India’s compressed biogas sector faces a hurdle as plant operators struggle to sell the massive volumes of organic manure produced as a byproduct. With only 217 of the planned 1,908 plants operational, the inability to find buyers for this fertilizer is threatening the financial viability of these facilities and slowing down the national clean energy rollout.
The national Compressed Biogas (CBG) initiative is facing a significant operational hurdle that threatens to slow the country’s clean energy expansion. While the government has successfully created a framework for gas production, the economic model for these plants relies on selling a secondary product—fermented organic manure—which is now piling up at production sites.
A typical facility processing 100 tonnes of organic waste daily generates roughly 4 tonnes of biogas and a massive volume of byproducts: nearly 40 tonnes of solid manure and 50,000 litres of liquid fertilizer. Currently, many operators are struggling to find buyers for this byproduct, turning their production sites into warehouses for perishable waste.
The core business challenge is price competition. Organic manure struggles to compete against heavily subsidized chemical fertilizers, which remain the preferred choice for most farmers. The situation worsened after the withdrawal of a market development assistance scheme that previously provided ₹1,500 per tonne of manure sold. Without this support, fertilizer companies have less incentive to partner with CBG producers to distribute the manure, creating a severe bottleneck.
For investors, this is a critical operational risk. The viability of these projects depends on both revenue streams—gas sales and fertilizer sales. When plants cannot clear their manure inventory, they are forced to reduce their processing capacity to manage waste accumulation. This not only hurts revenue but also puts these projects at risk of missing the operational benchmarks required to keep government subsidies and incentives.
The government’s ambitious target involves setting up 1,908 plants, yet only 217 have been commissioned so far. As the industry pushes for a unified policy that treats the fertilizer byproduct as a core component of energy security rather than an afterthought, the immediate focus for investors remains on whether the government will introduce new structural support to create an assured market for the organic manure.