India's Union Budget 2026 Waives Excise Duty on Biogas Blending, Unlocking ₹1 Lakh Crore Investment Potential
The Indian Biogas Association (IBA) reports that the excise duty waiver on compressed biogas (CBG) blended with compressed natural gas (CNG) in the Union Budget 2026 could unlock investments of up to ₹1 lakh crore. A 5% blending level nationwide could require 2.5-3 MMTPA of CBG, leading to investments of ₹45,000-55,000 crore. If blending reaches 7-8% by 2032, the investment potential may double. The policy aims to enhance energy security, reduce greenhouse gas emissions, and improve financial viability for CBG projects.
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The Union Budget 2026's excise duty waiver on compressed biogas (CBG) blended with compressed natural gas (CNG) could unlock investments of ₹1 lakh crore, according to the Indian Biogas Association (IBA). The IBA estimates that a 5% blending level across city gas distribution (CGD) networks would necessitate 2.5-3 MMTPA of CBG, translating to ₹45,000-55,000 crore in investments.
With a clear policy, blending could rise to 7-8% by 2032, doubling the investment potential. The waiver corrects a tax imbalance favoring fossil fuels and is expected to lower fuel costs, stabilize consumer prices, and enhance project bankability. India's CBG potential reaches 60 million tonnes annually, with significant emissions reduction capabilities, potentially lowering CO2 emissions by 12-15 million tonnes per year.
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