Mumbai: India’s mounting energy import dependence is opening up an unexpected opportunity hidden in farm waste, cattle dung and urban garbage, with the country’s compressed biogas (CBG) sector projected to attract investments of nearly ₹1 lakh crore in the coming years, according to a new industry research report.The report by Quantace Research said India is currently utilising less than 1% of its estimated annual CBG production potential of 62 million metric tonnes, despite generating over 500 million tonnes of agricultural residue every year and possessing one of the world’s largest cattle populations.With India’s crude oil import dependence touching a record 89.4% in FY25 and the petroleum import bill estimated at nearly $143 billion, industry experts now see biogas not merely as a clean-energy initiative but as a strategic domestic fuel alternative that could help shield the economy from volatile global oil markets.“India’s energy vulnerability is no longer cyclical — it is structural,” said Karthick Jonagadla, smallcase manager and MD & CEO of Quantace Research. “Biogas represents one of the few scalable and immediately deployable domestic alternatives available to India.”Unlike several renewable technologies that rely heavily on imported minerals, components or global supply chains, India’s biogas ecosystem is built almost entirely on domestic resources. Agricultural residue, cattle waste, municipal solid waste and industrial byproducts are increasingly being viewed as strategic energy assets rather than waste streams.The report said this gives India a rare advantage where energy security, waste management and rural income generation can converge into a single economic ecosystem.Policy momentum is also gathering pace. The Centre’s SATAT (Sustainable Alternative Towards Affordable Transportation) initiative and the mandatory CBG blending roadmap are expected to accelerate investments and infrastructure creation. More than 130 CBG plants have already been commissioned under SATAT, while over 1,000 projects remain in the pipeline.Industry observers said the shift from voluntary adoption to mandatory blending could prove to be the sector’s turning point as it creates predictable long-term demand for producers, gas distributors and infrastructure developers.Oil marketing companies including Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited are increasingly investing in biogas infrastructure and supply chains. Technology and engineering firms such as Praj Industries are also expected to benefit from the sector’s expansion.The sugar and distillery sector, dairy cooperatives and waste-management firms are emerging as potential key participants due to the availability of feedstock such as press mud, organic waste and cattle residue.Apart from reducing fossil fuel imports, the sector is also expected to generate significant rural employment through plant construction, logistics, operations and organic fertiliser production. Industry estimates suggest large-scale deployment could support tens of thousands of direct and indirect jobs over the next decade.The report noted that even replacing a modest portion of India’s natural gas demand with domestically produced biogas could reduce LNG imports and strengthen the country’s external balance.However, the sector continues to face major challenges, including fragmented feedstock supply chains, seasonal biomass availability, high upfront capital costs and the need for faster expansion of city gas distribution networks.Industry experts drew parallels with India’s ethanol blending programme, which scaled rapidly once policy support, pricing incentives and infrastructure aligned. Analysts believe CBG could now be approaching a similar inflection point.As India looks to reduce its exposure to global crude shocks while addressing stubble burning, landfill pressure and rural distress, biogas is steadily moving from the margins of the clean-energy debate into the centre of the country’s long-term energy strategy.
