Decode : Chapter 2 – A Discussion on Bio-CNG

We at Cleantech Hero are excited to invite valuable insights from Vivek Sharma, Principal Analyst – Powertrain Forecasting, India at S&P Global Mobility, on the current stance of Bio-CNG in India, alongside his thoughts on future possibilities.

Bio-CNG in India: Accelerating the Clean Mobility Transition

As India intensifies its push towards sustainable mobility and reduced dependence on fossil fuels, Bio-CNG (Compressed Biogas) is rapidly emerging as a promising alternative fuel. With the dual advantage of addressing the country’s mounting waste management challenges and supporting its clean energy transition, Bio-CNG sits at the confluence of environmental, economic, and agricultural priorities.

One of the key advantages of Bio-CNG lies in its significant environmental impact. Beyond reducing tailpipe CO₂ emissions, it also enables the capture and utilisation of methane—a greenhouse gas nearly 28 times more potent than CO₂—delivering substantial lifecycle emissions reductions. The quantification of carbon savings, particularly from upstream methane avoidance through the use of agricultural and municipal feedstocks, makes a strong case for Bio-CNG from a policy perspective.

India, while not currently a part of the Global Methane Pledge (GMP) launched at COP26, has made a strong climate commitment to achieving net zero by 2070. Methane reduction through Bio-CNG production provides an impactful and pragmatic pathway for India to move toward these climate goals, especially given its abundant supply of biodegradable waste and rising demand for clean transport energy. The following elaborates key facets of the Bio-CNG ecosystem in India:

1. Policy & Regulatory Framework

Recognising Bio-CNG’s potential to support clean mobility and waste-to-energy goals, the Government of India has introduced several targeted initiatives:

SATAT (Sustainable Alternative Towards Affordable Transportation)

A significant policy for Bio-CNG, SATAT aims to create a nationwide ecosystem by supporting entrepreneurs in setting up plants and selling Bio-CNG to Oil Marketing Companies for transport and industrial use. It also promotes the use of byproducts like fermented organic manure.

GOBAR-Dhan Scheme

Anchored in the Swachh Bharat Mission (Grameen), this scheme supports cluster-level biogas plants in rural areas with financial aid of up to ₹50 lakh per district, encouraging decentralized waste-to-energy solutions.

Waste to Energy (WTE) Programme

Implemented under the National Bioenergy Programme, WTE supports Bio-CNG production from urban, industrial, and agricultural waste with central financial assistance, backed by a budget outlay of ₹600 crore (2021–2026).

Market Development Assistance (MDA) Scheme

Focused on promoting the uptake of organic fertilisers from GOBAR-Dhan and Bio-CNG plants, the MDA offers ₹1,500 per metric tonne of fermented organic manure, strengthening the business case for Bio-CNG byproduct utilisation.

Green Credit Programme (2023)

Though still evolving, this initiative aims to reward climate-positive actions. If Bio-CNG is included under eligible activities, it could further incentivise production by offering tradable environmental credits.

2. Fuel Availability & Production Potential

India has an abundant biomass base, producing over 500 million tonnes of agricultural residue, food waste, and municipal solid waste annually—a massive untapped feedstock reservoir for Bio-CNG production. Currently, however, the number of large-scale, commercially operational Bio-CNG plants is limited. The transition from pilot to production scale has been slow due to technical and financial hurdles, but ongoing investment and increasing policy focus are accelerating growth in this space.

3. Vehicle Category Acceptance

Bio-CNG is compatible with existing CNG vehicle platforms, making it a near drop-in alternative. It’s being adopted in three-wheelers, city buses, and light commercial vehicles (LCVs), with OEMs offering factory-fitted CNG vehicles that can run on Bio-CNG without modification. Cities like Pune and Indore have seen successful deployment of Bio-CNG in municipal buses and garbage collection fleets.

There’s a growing interest in applying Bio-CNG to heavy-duty commercial vehicles (HCVs), though issues like higher torque requirements, engine compatibility, and fuel infrastructure need resolution.

4. Advantages Over Conventional Fuels

Bio-CNG offers up to 20% lower greenhouse gas emissions compared to fossil-based CNG, and significantly cleaner tailpipe emissions than diesel and petrol, which are major contributors to urban air pollution. Vehicles running on Bio-CNG emit lower levels of particulate matter (PM), nitrogen oxides (NOx), and sulphur oxides (SOx) compared to diesel, and generate virtually no carbon monoxide or unburned hydrocarbons relative to petrol. This translates to healthier air quality, especially in urban centres struggling with vehicular emissions.

Additionally, Bio-CNG’s production from organic waste captures methane—a potent greenhouse gas—thus preventing its release into the atmosphere, while also curbing landfill expansion and air pollution from crop residue burning. This positions Bio-CNG as a true circular economy enabler, transforming waste streams into clean, usable fuel.

Furthermore, by reducing India’s dependence on imported natural gas and crude oil, Bio-CNG enhances energy security. Its decentralised production model promotes rural entrepreneurship, strengthens local economies, and aligns with national goals of inclusive growth and sustainable development.

5. Challenges to Adoption

Despite strong fundamentals, Bio-CNG faces structural and operational challenges. Feedstock logistics remain inefficient, and building plants is capital-intensive, requiring long-term financing and technical know-how. Limited fuel dispensing infrastructure restricts scalability. OEMs and fleet operators also express concerns around fuel quality, consistency, and engine performance on Bio-CNG, especially in demanding commercial applications.

6. Outlook

In 2023, the National Biofuels Coordination Committee, chaired by Petroleum Minister Hardeep Singh Puri, announced the phased blending of compressed biogas (CBG) with compressed natural gas (CNG) for transportation, and piped natural gas (PNG) for households, starting from the financial year 2025-26. The target is to achieve a 5% blending rate by 2028-29. According to the petroleum ministry, CBG blending in total CNG and PNG consumption is set at 1% in 2025-26, increasing to 3% in 2026-27 and 4% in 2027-28.

Looking ahead, Bio-CNG is well-positioned to become a critical pillar of India’s clean mobility roadmap. With increasing environmental consciousness, favourable policies, and investment momentum, its use is expected to grow, particularly in urban and regional transport sectors. As infrastructure scales and costs reduce, Bio-CNG can offer a compelling, sustainable fuel alternative across multiple vehicle segments—contributing to India’s energy transition and net-zero ambitions.

Final comments by Vivek:

“Bio-CNG stands at the intersection of India’s clean mobility vision and its circular economy aspirations. It not only helps reduce tailpipe CO₂ emissions but also captures and utilises methane—a highly potent greenhouse gas—offering deep environmental gains across the value chain.”

“The Indian government has played an instrumental role in accelerating this transition through forward-looking policies like SATAT and GOBAR-Dhan, which support decentralised renewable fuel production while also enabling rural development and sustainable waste management.”

He further adds, “With India’s natural gas consumption rising rapidly, and import dependence increasing, CNG prices are becoming more vulnerable to global fluctuations. For instance, the domestic natural gas price was recently increased to $6.75 per MMBtu for April 2025—a 4% jump from the previous month. This reinforces the case for accelerating Bio-CNG adoption, which can help reduce exposure to import volatility and support price stability in the long run.”

“OEMs like Maruti Suzuki & Tata Motors, are already working on integrating Bio-CNG compatibility into their factory-fitted CNG models, a move that reflects growing industry confidence in the fuel’s potential. As production ramps up and infrastructure improves, Bio-CNG could emerge as a critical enabler for sustainable mobility, especially in commercial fleets and intra-city transport,” concludes Vivek.

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