Uttar Pradesh, Madhya Pradesh, and Gujarat lead the policy landscape as experts call for stronger operational support, real-time monitoring, and skilled workforce development

As India accelerates efforts to build a robust compressed biogas (CBG) ecosystem, experts are increasingly pointing to the crucial role of state-level policy frameworks in determining whether projects move from paper to implementation. Strong policies that address both capital investment and operational challenges are essential for scaling the bioenergy sector across the country.

Speaking on the evolving policy landscape, Shobhit Shrivastava, Program Manager at the Centre for Science and Environment, emphasized that effective state-level interventions are critical to ensuring the growth of the bioenergy industry.

“Without strong state-level policy support, projects do not move on the ground,” Shrivastava noted, highlighting that several Indian states have already introduced dedicated bioenergy frameworks to support compressed biogas development.

Among the states that have taken significant policy initiatives are Uttar Pradesh, Bihar, Andhra Pradesh, Chhattisgarh, and Punjab, all of which have implemented targeted policies to promote bioenergy projects.

According to Shrivastava, evaluating state policies for compressed biogas requires careful consideration of both capital expenditure and operational expenditure components. While capital investment in CBG plants is significant, operational costs often exceed capital costs over the lifetime of the project, making long-term policy support essential for maintaining financial viability.

In this context, Uttar Pradesh stands out as one of the most unique policy frameworks in the country. Unlike most states that offer incentives as a percentage of eligible fixed capital investment, Uttar Pradesh provides a distinct support model that includes land allocation at Rs 1 per acre for up to 30 years, creating a highly attractive environment for project developers.

The state has also introduced long-term tax incentives that strengthen project economics. Alongside Uttar Pradesh, Chhattisgarh has also provided one of the longest timelines for tax relief among state bioenergy policies.

Policy design in several states has also expanded to address critical infrastructure requirements. Uttar Pradesh and Madhya Pradesh have incorporated detailed provisions for infrastructure development within their bioenergy policies, reflecting a broader understanding of the logistical needs of CBG projects. In addition, states such as Uttar Pradesh, Madhya Pradesh, and Haryana have introduced the concept of defined catchment areas to ensure consistent feedstock supply for biogas plants.

Other states are focusing on different aspects of financial support. The bioenergy policy of Gujarat, for instance, primarily emphasizes operational assistance, offering support of up to Rs 25 crore for eligible projects. Meanwhile, Telangana has introduced significant financial backing for project financing by providing up to 75 percent intervention on term loans, helping developers access capital more easily.

Energy-related incentives also vary across states. Assam currently offers one of the longest guaranteed power subsidies under its policy framework, providing long-term operational stability for bioenergy developers.

Another emerging area of focus is workforce development. As the bioenergy sector expands, the need for skilled manpower to operate and maintain compressed biogas facilities is becoming increasingly important. States such as Bihar and Chhattisgarh have incorporated capacity-building initiatives into their bioenergy policies to address this challenge.

Some states are also working to strengthen market linkages for by-products generated from CBG plants. Madhya Pradesh, for example, has mandated the sale of bio-digested organic manure through fertilizer retail outlets, creating structured market access for plant operators.

These policy variations reflect the evolving nature of India’s bioenergy ecosystem. According to Shrivastava, Uttar Pradesh, Madhya Pradesh, and Gujarat currently stand out as the top three state policies in the bioenergy sector, owing to their comprehensive incentive structures and implementation frameworks.

Despite the progress made through state-level initiatives, the overall scale of the industry remains relatively limited. India currently has approximately 194 operational compressed biogas plants, but one of the major challenges facing the sector is the absence of real-time data monitoring systems that can track plant performance, feedstock utilization, and production output across the country.

Shrivastava emphasized that strengthening operational support mechanisms will be critical for the sector’s future growth. Expanding operational expenditure support under state policies, implementing comprehensive real-time monitoring systems, and ensuring greater operational transparency could significantly improve the sector’s performance.

He also underscored the importance of aligning policy formulation with implementation, noting that effective policies must be supported by robust execution mechanisms.

“Implementation and formulation of policy should go hand in hand,” Shrivastava said, stressing that coordinated action between governments, industry stakeholders, and project developers will be essential for scaling India’s compressed biogas ecosystem in the years ahead.

— Suchetana Choudhury (suchetana.choudhuri@agrospectrumindia.com)