Que: How has the CBG sector in India evolved over the years? What kind of potential do you see in this segment?

Ans: India has the potential to produce 62 MMT per annum of Compressed Biogas (CBG) from agro-residue and other organic waste. The SATAT scheme was introduced in 2018 to set up 5,000 CBG plants with a target to produce 15 MMT of CBG annually as an alternative green transport fuel.

The government has mandated the blending of CBG in the CNG (Transport) and PNG (Domestic) segment of the CGD Sector from one percent in FY 2025-26 to five percent by FY 2028-29 onwards, thereby fuelling the demand for CBG in a big way. Further, Oil and Gas marketing companies have been mandated to set up over 180 CBG plants in the next 2-3 years.

In addition, the government has decided to increase the natural gas share from 6 percent to 15 percent by 2030 in the energy basket to support the energy transition. As per estimates, the CBG industry is likely to be worth USD 7.76 billion by 2030. That’s the scale we’re talking about. It’s a huge opportunity for India, not just for clean energy, but for rural incomes, air quality, and the circular economy. Compressed Biogas in India has become an attractive and scalable business opportunity.

Que: GPS Renewables launched ARYA as a platform for climate-positive projects in 2022. What’s the idea behind setting up a different vertical, and what are the key milestones achieved so far?

Ans: GPS Renewables started as a technology and EPC company. Setting up ARYA was the next logical step in our growth story, and moving towards project development seemed like a natural progression. In 2022, ARYA was launched as the project development arm of GPS. Initially, ARYA started with project incubation – getting projects investment-ready, structuring and bringing in offtake partners. But it quickly evolved into a complete project development company.

Today, ARYA is one of the largest CBG project development platforms in India. We’re the only bio-fuel company to have formed JV companies, each with IOCL, BPCL and OIL. Further, we are in active discussion with other OGMCs for the formation of JVCs to set up CBG plants. It’s a strong validation for our approach.

We have recently brought in Sojitz Corporation from Japan as a strategic investment partner to invest in IOCL-GPS JVC projects. Construction of nine CBG plants (15 TPD CBG output each) using paddy straw as primary feedstock in the states of Haryana, Uttar Pradesh, Chhattisgarh and Andhra Pradesh is going at full swing.

Que: ARYA recently signed an MoU with the Government of Telangana to set up 15 CBG plants across the state with an INR 2,000 crore investment. Could you walk us through the scope of this initiative, and the timelines for the implementation of the projects?

Ans: The Government of Telangana has taken a very structured and investor-friendly policy-driven approach towards Compressed Biogas and notified the Telangana Clean and Green Energy Policy in January 2025 with a target to set up 1,000 CBG plants in the next five years.

The state is providing a capital grant of INR 1 crore per TPD of CBG output. ARYA has signed an MoU with the Government of Telangana for setting up 15 CBG plants of 15 TPD output capacity each using Agro waste, Napier grass, etc., with a total investment of around INR 2,000 crore.

We’ve requested the State Government to provide subsidised land to set up the plants, and our target is to have all of the CBG plants operational in the next two to three years. It’s a serious commitment, but the policy framework gives us confidence to move quickly.

Que: In Chhattisgarh, ARYA is investing INR 1,350 crore. What makes the state strategically important for your expansion?

Ans: The Government of Chhattisgarh had notified the Chhattisgarh Industrial Development Policy, 2024, which offers a capital grant of up to 30 percent of the total capital investment in CBG plant and machinery. We had submitted an investment proposal to set up 10 CBG plants. Accordingly, the Government of Chhattisgarh offered an invitation to invest to ARYA in the presence of the state’s Chief Minister at an event held in March 2025 in Bengaluru.

Chhattisgarh is an important market for us because of the sheer volume of paddy straw generated there. Most of the paddy straw is burnt in fields; so, turning that into an energy resource is a classic circular economy play. We’ve committed an investment of around INR 1,350 crore to set up 10 CBG plants.

Que: What are the biggest challenges in scaling CBG production across states, and how are you addressing them, especially in areas like feedstock sourcing and infra gaps?

Ans: Feedstock security continues to be a significant challenge in the sector. Agri-residue is seasonal and spread out. To ensure consistent availability, we need long-term partnerships with farmers and aggregators.

To ensure feedstock availability, we have a very strong in-house feedstock aggregation team having hands-on experience for the aggregation of agri-residues and other organic wastes on a continuous and long-term basis. Further, we have signed an MoU with MAHAPREIT (Mahatma Phule Renewable Energy and Infrastructure Technology Ltd.) in Maharashtra to secure press mud from over 50 sugar mills. Technology adaptation is crucial. We believe that a one-size-fits-all approach won’t be feasible for all regions across India. Hence, we have an in-house R&D team that allows us to customise processes and make them much more suitable for local conditions.

Que: How do you evaluate the current policy and regulatory environment for biogas and CBG in India? What changes would you advocate to fast-track adoption?

Ans: There is no doubt that policy support through the Government of India in the last four years has immensely helped the sector in a big way.

The CBG sector is being supported by the central government at all stages, starting from:
• Capital Subsidy to CBG project developers like CFA by GoI and additional capital grant by various State Governments like UP, AP, Telangana, Chhattisgarh and MP, including capital grant for procurement of equipment and machinery for aggregation of Agri residue
• MDA @INR 1500/MT on FOM and LFOM
• CBG blending obligations of 5 percent by FY2028-29 and capital subsidy on the Direct Pipeline Infrastructure scheme
• Off-take of CBG under CBG-CGD Synchro Scheme

A Few Challenges are:
• Availability of feedstock throughout the year, meeting qualitative and quantitative requirements at the right price
• 100 percent monetisation of products and by-products remains a key challenge as on date in terms of
o Limited off-take of CBG and lack of grid connectivity to the trunk line
o Limited off-take of FOM, LFOM and hold off MDA on LFOM
o Non-monetisation of green attributes in the absence of policy

• Double Taxation on the sale of CBG through the CNG Pipeline
• Under-recovery of GST credit

Que: What are your future plans for ARYA in the next 5 years?

Ans: We have planned to set up 100 CBG plants under JVCs with Indian Oil (IOCL), Bharat Petroleum (BPCL) and Oil India (OIL) or standalone basis in the next 3 years. Further, we have big plans to set up Sustainable Aviation Fuel (SAF) plants in the States, which are coming up with SAF Manufacturing Policy offering fiscal and non-fiscal benefits, including Government land to project developers.