New Delhi: India’s transition towards cleaner fuels could unlock a massive investment opportunity of nearly Rs 1 lakh crore in the biogas sector, according to a new report released on Tuesday.
The report by fintech platform smallcase stated that India has a theoretical compressed biogas (CBG) production capacity of around 62 million metric tonnes annually. However, current production remains below 1 per cent of this potential, highlighting a significant untapped domestic energy opportunity.
The report noted that agricultural residue, cattle waste, municipal solid waste, and industrial byproducts are increasingly being recognised as valuable energy resources that can help reduce India’s dependence on imported fossil fuels.
According to Karthick Jonagadla, government initiatives such as SATAT (Sustainable Alternative Towards Affordable Transportation) and the mandatory CBG blending roadmap are expected to drive major growth in the sector.
More than 130 CBG plants have already been commissioned under the SATAT initiative, while over 1,000 additional projects are currently in the pipeline. The report added that blending obligations are expected to rise gradually in the coming years, creating long-term demand for producers and infrastructure developers.
The move from voluntary adoption to mandatory blending is being viewed as a major turning point for the industry, as it improves commercial viability and offers greater demand certainty.
Jonagadla said the shift from policy encouragement to mandatory blending significantly changes the economics of the sector, giving infrastructure developers, technology providers, and institutional investors more confidence to invest.
The report further highlighted that India’s increasing dependence on imported crude oil has become a major structural economic challenge, while biogas and compressed biogas are emerging as practical domestic alternatives.
Recent government measures, including excise duty waivers on CBG blended with CNG and higher procurement prices, are also expected to improve project viability and encourage greater private-sector participation.
The opportunity is expected to benefit not only standalone biogas producers but also multiple players across the energy and infrastructure ecosystem.
Major oil marketing companies such as Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, and Bharat Petroleum Corporation Limited are increasingly investing in biogas projects and long-term supply networks.
The report added that gas utilities and city gas distribution companies are also likely to benefit as blending requirements increase and pipeline integration improves.
With inputs from IANS