Metro India News | new delhi

The Indian Biogas Association (IBA) has recommended a Rs 10,000 crore fund to provide capital subsidy for the biogas sector in the upcoming Union Budget. The body has also proposed increasing the subsidy by 50 per cent to Rs 6 crore per 4.8 TPD of Compressed Biogas (CBG) and raising the project cap to Rs 25 crore.

IBA plans to share its recommendations with the Ministries of Finance and New & Renewable Energy. The association has highlighted the need for deeper fiscal support, faster implementation, and easier financing to attract large-scale private investment and create rural income opportunities.

The association also proposed a phased mandate for fermented organic manure (FOM) blending in fertiliser use—5 per cent by 2028 and 10 per cent by 2030. It suggested redirecting a portion of the Rs 2 lakh crore chemical fertiliser subsidy toward FOM-linked incentives to improve soil health, reduce imports, and promote climate-smart agriculture.

IBA urged scaling up project incentives, noting that CBG plant capex has increased over 50 per cent since the 2014 Central Financial Assistance scheme. It also recommended introducing an FOM–Chemical Fertilizer Blending Obligation and allowing biogas producers to monetise carbon credits through domestic and international markets.

According to IBA, carbon trading could generate Rs 4,000 crore for around 1,000 CBG plants by 2030, while enhancing financial viability and helping India meet climate targets. The association suggested “cap and trade” practices and partial government support for carbon premium pricing to kick-start the mechanism.