Government mandates compressed biogas blending in CNG from FY26

The government has mandated blending of compressed biogas in compressed natural gas (CNG) for transport and piped natural gas (PNG) for households in a phased manner from the financial year 2025-26. The government targets 5% blending from 2028-29.

Compressed biogas blending in total CNG and PNG consumption should be 1% in 2025-26 while the blending has to be increased to 3% and 4% in 2026-27 and 2027-28 respectively, the petroleum ministry said today.

The blending will be voluntary till 2024-25. A Central Repository Body will monitor and implement the blending mandate based on the operational guidelines approved by the petroleum ministry.

The decision on compressed biogas blending obligation was announced by the National Biofuels Coordination Committee, chaired by Petroleum Minister Hardeep Singh Puri.

"The key objectives of the CBO are to stimulate demand for CBG in CGD sector, import substitution for liquefied natural gas, saving in forex, promoting circular economy and to assist in achieving the target of net zero emission etc," the ministry said in a statement.

CNG is a cleaner and more efficient fuel than petrol and diesel, and is expected to be the second most popular fuel for passenger cars in India. CNG-powered cars account for almost 14% of the total passenger vehicle sales in India.

Bio-gas, which consists mainly of methane and carbon dioxide, is produced from organic matter such as food or animal waste. It has the potential to replace natural gas. Biogas has to be purified and upgraded to at least 95% methane by volume to be used as vehicle fuel.

Recently, India’s largest passenger vehicle maker Maruti Suzuki recently showcased a variant of Wagon R with an engine powered by compressed biogas. Besides, the company is also planning to set up compressed biogas plants at its facilities to reduce the carbon footprint.

On the gasoline front, the government has already mandated ethanol blending in petrol. Currently, the ethanol blend in petrol is around 12%. The government targets 20% ethanol blending by 2025-26.