A game-changing excise duty waiver on compressed biogas (CBG) mixed in CNG pipelines could unleash Rs 1 lakh crore in investments, says the Indian Biogas Association (IBA). Revealed on Sunday, this budget proposal for 2026 is set to supercharge clean energy adoption and support India’s ambitious 2070 net-zero target.
IBA explains that removing excise on the biogas portion eliminates a key barrier, making blended fuels cheaper and projects financially attractive. City gas distributors blending just 5% CBG in the coming five years would need 2.5-3 MMTPA supply, triggering Rs 45,000-55,000 crore in capital spending.
Optimistic projections show blending hitting 7-8% by 2032 under favorable policies, pushing total investments to Rs 1 lakh crore. This windfall addresses inequities where renewable CBG faced the same duties as fossil-based CNG.
Consumers win with potentially lower gas bills, while producers secure reliable markets. The policy fuels private investments, strengthens energy independence, and drives rural growth by valorizing abundant feedstocks: 60 million tonnes potential from farm residue, sewage, and livestock waste yearly.
Post-waiver, typical plants’ viability surges, enabling funding for previously stalled initiatives. CBG’s lifecycle emissions drop rivals any green fuel, cutting 70-90% GHGs. Scaling to 10% blend could avert 12-15 million tonnes of CO2 annually.
As India grapples with stubble burning and waste management, this exemption paves the way for a circular economy, blending innovation with sustainability for a cleaner tomorrow.