Chhattisgarh CG-CBG Policy 2026: New State Biogas Policy, Subsidies & Investment Guide

On 23 June 2026, the Chhattisgarh Cabinet approved a dedicated Compressed Biogas policy — the CG-CBG Policy 2026. It was subsequently notified in the State Gazette on 10 July 2026 and remains effective until 31 March 2030.

Chhattisgarh becomes one of the first Indian states to enact a standalone CBG policy, separate from the national SATAT and GOBARdhan frameworks. For CBG plant developers and investors evaluating state-level opportunities, this policy creates a defined implementation structure and a dedicated nodal agency — two elements that have been missing from most state-level CBG development until now.

Why Chhattisgarh Moved on a Dedicated CBG Policy

Most CBG development across India currently operates through the central SATAT framework — developers apply for offtake agreements from oil marketing companies at the national level, without a state-level policy layer underneath. This works for private entrepreneurs with project development experience, but it leaves a gap: states with significant biomass resources but limited investor familiarity do not get the pipeline of projects the feedstock potential would justify.

Chhattisgarh has that gap. The state generates substantial agricultural residue, cattle dung, municipal solid waste, and agro-processing organic waste — all viable CBG feedstocks. The CG-CBG Policy 2026 is designed to convert that latent resource potential into active project development by creating state-level support infrastructure, a defined nodal agency, and a policy framework that investors can rely on through March 2030.

Policy Objectives

The CG-CBG Policy 2026 states the following objectives:

Converting agricultural residue into CBG fuel rather than leaving it to decompose or be burned in fields. Utilising cattle dung from the state's rural and dairy sector as a primary anaerobic digestion feedstock. Processing municipal solid waste from urban local bodies into biogas, addressing both urban waste management and energy production simultaneously. Using industrial organic waste and agro-processing effluent as supplementary feedstock. Reducing greenhouse gas emissions from biomass decomposition and open burning. Promoting scientific waste management practices across the state. Increasing farmer income through biomass and dung aggregation payments. Generating rural employment across the biomass collection, plant operation, and organic fertiliser distribution segments. Producing organic bio-manure alongside CBG — ensuring that the digestate by-product reaches farmers as a soil amendment rather than being treated as waste.

These objectives are consistent with the national CBG agenda under SATAT and GOBARdhan but provide a state-specific implementation mandate rather than leaving projects entirely to central scheme structures.

Eligible Feedstocks

The CG-CBG Policy 2026 covers the following biomass feedstocks for use in eligible plants:

Crop residue including paddy straw, wheat straw, and other agricultural waste generated across Chhattisgarh's farming districts. Cattle dung from dairy and livestock operations — the most consistently available feedstock in rural settings. Poultry litter from commercial poultry operations. Municipal solid waste, specifically the organic fraction collected by urban local bodies. Food waste from commercial and institutional generators. Agro-processing waste from rice mills, dal mills, oil expellers, and similar agri-industry operations. Organic industrial waste from eligible manufacturing and processing facilities.

The breadth of eligible feedstocks gives plant developers significant flexibility in structuring their biomass supply chains — particularly in mixed-use zones where a single plant can draw from multiple local sources rather than depending on one feedstock category.

Eligible Project Types

The policy covers four categories of CBG project:

Greenfield CBG plants — new plants developed from scratch on sites selected by the developer under the policy framework. This is the primary category for new investors entering the state.

Existing operational plants — plants already commissioned and producing CBG that wish to register under the CG-CBG Policy 2026 to access state-level support and facilitation benefits.

Expansion of existing plants — capacity additions at plants already operational in the state, enabling developers who have established their first unit to scale under the same policy umbrella.

Public-Private Partnership (PPP) projects — plants developed jointly with state agencies, urban local bodies, or cooperative institutions as co-implementing partners. This category is particularly relevant for municipal solid waste-based plants where urban local bodies are the primary feedstock aggregators.

The inclusion of existing plants and expansions — not just new greenfield projects — is a meaningful design choice. It signals that the policy is intended to support the full CBG development lifecycle, not just attract new entrants.

Implementation Structure

Nodal Agency: Chhattisgarh Biofuel Development Authority (CBDA)

All CG-CBG Policy implementation is routed through the Chhattisgarh Biofuel Development Authority. CBDA is responsible for receiving and processing project applications, coordinating between project developers and relevant state departments, and overseeing compliance with policy conditions.

A single nodal agency is operationally significant. One of the most cited friction points in CBG project development across India is the need to interface with multiple departments — energy, environment, agriculture, urban development, and district administration — without a clear coordination point. The CBDA structure is designed to reduce that friction.

Operational Guidelines

The State Energy Department is responsible for issuing operational guidelines under the policy. These guidelines will specify the detailed conditions for land allocation, project approval procedures, feedstock aggregation protocols, and coordination with local bodies. Developers should track CBDA communications for the release of these guidelines, as they will determine the practical implementation process for greenfield applications.

State Support Provided

The CG-CBG Policy 2026 provides the following categories of support to eligible projects:

Land allocation — subject to applicable state land rules, CBDA will facilitate land access for eligible projects. This is particularly relevant for greenfield plants in rural districts where identifying and securing suitable sites is a common early-stage bottleneck.

