India introduces an obligation to blend compressed biogas with CNG and PNG: from 1% in 2025/26 to 5% in 2028/29

The National Biofuel Coordination Committee, chaired by Minister of Petroleum and Natural Gas Hardeep Singh Puri, announced in November 2023 an obligation to blend compressed biogas (CBG) with CNG and PNG. The schedule provides for 1% in the 2025–26 financial year, 3% in 2026–27, 4% in 2027–28 and 5% from 2028–29, calculated relative to total gas consumption in transport (CNG) and in households supplied from city networks (PNG).

How the obligation is built

CBG blending is voluntary until the end of the 2024–25 financial year, and becomes mandatory from 2025–26. The obligation applies to the CNG (transport) and PNG (domestic) segments of the city gas distribution (CGD) sector. According to the ministry's release, implementation and monitoring of the obligation will be handled by the Central Repository Body (CRB), on the basis of operational guidelines approved by the Minister of Petroleum and Natural Gas.

Date of announcement

The sources give different dates: the government release and Tribune India are dated 25 November 2023, while the articles by Mercom India and Energetica India bear the date 27 November. As the event date we adopt the date of the release, that is 25 November.

Expected effects

According to the release, the government expects about 37,500 crore rupees of investment and the creation of 750 CBG projects by the 2028–29 financial year. This is an official forecast, not a result that can be verified today on the basis of the number of plants.

Why this is key for the market

An investor in a CBG plant needs a certain gas buyer and a price that allows loans to be repaid. The earlier SATAT programme relied on invitations to oil and gas companies to submit bids by entrepreneurs and on their purchase declarations. The blending obligation shifts part of the burden onto distribution companies and is meant to give producers more predictable demand.

What this means for Poland and Europe

In Poland and the EU, support for biomethane rests on tariffs, auctions and obligations for transport fuels. The Indian approach — a percentage obligation for gas distributors to purchase biogas — is an example of creating demand without direct subsidies for each unit of gas. The challenge lies in enforcement and in ensuring that the purchase price covers production costs.