Why Should Biofuels be at the Centre of India's Clean Energy Transition?

Unlike other sources of renewables such as solar, wind or green hydrogen, that are variable and remain costly, CBG is storable, dispatchable and infrastructure-ready. It is one of the most reliable clean energy options for decarbonising the transport sector and city gas distribution.

December 30, 2025. By News Bureau

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Ravikumar SV

Bharat GPS Bioenergy

Clean energy transition

liquefied natural gas

Compressed natural gas

LNG

India has a growing energy demand, and fossil fuels still dominate the mix. Conventional energy sources such as coal, oil and natural gas account for close to 84 percent of India’s primary energy supply, and the remaining 16 percent comes from non-fossil sources such as renewable energy and nuclear.

In terms of electricity, India has an installed capacity of about 485 GW, which is split almost equally between fossil and non-fossil sources. However, the generation of electricity is still dominated by fossil fuels, which provide 75–80 percent of the electricity consumed.

India now imports about 85 percent of its crude oil to meet its energy needs, leaving our economy exposed to global price shocks. India has a goal of net zero by 2070 and a 45 percent reduction in emissions intensity by 2030. To meet these commitments, we need bold action across sectors.

Compressed Biogas: A Bridge for India’s Energy Gap

Currently, natural gas accounts for 22-23 percent of the global energy mix and in India, it merely contributes to 6-8 percent. Natural gas is cleaner than oil and coal, supports renewable integration and helps balance the grids globally. In India, more than 50 percent of the current demand for natural gas is met through imports, largely as Liquefied Natural Gas (LNG).

The demand for natural gas can go up to 500 MMSCMD (Million Metric Standard Cubic Metres per Day) by 2030, but our domestic production capacity remains stagnant at 100 MMSCMD. There’s a huge gap of 400 MMSCMD, which can be addressed through Compressed Biogas (CBG). It can be a drop-in substitute for Compressed Natural gas (CNG) and LNG that can be deployed immediately in vehicles, industries, and city gas networks. To achieve 15 percent penetration in the CNG network, India will need an estimated 12.8 MMTPA (Million Metric Tonnes Per Annum) of CBG production capacity.

Why CBG?

CBG has the potential to address India’s fuel deficit, and it offers social and economic benefits across varied sectors. It is emerging as a multi-dimensional solution for our country’s energy requirements and environmental challenges.

Energy Security: It can substitute CNG and LNG with domestically produced gas, and reduce our country’s heavy import dependence.
Rural Economy: It helps farmers tap into new income streams by selling crop residues and organic waste.
Addresses Pollution: CBG reduces the burden of solid waste and air pollution by turning stubble, municipal garbage, and agro-residues into fuel.

There have been strong tailwinds towards CBG with the government’s SATAT scheme and a slew of other initiatives. It is seen as a central piece to India’s Net Zero commitments while also helping create rural jobs.

CBG: The Most Reliable Clean Energy Option for India

Unlike other sources of renewables such as solar, wind or green hydrogen, that are variable and remain costly, CBG is storable, dispatchable and infrastructure-ready. We already have existing pipelines, cylinders and fuel stations that can seamlessly use this biofuel with ease. This makes CBG one of the most reliable clean energy options for decarbonising the transport sector and city gas distribution. CBG is that rare solution that can reduce emissions, cut imports, and empower rural communities and economies.

Policy Support for CBG

The CBG sector is steadily gaining momentum through a number of initiatives by the Central Government, incentives from the state government and through global collaborations. This helps de-risk investments, improve project viability, and establish CBG as a key driver of the country’s clean energy transition.

SATAT Scheme: The government has set a target of 5,000 CBG plants with OMC offtake agreements and procurement price revised to INR 1,478/MMBTU (Million British Thermal Units)
Facilitating Ease of Business: GOBARdhan portal streamlines clearances, and additionally, municipalities are mandated to supply feedstock.

Establishing Lines Between Waste & Fertiliser Link: Guaranteed MSW, tipping fees, and digestate recognised as Fermented Organic Manure (FOM).

State Backing and Global Partnerships: Subsidies and land aid from states and the Global Biofuel Alliance position CBG in global leadership.

To make CBG much more successful, policymakers must ensure fair contracts, necessary funding support, linkage to feedstock and policies that support the growth of CBG. Solar and wind will provide wings, but CBG will be central to India’s energy transition journey.

- Ravikumar S.V., CEO of Bharat GPS Bioenergy