Promotion of private investment — the policy framework explicitly positions Chhattisgarh as open to private CBG investment, with CBDA responsible for facilitating investor engagement rather than restricting it to public sector players.

Waste aggregation and supply facilitation — state support for organising biomass and organic waste collection from dispersed rural and urban sources, including coordination with farmers, panchayats, and urban local bodies for feedstock supply chain development.

Scientific waste collection — promotion of structured waste collection systems rather than ad-hoc sourcing, improving feedstock consistency for plant operators.

Coordination with local bodies — CBDA will coordinate with gram panchayats, nagar panchayats, and urban local bodies to support feedstock supply, land access, and community engagement for CBG projects.

Facilitation of project approvals — single-window type facilitation for the multiple clearances required before a CBG plant can commence construction and operations.

Development of rural bio-economy — a broader stated goal of integrating CBG plant development with rural economic development, including organic fertiliser distribution, farmer income support, and rural employment generation.

Capital Assistance and Feedstock Security

For capital assistance, the CG-CBG framework draws on Chhattisgarh's Industrial Development Policy 2024–2030. Under this structure, new and expanding CBG plants can access support of up to 100% of fixed capital investment, with developers choosing between two routes: Net State GST reimbursement for up to 12 years, or a Fixed Capital Investment Subsidy of 30% of plant and machinery investment paid over six years. There is also provision for an interest subsidy covering 50% of interest or 6% (whichever is lower) for 5 years, capped at ₹20 crore per year.

A distinctive feature of the Chhattisgarh approach is its feedstock security mechanism. To prevent plants from over-competing for the limited waste available in any single area, the policy caps how much biogas capacity can be registered in a district at 80% of what that district can actually supply. This district-level cap is designed to protect the feedstock viability of plants once they are operational — a challenge that has undermined CBG projects elsewhere when too many plants chase the same limited biomass.

To further secure supply, the agriculture department is tasked with establishing at least one farmer group in every catchment area to collect and store biomass. Grain markets, sugar mills, and the animal husbandry department are expected to sign long-term supply agreements with CBG plants, and farm waste purchased through grain markets is structured to avoid the usual market fees — reducing feedstock cost for plant operators.

This combination of capital support and structured feedstock security is what distinguishes the Chhattisgarh model from a simple facilitation policy. It addresses both the upfront capital barrier and the ongoing operational risk that most commonly undermines CBG plant viability.

National Schemes Available Alongside CG-CBG Policy

Projects in Chhattisgarh under the CG-CBG Policy 2026 remain eligible — subject to meeting individual scheme criteria — for the following central government programmes:

SATAT (Sustainable Alternative Towards Affordable Transportation) — long-term CBG offtake agreements from IOCL, BPCL, and HPCL under the Ministry of Petroleum and Natural Gas. This is the primary revenue security mechanism for most CBG projects in India.

GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) — central scheme for rural biogas development using cattle dung and agricultural waste, administered through the Department of Drinking Water and Sanitation.

CBG Blending Obligation (CBO) — the mandatory CBG blending requirement for city gas distribution companies and CNG retail networks, which creates guaranteed local offtake demand for CBG produced near existing gas infrastructure.

Development of Pipeline Infrastructure (DPI) — central support for CBG pipeline connectivity, relevant for plants looking to supply gas distribution networks rather than selling only in cylinders.

Special Assistance to States for Capital Investment (SASCI) — reform-linked capital investment support where applicable to CBG sector reforms.

Stacking state-level CG-CBG Policy benefits with these central scheme supports is where the financial case for Chhattisgarh CBG projects becomes strongest — developers should evaluate eligibility for each layer of support during project planning.

What This Means for Plant Developers and Investors

A standalone state CBG policy with a defined nodal agency and a validity period through March 2030 provides the policy certainty that project financing institutions require. Banks and impact investors evaluating CBG projects need to know that the state-level support framework will remain in place through the loan tenure — the CG-CBG Policy 2026's fixed validity addresses this directly.

For developers already evaluating Chhattisgarh, the policy removes one layer of uncertainty: you now have a defined agency to engage with, a stated list of eligible feedstocks and project types, and a public commitment from the state government to facilitate approvals and land access. This is meaningfully different from operating under national schemes alone in a state without its own policy framework.

Chhattisgarh's biomass resource base — agricultural residue from paddy and other crops, cattle dung from its rural population, municipal waste from growing urban centres, and agro-processing waste from its rice and dal milling industry — makes it a viable location for both small cooperative-scale and larger commercial CBG plants.

Planning a CBG Project in Chhattisgarh?

If you are evaluating a CBG plant under the CG-CBG Policy 2026 — including feedstock assessment, financial modelling, CBDA registration, or SATAT offtake structuring — Peltra Energy offers project consultation starting at ₹25,000.

Visit pelletrates.com/consultation to discuss your project requirements.

Last updated: July 22, 2026. Data sourced from the Chhattisgarh Cabinet approval announcement (23 June 2026), Chhattisgarh State Gazette notification (10 July 2026), Chhattisgarh Industrial Development Policy 2024–2030, Centre for Science and Environment (CSE) analysis of state bioenergy policies, and SATAT/GOBARdhan programme documentation from the Ministry of Petroleum and Natural Gas. Developers should verify current applicable rates and conditions with the Chhattisgarh Biofuel Development Authority (CBDA) before project planning.