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GOVERNMENT OF INDIA
MINISTRY OF PETROLEUM AND NATURAL GAS
RAJYA SABHA
UNSTARRED QUESTION NO-1894
ANSWERED ON-09/03/2025
BIOFUEL AND COMPRESSED BIOGAS PRODUCTION TARGET
1894 DR. ASHOK KUMAR MITTAL:
Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:
(a) the reason biofuel and compressed-biogas production targets remains significantlybehind
schedule, the details thereof;
(b) whether procurement frameworks offered by oil-marketing companies are
economicallyunattractive to producers, if so, the details thereof, if not, the reasons therefor;
(c) the reason farmers supplying biomass faces delayed payments and logisticalconstraints, the details
thereof; and
(d) whether Government will introduce comprehensive reforms to stabilise supply chains, incentivise
production and ensure viability of alternative fuel ecosystems, details thereof?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS
(SHRI SURESH GOPI)
(a) to (d). The promotion of biofuels, including compressed biogas (CBG), is being undertaken
through various initiatives of the Government under the National Policy on Biofuels.
Government has promoted blending of ethanol in petrol under the Ethanol Blended Petrol (EBP)
Programme. The National Policy on Biofuels – 2018, as amended in 2022, inter-alia, advanced the
target of 20% blending of ethanol in petrol from 2030 to Ethanol Supply Year (ESY) 2025–26 (1st
November, 2025 to 31st October, 2026). This target of 20% has been achieved in December, 2025
due to the concerted efforts of Government that have led to increased ethanol blending with petrol
from 38 crore litres in ESY 2013-14 to over 1000 crore litres in ESY 2024-25. Public Sector Oil
Marketing Companies (OMCs) achieved the target of 10% ethanol blending in petrol in June 2022,
i.e. five months ahead of the target during ESY 2021–22. Ethanol blending levels thereafter increased
to 12.06% in ESY 2022–23, 14.60% in ESY 2023–24, and 19.24% in ESY 2024–25.
EBP Programme has resulted in payment to farmers to a tune of over Rs. 1,47,387 crore from Ethanol
Supply Year (ESY) 2014-15 up to January 2026, besides savings of more than Rs. 1,66,971 crore of
foreign exchange, net CO2 reduction of approximately 851 lakh metric tonne and substitution of
more than 283 lakh metric tonnes of crude oil.”The establishment of CBG plants is undertaken by entrepreneurs and other interested entities based
on their techno-commercial assessment of project viability. As per data reported on the GOBARdhan
portal, as of February 2026, a total of 194 CBG projects have been commissioned, while 315 projects
are at various stages of construction.
Biomass used for CBG production and the feedstock supply chain is arranged by project developers.
Reasonswhich hinder the timely implementation of CBG projects include issues related to land
arrangement/allocation, assured and consistent feedstock supply, technology-related constraints, and
limited offtake of by-products such as Fermented Organic Manure (FOM) and Liquid Fermented
Organic Manure (LFOM). In certain cases, resistance from local communities has also affected
project progress.
To address logistical constraint in biomass collection and handling, Government is implementing a
scheme for providing financial assistance for procurement of Biomass Aggregation Machinery
(BAM) by CBG producers.Further, Government is also implementing a scheme on Crop Residue
Management (CRM) under which financial assistance is provided to farmers for purchase of crop
residue management machinery and to Cooperative Societies, FPOs and Panchayats for establishment
of Custom Hiring Centres.
Government, with a view to promoting the setting up of Compressed Biogas (CBG) plants across the
country has adopted a “Whole of Government” approach involving multiple Ministries and
Departments under the GOBARdhan initiative to create an enabling ecosystem for CBG projects.
Measures undertaken includeassured price for off-take of CBG through long term agreements with
Oil and Gas Marketing Companies; provision of Central Financial Assistance under the National Bio-
Energy Programme for CBG/biogas plants; additional Central Assistance for Municipal Solid Waste-
based CBG projects under Swachh Bharat Mission–Urban 2.0; inclusion of bio-manure from CBG
plants as FOM and LFOM under the Fertilizer Control Order, 1985; and Market Development
Assistance to promote organic fertilizers produced from CBG plants.
Further, CBG projects have been considered under the ‘White Category’ (on a case-to-case basis);
included under Priority Sector Lending norms; and supported through dedicated loan products by
various banks and financial institutions. Additional initiatives include issuance of guidelines for
synchronization of CBG with CNG in the CGD network, implementation of a scheme for
Development of Pipeline Infrastructure (DPI) for injection of CBG into the City Gas Distribution
(CGD) network and gas grid, and phased mandatory blending/sale of CBG in the CNG (Transport)
and PNG (Domestic) segments of the CGD network.
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