India Launches $2.5 Billion Biogas Program Amid LNG Supply Disruptions

India has launched a $2.5 billion program to boost production of compressed biogas (CBG) in an effort to improve energy security and reduce reliance on liquefied natural gas (LNG).

The initiative, which will run for 10 years under the National Circular Bioenergy Scheme, aims to increase CBG production tenfold. The plan is a response to disruptions in LNG supplies caused by the closure of the Strait of Hormuz, through which India imports around 50-60% of its LNG.

CBG, also known as bio-CNG, is made from organic waste such as cattle dung and crop residue, and undergoes purification before it can replace LNG. The leftover waste can be used as manure.

The government has set blending targets for CBG at 3% in the first year, increasing to 5% by FY29. City gas distribution companies will be required to procure CBG to meet these targets, which apply to both CNG used in transportation and piped natural gas supplied to households.