Provides a full central excise exemption for biogas blended CNG, marking a significant step toward clean energy adoption, farm waste utilisation, and rural economic development.

The move is expected to strengthen the biogas-to-CNG value chain, reduce energy costs, and create additional income streams for farmers and rural entrepreneurs.

Strengthening the Biogas-CNG Value Chain

Exempting biogas-CNG from central excise lowers production costs and improves competitiveness relative to fossil fuels. This incentivises investment in biogas plants, upgrading infrastructure, and distribution networks, enhancing the viability of a sustainable energy ecosystem linked to agro-residues, cattle dung, and organic waste.

Linking Agriculture to Energy

The reform integrates agricultural by-products into a market-oriented energy value chain, turning farm and livestock waste into economic assets. Farmers supplying raw materials to biogas plants can secure additional income, while rural energy enterprises can expand production and distribution, creating employment and entrepreneurship opportunities in agrarian communities.

Environmental and Economic Payoff

Beyond financial incentives, the exemption encourages green energy adoption, lower carbon emissions, and reduced dependence on imported fossil fuels. By monetising agricultural waste through the biogas-CNG chain, Budget 2026 simultaneously delivers energy security, rural livelihoods, and climate co-benefits.

Strategic Outlook

Budget 2026 positions biogas-CNG as a scalable, clean energy solution, linking rural agricultural production with industrial and urban energy consumption. This excise exemption is expected to accelerate investment, commercialisation, and adoption of bioenergy, reinforcing India’s dual objectives of sustainable agriculture and renewable energy leadership.