India and Japan Launch CBG Initiative to Build 1,000 Cooperative Biogas Plants by 2030

On July 3, 2026, the governments of India and Japan jointly launched the India-Japan Cooperative Biogas for Growth (CBG) Initiative — a new bilateral clean energy programme announced at the 16th India-Japan Annual Summit in New Delhi. The initiative was formalised through a Memorandum of Cooperation signed between Japan's Ministry of Economy, Trade and Industry (METI) and India's Ministry of Cooperation and Department of Animal Husbandry and Dairying.

The programme's stated objective is to scale up compressed biogas production in India by developing 1,000 cooperative-based biogas and organic fertiliser plants across the country by 2030 — using India's agricultural biomass resources and Japan's expertise in waste-to-energy technology and circular economy systems.

This is not a standalone announcement. It builds on India's existing CBG infrastructure under SATAT and GOBARDhan, and introduces a cooperative-ownership model that distinguishes it from previous private-sector-led plant development. For anyone tracking India's biomass sector, rural energy policy, or agricultural waste management, this initiative deserves close attention.

Why This Initiative Was Launched

India produces biomass at an enormous scale. The country has nearly 300 million cattle generating dung daily. Hundreds of millions of tonnes of crop residue — paddy straw, wheat straw, sugarcane trash, maize stalks — are generated annually across agricultural states. Municipal organic waste, dairy waste, and poultry litter add further to the available feedstock pool.

The problem is that most of this biomass is either burned, dumped, or left decomposing — releasing methane and CO₂ into the atmosphere, contributing to the stubble burning crisis across North India, and representing a large untapped energy resource.

Japan, on the other hand, has developed significant expertise in anaerobic digestion, waste-to-energy conversion, biogas utilisation, and cooperative business models for renewable energy infrastructure. The CBG Initiative is designed to combine India's biomass resource base with Japan's technological and financing capabilities to convert this waste problem into a rural energy solution.

What Is CBG and Why It Matters

Compressed Biogas (CBG) is biogas that has been purified — with carbon dioxide, hydrogen sulphide, and moisture removed — and then compressed. The result is a fuel with approximately 90–95% methane content, making it functionally equivalent to Compressed Natural Gas (CNG) in terms of energy quality and combustion characteristics.

CBG can be used in vehicles, industrial boilers, gas distribution networks, and cooking applications. For India, its significance lies in what it replaces: imported natural gas and LNG, which represent a significant and growing foreign exchange burden. A domestic CBG supply chain built on agricultural waste feedstock directly reduces import dependence while utilising biomass that would otherwise pollute the atmosphere.

Each CBG plant also produces two valuable by-products: Fermented Organic Manure (FOM) and Liquid Fermented Organic Manure (LFOM) — both of which can replace synthetic fertilisers for farmers, reducing input costs and improving soil health over time.

The Cooperative Model: What Makes This Different

Most CBG plant development in India to date has been led by private entrepreneurs under the SATAT framework — individual project developers who secure offtake agreements with oil marketing companies, arrange financing, and manage plant operations independently.

The India-Japan CBG Initiative takes a different structural approach. It centres on dairy cooperatives, milk unions, village societies, farmer producer organisations, and panchayats as the primary implementing entities.

In this model, farmers and dairy cooperative members supply the feedstock — cattle dung, agricultural residue, and organic waste — while the cooperative manages plant operations and distributes revenue among its members. Japan's role includes technology transfer, financing support, and capacity building for cooperative staff.

This cooperative structure has several practical advantages. Cooperatives already have the trust infrastructure and member networks needed to aggregate biomass from dispersed rural households — a key logistical challenge in any biomass energy project. Revenue sharing among members creates direct financial incentives for biomass supply, which improves feedstock reliability. And cooperative ownership aligns the plant's economic success with the interests of the farming community it serves.

Feedstock: What These Plants Will Run On

The initiative plans to utilise a broad range of biomass feedstocks available across India's agricultural and dairy sectors:

Cattle and buffalo dung is the primary feedstock for dairy cooperative-based plants — the most logistically accessible biomass in village settings. Rice straw, wheat straw, sugarcane trash, maize stalks, and press mud from sugar mills add significant agricultural residue volume. Poultry litter, food waste, municipal organic waste, vegetable waste, and dairy effluent round out the feedstock mix for plants located near urban or peri-urban areas.

The diversity of feedstock types is deliberate — it allows plants to maintain consistent gas production across seasons and geographies, rather than depending on a single crop residue whose availability peaks and troughs with agricultural cycles.

How CBG Plants Work

The production process in a standard CBG plant follows a sequential flow:

Biomass is collected and pre-processed, then fed into an anaerobic digester where microorganisms break down the organic material in the absence of oxygen. This digestion process generates raw biogas — a mixture primarily of methane and carbon dioxide. The raw biogas passes through a purification system that removes CO₂, H₂S, and moisture, producing upgraded biogas with 90–95% methane. This upgraded gas is then compressed and stored in cylinders or fed into a piped distribution system for delivery to end users.

The residual material from the digester — the digestate — is processed into FOM and LFOM, which are bagged or stored for distribution as organic fertiliser.

Where This Sits in India's Existing CBG Ecosystem

The India-Japan CBG Initiative does not exist in isolation. It builds on a policy foundation that India has been constructing since 2018.

SATAT (Sustainable Alternative Towards Affordable Transportation) was launched by the Ministry of Petroleum and Natural Gas in 2018 to promote CBG as a transport fuel. SATAT provides long-term offtake agreements from oil marketing companies — IOCL, BPCL, HPCL — giving plant developers guaranteed buyers for their CBG output. The long-term SATAT vision encompasses 5,000 CBG plants producing approximately 15 million metric tonnes (around 53 MMSCMD) of CBG annually, representing a total investment of approximately ₹2 lakh crore.

