India Waives Excise Duty on Blended Biogas
Analysis based on 8 articles · First reported Feb 22, 2026 · Last updated Feb 22, 2026
The excise duty waiver on Biogas blended with Compressed Natural Gas (CNG) is expected to unlock significant investments in India's clean energy sector, particularly in Biogas production. This policy change will reduce fuel costs for City Gas Distribution (CGD) companies, stabilize consumer prices, and provide predictable revenue streams for Biogas producers, positively impacting the renewable energy market.
The Indian government, through its Union Budget 2026, has announced an excise duty waiver on Compressed Biogas (CBG) when blended with Compressed Natural Gas (CNG). This policy aims to accelerate India's energy transition towards its 2070 Net Zero target and boost private investment in the biogas sector. The Indian Biogas Association (IBA) estimates that this waiver could unlock investments of up to Rs 1 lakh crore, with an initial Rs 45,000-55,000 crore if a 5% biogas blending level is achieved nationwide over the next five years. The waiver makes CBG more cost-effective, benefiting City Gas Distribution (CGD) companies with lower fuel costs, consumers with stable or reduced prices, and producers with guaranteed sales. This initiative is also expected to improve project internal rates of return for CBG plants, making previously marginal projects financially viable and contributing to significant reductions in greenhouse gas emissions.
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