Can biogas help India’s energy security?

Tensions in West Asia continue to keep global energy markets on edge. India imports nearly 85% of its crude oil needs, much of it from West Asia, and supplies have faced disruptions due to the war between Israel, the US and Iran. While the government has diversified its crude oil suppliers, around 90% of India’s LPG imports still go through the Strait of Hormuz, so any instability in the region poses a potential risk to India’s energy security.

Over the years, India has pushed several initiatives to promote alternative fuels such as compressed biogas to reduce dependence on imported fuel, address agricultural waste, and boost rural incomes. But despite ambitious targets and political support, progress is limited.

Searching for an alternative fuel

Biogas is a mixture of methane, CO2 and a small amount of other gases produced by anaerobic digestion of organic matter. It can be processed and compressed to produce compressed biogas (CBG). It is chemically identical to CNG; renewable, carbon neutral and can be produced from waste. It can be used directly to generate electricity, heating or as an energy source for cooking.

India has also been trying to add biogas to its gas supply for at least a decade. This push gained momentum in 2018 when the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative was launched with the goal of building 5,000 plants by 2023. As of June 3, 2026, only 132 are complete.

The Center has launched GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) program to increase CBG production. Under this ‘waste to wealth’ scheme, the government has offered grants of up to ₹ 50 lakh per district for community biogas plants. ₹564 million has been earmarked for the purchase of biomass harvesting machines, while ₹994 million has been allocated to build pipelines connecting the biogas plants directly to the gas grid.

However, progress on the ground remained limited. A lack of infrastructure, weak private investment, difficulty accessing formal credit, and the high initial cost of technology have stalled progress. Financial support from the government can make biogas projects economically viable. Other incentives such as accelerated depreciation and tax holidays would also help attract private players.

Influence on cultivation patterns

Biogas development is uneven across the world, with Europe, China and the United States accounting for 90% of global production.

Germany is one of the largest producers in Europe, along with France, Denmark and the United Kingdom. A positive for the sector came in 2000 when Germany introduced the Renewable Energy Act to stimulate production. Over the years, it has introduced schemes that guaranteed producers an income, provided bonuses to help operators increase their income, and supported small biogas plants. However, the country’s push for biogas triggered a “corn mania” where corn cultivation skyrocketed because it was highly profitable for farmers. Corn slowly began to replace other food crops. More than a decade later, the government was forced to step in and control this by imposing a cap on the use of maize in biogas plants.

This danger hits close to home. The Economic Survey 2026 noted that maize cultivation has increased sharply in India, which may affect crop diversity and food security. It noted that while the national yield of maize increased from about 2.56 tonnes per hectare in FY16 to about 3.78 tonnes per hectare by FY25, yields of soybean, sunflower, canola, groundnut and millet, among other crops, were either stagnant or declining.

While this trend can be attributed to technological advances, the price of ethanol may be an important factor.

The government sets regulated ethanol prices per liter based on the feedstock used. The price of corn-based ethanol is higher, while the price of rice-based ethanol is lower. The price of molasses-based ethanol is fixed. Between FY22 and FY25, the administered price of corn-based ethanol grew at a compound annual growth rate (CAGR) of 11.7%, making corn more lucrative for farmers.

While maize cultivation and production area jumped between FY22 and FY25, pulses production fell, while oilseeds and other cereals saw only modest growth. This shift is visible in states like Maharashtra and Karnataka, where maize competes with pulses, oilseeds, soybeans, millet and cotton for land, water and labour.

India imports large quantities of pulses and edible oils to meet the demand. Instead of focusing on increasing production, government policy may inadvertently discourage farmers from growing them. Over time, this could increase India’s dependence on imports and expose domestic food prices to greater volatility during supply shocks.

Denmark, which aims to use only biomethane in its gas system by 2030, offers a solution. The government has discouraged the use of crops as input, and the primary source is livestock manure and agricultural waste.

Government action plan

In 2023, the National Coordinating Committee for Biofuels approved the mandatory blending obligation. Gas distributors have been mandated to mix CBG in their supplies since FY26. It would start at 1% and rise to 5% by FY29. In her Budget speech in February 2024, Finance Minister Nirmala Sitharaman said the gradual blending of CBG into CNG for transport and piped natural gas for domestic use “will be mandated”.

To meet these goals, the government is speeding up the establishment of plants. In August 2025, while answering a question in the Lok Sabha, Minister of State Shripad Yesso Naik said, “A total of 36 medium-sized biogas plants have been installed under the MNRE Biogas Program during the last three years.

The question is whether the government can replicate India’s program of blending ethanol with CBG. In 2014, only 1.5% of gasoline was blended with ethanol. It reached 20% by December 2025, five years ahead of the original 2030 target.

Published – 14 July 2026 07:00 IST