GOBARDhan (Galvanising Organic Bio-Agro Resources Dhan) is the government's waste-to-wealth programme for rural areas, focusing on converting cattle dung and agricultural waste into biogas and organic compost.

As of November 2024 data from PNGRB, India had 80 commissioned CBG plants, 819 registered plants under GOBARDhan, 253 retail outlets selling CBG, and cumulative CBG sales of 23,578 tonnes. The gap between 819 registered and 80 commissioned plants reflects the financing, construction, and operational ramp-up challenges that the Japan partnership is specifically designed to help address.

The India-Japan initiative's target of 1,000 cooperative-based plants sits within the broader SATAT framework of 5,000 total plants — representing 20% of the national target specifically channelled through cooperative ownership structures with Japanese technology and financing support.

What India and Japan Each Bring

India's contribution to the initiative:

A biomass resource base of unmatched scale — nearly 300 million cattle, hundreds of millions of tonnes of annual crop residue, and an established network of dairy cooperatives with rural reach that no private developer could replicate independently. India also brings an existing policy framework through SATAT and GOBARDhan, along with long-term gas offtake commitments from oil marketing companies that de-risk plant revenue for investors.

Japan's contribution:

Advanced anaerobic digestion and waste-to-energy technology proven in Japanese cooperative and municipal settings. Financing mechanisms including JBIC (Japan Bank for International Cooperation) instruments and private Japanese clean-energy investment. Circular economy expertise — Japan has developed sophisticated models for integrating waste management, energy production, and organic nutrient recovery that transfer directly to the Indian cooperative CBG context.

Benefits Across Three Dimensions

Economic benefits:

Farmers gain a new income stream from selling biomass and dung — feedstocks previously worth nothing or actively costly to dispose of. Cooperatives gain a revenue-generating asset that strengthens the organisation's financial position and member loyalty. India reduces LNG and natural gas import expenditure as domestic CBG production scales. Rural employment is created at the plant level and across the biomass collection supply chain.

Environmental benefits:

Methane that would have been released from decomposing dung and crop residue is captured and converted into clean fuel instead. Open crop residue burning — the primary driver of severe seasonal air pollution across North India — is reduced as straw and stalks become economically valuable feedstock. Greenhouse gas emissions fall. Soil health improves through the substitution of synthetic fertilisers with FOM and LFOM.

Strategic benefits:

For India, the initiative advances energy security by reducing dependence on imported fossil gas. It also strengthens the India-Japan Special Strategic and Global Partnership across a sector — rural clean energy — where both countries have complementary interests. For Japan, it creates technology export opportunities, investment entry points in India's renewable energy infrastructure, and a demonstration of Japan's circular economy capabilities in a large emerging market.

Key Challenges to Watch

The initiative is significant but not without implementation complexity. Biomass collection logistics remain the most difficult operational challenge in any rural biogas project — aggregating feedstock from dispersed small farmers is expensive and coordination-intensive. Seasonal feedstock availability requires plant operators to manage multi-feedstock blending strategies to maintain consistent gas output year-round. Financing and project viability at the cooperative level requires careful structuring, since cooperatives typically lack the balance sheet strength that private developers bring to bank financing processes. Training cooperative members in plant operation and maintenance — and ensuring reliable O&M support in rural areas — will determine whether commissioned plants sustain output at design capacity.

These are not insurmountable challenges, but they are real ones. The pace at which India has moved from 819 registered to only 80 commissioned plants under the existing framework suggests that the cooperative model will need sustained institutional support — from both governments and financing institutions — to achieve the 1,000-plant target by 2030.

What This Means for India's Biomass Sector

For biomass pellet manufacturers, agricultural waste aggregators, and anyone operating in India's biomass supply chain, this initiative signals a structural expansion of demand for agricultural residue as an energy feedstock — not just from thermal power plants under the co-firing mandate, but now from a cooperative biogas sector with explicit government backing and international financing support.

Rice straw, paddy straw, wheat straw, and sugarcane residue — the same feedstocks that supply India's pellet industry — are among the primary inputs for the cooperative CBG plants being planned. As both the co-firing mandate and the CBG sector scale simultaneously, competition for agricultural residue feedstock will increase. For biomass aggregators and logistics operators, this creates both opportunity and the need to build supply chain positioning now.

For entrepreneurs and cooperatives considering CBG plant development, the India-Japan initiative represents the most significant policy and financing tailwind the sector has seen since SATAT's launch in 2018.

Key Numbers at a Glance

India-Japan cooperative CBG target: 1,000 plants by 2030. SATAT long-term total target: 5,000 plants. SATAT annual production target: 15 million tonnes (approximately 53 MMSCMD). Estimated total SATAT investment: ₹2 lakh crore. Registered CBG plants as of November 2024: 819. Commissioned CBG plants as of November 2024: 80. Retail outlets selling CBG: 253. Cumulative CBG sold: 23,578 tonnes.

Planning a CBG Plant or Biomass Project?

If you are evaluating a CBG plant under the India-Japan initiative, SATAT, or GOBARDhan frameworks — including feedstock assessment, plant sizing, subsidy eligibility, or offtake structuring — Peltra Energy offers End-To-End project support of CBG.

Visit pelletrates.com/consultation to discuss your project. Consultation services cover feedstock availability mapping, financial modelling, SATAT registration guidance, and site selection — starting at ₹10,000.

Last updated: July 20, 2026. Data sourced from the 16th India-Japan Annual Summit Joint Statement (Prime Minister of India official website), PNGRB CBG sector data (November 2024), Ministry of Petroleum and Natural Gas SATAT programme documentation, and GOBARDhan programme data.