Biogas Scheme Could Cut India’s Gas Imports by $5B, Avoiding Emissions

India’s energy security challenges have a direct climate dimension—every dollar spent on imported LNG locks in emissions from extraction, shipping, and combustion. The IBA’s forecast that 1,500 biogas plants can cut $5 billion in annual imports represents a potential methane and CO2 abatement with quantifiable climate benefits. By converting agricultural residue and dung into bio-CNG, the scheme turns a potent methane source into a renewable fuel, making it a compelling case study for national circular economies aligned with Paris Agreement goals.

The Indian Biogas Association (IBA) has projected a $5 billion (approximately Rs 42,000 crore) annual reduction in India's liquefied natural gas (LNG) import bill through the scaling up of compressed biogas (CBG) plants under the recently approved GOBARdhan Scheme. With a financial outlay of Rs 23,731 crore (around $2.8 billion), the scheme aims to convert agricultural residue, cattle dung, and municipal organic waste into clean energy and fermented organic manure, establishing a circular bioeconomy at a national scale. The IBA frames this as a strategic investment rather than conventional public expenditure, arguing that its returns will far exceed the initial outlay by cutting the trade deficit, reducing fertiliser subsidies, and stimulating rural economic growth.

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The country’s vulnerability to imported gas is stark: India imported roughly 50% of its natural gas in FY2024-25, spending $15.2 billion on LNG.

The country’s vulnerability to imported gas is stark: India imported roughly 50% of its natural gas in FY2024-25, spending $15.2 billion on LNG. Geopolitical disruptions—particularly the prolonged West Asia crisis and a depreciating rupee—are expected to push the FY2025-26 bill even higher, though official data has yet to be released. The IBA’s conservative assumption of 1,500 fully operational CBG plants in the coming years would displace approximately one-third of current LNG import volumes, delivering that $5 billion in direct savings. This scale would transform the energy import landscape, insulating the domestic economy from volatile international gas markets while improving energy security.

Beyond natural gas, the scheme promises significant reductions in fertiliser imports. Every CBG plant produces Fermented Organic Manure (FOM) and liquid bio-slurry rich in essential plant nutrients. These organic inputs can partially replace chemical fertilisers, especially imported phosphatic and potassic varieties, and also reduce the heavy subsidy burden on urea. Lower fertiliser imports mean improved current account balance and enhanced self-sufficiency in agricultural inputs—a critical factor for a country where farming employs nearly half the workforce.

The environmental dividends are equally substantial. By capturing methane from decomposing agricultural and animal waste that would otherwise be released into the atmosphere, the programme mitigates a potent greenhouse gas. The displacement of fossil-based LNG with biogas further shrinks India’s carbon footprint, aligning directly with its Nationally Determined Contributions under the Paris Agreement. Moreover, the production of bio-slurry as a co-product enhances soil health and organic carbon content, contributing to climate-resilient agriculture.

Socially and economically, the scheme is designed to generate rural employment and entrepreneurship. Decentralised CBG plants create local jobs in waste collection, plant operation, and manure sales, while providing farmers with an additional revenue stream from the sale of crop residue and dung. The IBA argues that this integrated approach—simultaneously addressing energy, waste management, and agricultural productivity—makes the GOBARdhan Scheme a rare intervention that pays back across multiple national priorities.