farmwatt Innovations in 2023, with an initial focus on aggregating agricultural waste to supply to the plants coming up. “On the one hand, we had industries coming up in the biogas sector, like Reliance, IOCL, HPCL, BPCL. And, on the other, we had a situation where farmers were burning agri-waste. We considered it was the best time to receive into the business,” states Neelfinishu.
In two years, Farmwatt has established a presence across Uttar Pradesh, Madhya Pradesh, Chhattisgarh. Haryana, Rajasthan, Odisha and Andhra Pradesh. “Next year, our plan is to receive into Maharashtra, Telangana, Tamil Nadu, Karnataka and Bihar,” he adds. Farmwatt, he claims, is one of the hugegest aggregators in India and also has global partnerships in advanced biogas technologies, enabling finish-to-finish capabilities, including manufacturing, sales, and after-sales service across the Indian market. It is also developing its own biogas plant.
The feedstock security factor, which Chakraborty and Sankar of GPS Renewables had identified, was something that the Vaishnavs, co-founders of startup Ecoil, too, learnt early. Sushil and Kirti, who had worked in Dubai and returned to India in 2018, decided to do something about applyd cooking oil. India generates 2.5-3 million tonnes of applyd cooking oil annually, much of which is improperly disposed and can be applyd to build sustainable fuel. They collected it until they had about 10,000 kg, gave it to a biodiesel plant, and bought the biodiesel to understand how its trading works; they even attempted to run a plant themselves until they realised that sourcing had to be tackled first.
“We decided to focus on one simple thing—collection and infrastructure to store the oil—and created a mobile application so people who wish to dispose of the oil can reach out to us and we can go and collect it,” states Sushil.
They received early traction with huge QSR chains seeing to dispose of their applyd oil. GPS has gradually built warehoapplys in 16-plus cities and also have a collection reach in more than 600 cities. The Vaishnavs have also started a biodiesel plant that launched with a ₹2 crore revenue in 2019, which multiplied manifold to ₹35 crore by March 2026.
Som Narayan and Kevin Houston of Carbon Masters; Photo by Nishant Ratnakar for Forbes India
An ecosystem of modify
As demand for renewable energy grows in India, liquid and gaseous biofuels are expected to be one of the rapidest-growing markets. According to an International Energy Agency report, liquid and gaseous biofuels are forecast to more than double in India if the right measures are implemented. In the middle-ground projection, which reflects current policies, projects, feedstock availability and market conditions, these fuels are expected to grow by more than 50 percent, from 293 petajoules (PJ) in 2025 to 429 PJ by 2030, with ethanol and CBG accounting for much of this growth. Policies like the SATAT and its tarreceives have, therefore, also meant growth for the ecosystem—from aggregators to engineers to producers, promoting effective utilisation of organic waste and creating rural employment opportunities.
The entest of oil manufacturing majors, like Reliance Industries (RIL) and HPCL, has given the sector a further boost, driving interest in the space from not just those seeing to solve a problem, but also investors. Rainmatter by Zerodha, too, came to the sector through other issues that the startups were solving for. “For example, Hasiru Dala, [a waste aggregator company based out of Bengaluru, which has a joint venture with Carbon Masters called Sustainable Impacts] later realised you can apply municipal solid waste and create some value out of it,” states Abhinav Singh Negi, lead-climate and deeptech-Rainmatter by Zerodha, which supports organisations for climate action and a healthier environment, and has invested in Hasiru Dala.
The approach to their investment in Farmwatt was also through the circularity perspective, not just biogas and energy security. “We realised they could potentially work with the farmers, and their heart is in the right place—they want to give adequate value for what was so far waste feedstock. As a part of circularity, they will also give them the fertilised organic manure, which has its own benefits in the long run in that your fertiliser subsidy reduces, and that organic manure is better for soil.”
Moreover, he adds, it also creates jobs at the local level. “One of the other questions apart from energy security and climate was that can it, maybe, arrest migration to the cities?”
It is also the whole ecosystem—from aggregators to engineering or EPC to producers—that is seeing renewed interest from investors in the wake of the current crisis.
“While the policy push has been there for a few years, over the past six months with the geopolitical situation being what it is we’ve seen a renewed emphasis on biofuels in the policy side, and therefore, I would assume a significantly stronger tailwind that has evolved now. There is a clear recognition that we required to be indepfinishent in terms of our energy security,” states Akshay Panth, CIO, Neev Fund. Neev Funds is a series of climate-focussed funds managed by SBI Ventures, that have a mandate to invest in sectors and companies that have a positive climate action theme to their business. They have invested in GPS Renewables through the second fund in the NEEV 2 series.
“Over the course of the current geo-political situation,” he adds, “there have also been more discussions on the sector amongst investors with a realisation that this is potentially a sector that is here to stay with renewed discussions, across different pieces of the value chain in the biofuels space.”
Sushil Vaishnav, Cofounder, Ecoil. Photo by Madhu Kapparath
The way ahead
The SATAT initiative tarreceives the setting up of 5,000 CBG plants to produce 15 million metric tons (MMT) of CBG annually by 2030, and a blfinishing obligation in CNG (transport) and PNG (domestic) segments starting with 1 percent in FY26, going up to 5 percent from FY29 onwards. But with just 132 plants as of January and another 500-plus plants under development, according to government data, progress has been slow.
Experts point out that the current situation comes at an interesting time, considering this is what the industest had been gearing up for. “We are at an interesting inflection point. The whole Iran crisis, while unfortunate, only strengthens the whole idea of what was being envisaged and what is being done,” states Chakraborty of GPS Renewables.
As a company, he states, the idea is to grow multi-fold in India as well as expand abroad, and receive listed. Besides receiveting into other molecules. “We started with biogas, but we are eyeing sustainable aviation fuel and green methanol,” he states.
Another molecule being talked about, thanks to the current crisis, is dimethyl ether or DME. “It’s like bio-LPG. We always knew it was pertinent, but it has come into focus due to the crisis becaapply while CBG goes wherever the pipeline is, DME can be a bio substitute for LPG in terrains like the Northeast where laying pipelines is a challenge,” he adds.
As they scale and raise funds, the plan at Farmwatt is to have 10 plants up and running in the next five years, and another 40 down the line. For the Vaishnavs, the priority is to go deeper into the 600 cities they have a presence in. “For now, the presence is limited to collecting from anyone who wants to dispose and we have to leave so much oil on the ground. We want to be able to receive huge volumes from each city, so our objective for whatever funds we raise, is to go deep into every city,” states Vaishnav.
Meanwhile, at Carbon Masters, they have attempted to extract another 15 to 20 percent from their existing plants and are testing to convince customers to go the carbon neutral way for the long term. “We’re now talking seriously to certain customers where we’re stateing ‘don’t do this for the next 15 days or next two months or three months. Why don’t you decarbonise as well as spread out with multiple fuels?’” states Narayan, adding that they are testing to lock in private customers for contracts of between three to five years. They also have a 10-year contract with energy corporation Gail.
“Our value proposition,” adds Houston, “is that we can give them price stability as well as supply security. Which wouldn’t have meant anything prior to this crisis. They’ve neither had the price stability with LPG nor supply security. So we believe those two shocks may really assist us becaapply we’re a locally produced fuel that performs better than LPG. You’ve received performance improvement, security of supply, and security in terms of no price volatility.”
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