India Biogas Market Outlook to 2028

India Biogas Market Overview

The India biogas market is valued at USD 1.5 billion, according to a five-year historical analysis. This growth is primarily driven by government initiatives supporting renewable energy, such as subsidies and incentives under the National Biogas and Organic Manure Programme (NBOMP) and the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative. Moreover, the increasing demand for clean energy solutions and rural electrification efforts have bolstered market growth. The use of biogas for power generation, cooking, and transportation fuel further drives this expansion.

In terms of market dominance, regions such as Maharashtra, Uttar Pradesh, and Tamil Nadu lead the biogas sector in India. This dominance is attributed to the high availability of feedstock, including agricultural waste, industrial waste, and animal manure, as well as favourable government policies encouraging the setup of biogas plants. The presence of several large-scale biogas production facilities and continuous investment in rural electrification have also made these states the leading contributors to the market's growth.

The National Biogas and Organic Manure Programme (NBOMP) is one of India's flagship initiatives promoting biogas. It provides financial support for the construction of biogas plants, targeting rural households and farmers. The program has sanctioned over 500 crore for biogas installations, supporting both household and community-level plants. The initiative aims to create 2 million additional biogas plants by 2025, helping manage organic waste while generating renewable energy and organic fertilizer.

India Biogas Market Segmentation

By Feedstock Type: Indias biogas market is segmented by feedstock type into agricultural residue, municipal solid waste, industrial waste, and animal manure. Of these, agricultural residue holds the dominant market share due to its abundant availability in rural areas and the governments focus on reducing the burning of agricultural waste. This feedstock is also favored because it provides a dual benefitreducing waste while generating clean energy. The integration of biogas plants into agricultural practices has boosted the dominance of this segment.

By Material Type: In terms of application, the India biogas market is segmented into power generation, cooking fuel, vehicle fuel (compressed biogas), and organic fertilizer production. The power generation segment holds the largest share due to the growing need for renewable energy sources to meet electricity demand in both urban and rural areas. Government schemes and subsidies aimed at boosting renewable energy capacity have made biogas-based power plants a more attractive option for investors, thus driving the dominance of this segment.

India Biogas Market Competitive Landscape

The India biogas market is primarily dominated by a mix of domestic companies and a few international players. The competition is driven by technological advancements, strategic partnerships, and an increasing focus on renewable energy solutions. Companies like Praj Industries and Green Elephant Engineering have emerged as leaders due to their strong technical expertise and project execution capabilities. Many firms are also focusing on building scalable biogas plants across rural and semi-urban regions to cater to the growing energy demand.

Company

Establishment Year

Headquarters

Plant Capacity (MW)

Revenue (USD Mn)

No. of Projects

Technology Expertise

Employees

Annual Production (CBG)

Praj Industries

1983

Pune, Maharashtra

Spectrum Renewable Energy Pvt. Ltd.

2009

Mumbai, Maharashtra

Green Elephant Engineering Pvt. Ltd.

2008

Ahmedabad, Gujarat

Atmos Power Pvt. Ltd.

2010

Ahmedabad, Gujarat

GPS Renewables

2012

Bengaluru, Karnataka

India Biogas Market Analysis

India Biogas Market Growth Drivers

Growing Demand for Clean Energy: Indias growing energy demand is pushing the need for cleaner alternatives, with biogas playing a crucial role. India's electricity consumption is expected to surpass 1,800 TWh in 2024, emphasizing the need for diversified energy sources. In alignment with its diversification goals, the government promotes biogas for rural electrification and reducing grid dependency. Biogas plants, which can process over 300 million tons of waste annually, provide decentralized energy and support rural energy security, directly contributing to clean energy efforts.

Waste Management Mandates: India generates over 277 million tons of waste annually, with 60% being organic. Waste management policies, such as the Solid Waste Management Rules, 2016, mandate local bodies to encourage decentralized waste treatment, including biogas plants. Agricultural waste, estimated at over 500 million tons per year, also presents a massive feedstock for biogas production. These mandates are a growth driver for biogas, as they align waste management with clean energy production, helping reduce landfills and emissions.

Rural Electrification Initiatives: With over 20,000 villages still lacking reliable electricity, rural electrification initiatives like the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) are crucial in providing energy access. Biogas, due to its decentralized nature, is an efficient alternative for remote areas. These plants can produce up to 4 cubic meters of biogas daily, enough to meet the energy needs of a small village. The governments push for off-grid energy solutions to power these regions is driving demand for biogas technologies.

India Biogas Market Challenges

High Initial Setup Costs: Setting up a biogas plant in India incurs costs, particularly for small-scale farmers or rural households. A typical household biogas plant can cost between 25,000 to 50,000, which, despite government subsidies, remains a financial burden for many. This high capital requirement limits the widespread adoption of biogas technology. Large-scale plants, used for industrial applications, require even more investment, often exceeding 1 crore. The substantial upfront expenditure remains a critical challenge, despite long-term operational savings.

Lack of Skilled Workforce: India's biogas sector faces gap in skilled technical manpower. The operation and maintenance of biogas plants require specialized knowledge in anaerobic digestion, gas handling, and equipment management. The National Skill Development Corporation (NSDC) reports that less than 25% of the workforce involved in biogas plant operations have undergone formal training. This shortage in skilled labour increases operational inefficiencies, leading to frequent plant failures and maintenance delays, hindering the sector's growth.

India Biogas Market Future Outlook

Over the next five years, the India biogas market is expected to experience growth, driven by continuous government support, the growing adoption of renewable energy solutions, and the need for sustainable waste management. The development of compressed biogas (CBG) networks for vehicular use and advancements in anaerobic digestion technology will further boost market expansion. Moreover, the emphasis on decentralizing energy production and enhancing rural electrification initiatives will present new growth opportunities for market players.

India Biogas Market Opportunities

Technological Advancements in Biogas: India is witnessing advancements in biogas digestion technologies, with innovations in anaerobic digestion improving plant efficiency. These advancements have increased biogas production rates by up to 25% over the last two years, thanks to improvements in feedstock management and microbial strains used in the digestion process. Research institutions are developing enhanced bio-digesters that can process mixed organic waste streams more effectively, making biogas a more viable option for urban and rural waste management systems.

Expansion of Biogas in the Industrial Sector: Industrial decarbonization efforts in India, particularly in sectors like food processing and textiles, are increasingly incorporating biogas. Industries generate substantial organic waste, which can be converted into biogas, reducing reliance on fossil fuels. Over 10,000 industrial units have been identified as potential sites for biogas integration, capable of producing over 2.5 million cubic meters of biogas daily. As industries aim to reduce their carbon footprints in line with the Paris Agreement, biogas offers a sustainable alternative for energy production.
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