India’s biogas sector set to draw ₹5,000 crore investment

December 21, 2025

New Delhi, Dec 21 – India’s biogas sector is expected to attract investments of over ₹5,000 crore in the 2026-27 financial year, signaling growing investor confidence in renewable energy and sustainable fuel solutions, the Indian Biogas Association (IBA) said on Sunday. The surge in interest comes after a buoyant 2025 showing, with stakeholders anticipating continued expansion and policy support.

 Investment Driven by CBG Growth and Market Uptake

According to the IBA, India has already commissioned more than 100 compressed biogas (CBG) plants, while in the 2024-25 fiscal year about 94 CBG plants sold over 31,400 tones of CBG, indicating strong market uptake and operational momentum. This growing pipeline of production capacity has laid the groundwork for forthcoming investments.

Investors and industry experts believe there is significant room to improve efficiency and utilization in both traditional and medium-scale biogas digesters across the country, boosting prospects for more scheduled projects.

 Policy Support and Sector Dynamics

The IBA highlighted that a relaxed Goods and Services Tax (GST) rate for the CBG sector is expected to enhance project viability, potentially translating into a 45 per cent increase in new investments over the short to medium term. Such fiscal incentives, along with better feedstock supply chains and integrated policy frameworks, are key drivers of investor interest.

Industry projections suggest that the overall CBG industry could grow substantially, with expected valuations reaching several billion USD by 2030, reflecting global trends toward low-carbon and renewable fuel alternatives.

 Benefits Beyond Energy

Apart from offering a cleaner fuel alternative to traditional fossil fuels, biogas and its derivatives—like organic manure from biogas plant by-products—support rural employment, waste management solutions, and clean cooking fuel adoption in underserved communities. Such multi-dimensional benefits are encouraging governments and private players to deepen commitments to the sector.

As India strengthens its renewable energy portfolio, the biogas industry stands poised to play a vital role in the nation’s transition toward sustainable and circular energy practices.