With Rs 500 crore earmarked for FY 2026–27, Maharashtra aims to fast-track CBG projects and reduce landfill dependence

The Government of Maharashtra’s newly unveiled Compressed Biogas (CBG) Policy 2026 is being hailed by industry stakeholders as one of India’s most ambitious state-level frameworks for advancing the circular economy and accelerating the transition toward sustainable waste-to-energy infrastructure.

(IFGE) has welcomed the policy, describing it as a comprehensive and forward-looking roadmap capable of positioning Maharashtra at the forefront of India’s emerging bioenergy economy.

Designed to convert organic and agricultural waste streams into clean energy, the policy integrates urban waste management, renewable fuel generation, rural livelihood enhancement, and climate mitigation into a unified development strategy. The initiative seeks to reduce landfill dependence, improve sanitation outcomes, and create a commercially viable ecosystem for compressed biogas production across the state.

At the core of the policy lies a strong emphasis on feedstock diversification. By enabling the utilisation of municipal solid waste, agricultural residues, livestock waste, and agro-industrial by-products, the framework aims to ensure long-term raw material security while simultaneously opening new income avenues for farmers, cooperatives, and rural aggregators.

The policy designates Maharashtra’s Urban Development Department as the nodal agency responsible for implementation and institutional coordination. Urban Local Bodies (ULBs) are expected to play a pivotal role in waste segregation, collection, and processing, thereby embedding CBG production directly into municipal solid waste management systems.

To improve commercial viability and attract private investment, the policy introduces an extensive package of financial incentives and infrastructure support measures. Projects will be eligible for Viability Gap Funding (VGF) of up to Rs 75 lakh per tonne per day (TPD), subject to a ceiling of Rs 15 crore per project. A dedicated allocation of Rs 500 crore has been earmarked for FY 2026–27 to catalyse sectoral growth and accelerate project deployment.

In addition, developers will receive a 2.5 per cent SGST reimbursement following project commissioning, while concessional land allotment through ULBs will be facilitated at 0.7 per cent of the Ready Reckoner rate. Land allocation norms envisage approximately one acre per tonne of processing capacity, with project sizes ranging between one and 20 acres.

The framework also accords CBG projects priority infrastructure status, enabling easier access to critical utilities such as electricity and water. A single-window clearance mechanism, supported by district-level facilitation cells, has been introduced to streamline approvals and improve ease of doing business.

To address one of the sector’s most persistent challenges — feedstock aggregation and supply consistency — the policy proposes clearly defined catchment zones, long-term supply agreements, and institutional support for Farmer Producer Organisations (FPOs) and cooperative societies. These entities are expected to function as decentralised waste aggregation centres, strengthening rural participation in the emerging bioenergy value chain.

The policy further encourages cluster-based development in biomass-rich regions and promotes Public-Private Partnership (PPP) models for project implementation. Developers will be selected through competitive bidding mechanisms linked to waste processing charges proposed to ULBs.

Importantly, the initiative aligns Maharashtra’s bioenergy ambitions with national flagship programmes including SATAT, GOBAR-Dhan, the Swachh Bharat Mission, and the National Bioenergy Mission, thereby strengthening policy convergence and implementation potential.

Beyond fuel generation, the framework also focuses on value-added by-products such as bio-fertilisers, whose distribution is proposed through registered agricultural sale centres. A dedicated monitoring architecture based on key performance indicators — including gas output, waste processing efficiency, and carbon emission reduction — is expected to underpin long-term implementation and accountability.

Industry stakeholders believe the policy could emerge as a critical catalyst for scaling India’s compressed biogas ecosystem, particularly in agriculture-intensive and sugar-producing regions where biomass availability remains high and industrial synergies are significant.

With its blend of fiscal incentives, institutional support, feedstock security mechanisms, and integrated waste management planning, Maharashtra’s CBG Policy 2026 is widely being viewed as a decisive push toward cleaner energy systems, stronger rural economies, and a more resilient circular economy framework.