Excise waiver for biogas blending can unlock `1L cr investment: IBA

New Delhi: The proposed excise duty waiver on biogas blended in compressed natural gas, coupled with a clear policy line, can unlock potential investment of Rs 1 lakh crore in the country, Indian Biogas Association (IBA) said on Sunday.

The government in the recently announced Union Budget 2026, provided an excise duty waiver on Compressed Biogas (CBG) blended with Compressed Natural Gas (CNG), which is an important step forward in India's energy transition towards 2070 Net Zero target, an IBA statement said.

According to the statement, quantitatively, if city gas distribution (CGD) networks achieve even a 5 per cent biogas blending level nationwide over the next five years, it will require about 2.5-3 MMTPA of CBG.

"This itself could lead to investments of Rs 45,000-55,000 crore. If there is a clear policy and predictable prices, blending could realistically grow to 7-8 per cent by 2032. This would double the investment potential to almost Rs 1 lakh crore," it said. This initiative (waiver) not only implies a reduction in gas prices; it also changes few dynamics of the biogas sector such as speeding up private investment, making energy more secure, and has measurable benefits for the climate and rural development, it noted. The excise waiver fixes a long-standing imbalance: CBG is a renewable fuel that is better for the environment, but it was taxed the same way as CNG, it opined.

Waiving the excise part on the biogas of the blended fuel makes it instantly more cost-effective.