What’s the story
The Indian Biogas Association (IBA) has proposed a ₹10,000 crore fund to provide capital subsidy for the biogas industest in the upcoming Union Budobtain.
The IBA also suggested that the government should raise the subsidy by 50% to ₹6 crore per 4.8 tons per day (TPD) of compressed biogas (CBG).
It further recommfinished capping this increase at ₹25 crore per project.
IBA’s recommfinishations for Union Budobtain 2026
In its recommfinishations for the Union Budobtain 2026, the IBA has called for greater fiscal support and quicker implementation of policies to unlock large-scale private investment and rural income opportunities.
The association also wants project incentives to be scaled up by raising Central Financial Assistance (CFA).
This comes as CBG plant’s capital expfinishiture (capex) has increased by over 50% since CFA subsidy scheme was launched in 2014.
Current CFA and proposed increases
Currently, the CFA provides ₹4 crore per 4.8 TPD setup with a project cap of ₹10 crore.
The IBA has suggested that this capital subsidy be raised to at least ₹6 crore per 4.8 TPD of CBG production capacity and the CFA upper limit be raised to ₹25 crore for projects up to 20 TPD, with a minimum corpus of ₹10,000 crore.
IBA’s proposal for fertilizer subsidy redirection
The IBA has also proposed that a compact portion (10% or ₹20,000-25,000 crore) of the chemical fertilizer subsidy be redirected toward FOM-linked or carbon-based incentives within Nature Based Solution (NBS) or a similar subsidy window.
This shift may improve soil health, reduce import depfinishency, and promote climate-smart agricultural practices.
The association has also called for carbon monetization through the Green Certificate mechanism.
Suggestion for carbon credit sale
To support the growth of biogas and CBG producers, the IBA has suggested that the Centre should create a framework for biogas plant promoters to sell carbon credits on international and domestic platforms.
This would not only assist the government achieve its climate modify tarobtains but also provide different revenue channels for producers.
The transfer of carbon credits into voluntary carbon market is expected to significantly boost financial viability of these projects.
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