A compressed biogas (CBG) plant turns organic waste into vehicle and industrial fuel, and it is set up mostly by agri-businesses, sugar mills, dairies and energy investors. Gas goes to oil marketing companies and city gas distributors, while the digestate sells as organic manure. A compressed biogas (CBG) plant consultant like NPCS helps you test feedstock, pick the technology, line up approvals and prepare a project report that lenders can read.
Compressed Biogas (CBG) Plant at a Glance
| Typical capacity | ~2–20 TPD CBG |
|---|---|
| Land | ~5–15 acres incl. feedstock storage |
| Power load | High, upgrading and compression |
| Water | Moderate–high in wet digestion; digestate liquid recycled |
| Manpower | ~30–80 plus feedstock collection |
| Indicative investment | ~₹20–120 crore depending on TPD and feedstock |
Investment basis: digesters, upgrading, compression, FOM handling, feedstock storage; excludes land.
Figures are indicative ranges. Your project report works them out for your capacity and location.
Market Demand for CBG Plants in India
Demand for CBG in India is policy-led and the buyers are large. SATAT targets, the blending obligation for city gas networks, net-zero goals and the push to end stubble burning all point the same way. Plants cluster where feedstock is dense, mainly in Punjab, Haryana, Uttar Pradesh, Maharashtra, Gujarat and Madhya Pradesh. Export potential is low, so this is a domestic fuel business.
- Oil marketing companies buying CBG for automotive outlets
- City gas distributors needing CBG for blending
- Industries using CBG as fuel
- Farmers buying fermented organic manure
CBG and Manure Products You Can Make
A CBG plant sells two things: gas for vehicles or pipeline injection, and fermented organic manure (FOM) in solid and liquid form. Gas suits oil companies and city gas networks. Manure suits farmers, and treating it as a real product protects your margins.
- CBG for vehicles/pipeline injection
- Fermented organic manure (FOM) and liquid FOM
Compressed Biogas (CBG) Plant Process
The compressed biogas (CBG) plant process starts with feedstock storage and pre-treatment, then anaerobic digestion, where bacteria break down waste without oxygen to make biogas. Straw needs the most pre-treatment, so digestion performance depends on it. The gas is cleaned of H2S, upgraded to high-methane gas by VPSA, membrane or water scrubbing, and compressed for cascades or pipeline injection.
Quality is checked at the gas stage against IS 16087 for methane, H2S and moisture. Digestate is separated and processed into manure under Fertiliser Control Order norms. Wet or dry digestion is a key early choice.
- Feedstock collection and storage
- Pre-treatment
- Anaerobic digestion
- H2S removal
- Upgrading (VPSA/membrane/water scrubbing)
- Compression and cascade filling or pipeline injection
- Digestate separation
- FOM drying and packing
Raw Materials and Machinery for a CBG Plant
Feedstock can be paddy straw, Napier grass, press mud, cattle dung, food waste, municipal organic waste or distillery spent wash. Straw comes from the Punjab and Haryana belts, press mud from sugar mills, and dung from dairies and gaushalas. The machines that matter most are the digesters, the upgrading unit and the compressors, since they set uptime and gas quality.
- Feedstock handling
- Digesters
- Gas holder
- Scrubber
- Upgrading unit
- Compressors
- Cascades
- Solid-liquid separator
- FOM dryer and bagging
Compressed Biogas (CBG) Plant Licence and Approvals
Start with feedstock agreements and the offtake agreement with an oil marketing company, then apply for consent to establish (CTE) from the State Pollution Control Board before construction. Consent to operate (CTO) follows once the plant is built. The pollution category depends on feedstock and digestate handling, from Red to Orange, and in some cases White or Blue.
- PESO licences for storage, compression and dispensing
- FCO registration to sell manure
- IS 16087 for CBG fuel quality
| Pollution category | CPCB Jan-2025 CPCB S.No. 67: CBG on MSW or process waste (press mud, effluents) = Red; on crop residue or animal waste = Orange; plants converting all digestate into FOM/LFOM per gazette norms with no wastewater discharge can be White (SPCB verifies case by case); MSW bio-methanation run as an essential environmental service can fall under Blue (Annexure-II) |
|---|---|
| HSN code | 2711 29 (CBG, gaseous hydrocarbon); 3101 (fermented organic manure) |
| GST | Biogas plants and devices: 5% (from 12%) w.e.f. 22-09-2025. GST on CBG output depends on its classification under HSN 2711 and the buyer; NPCS applies the current rate in the project financials |
| BIS / quality control order | IS 16087 specification for CBG fuel quality |
| Other licences | PESO licences (storage, compression, dispensing); CTE/CTO; offtake agreement with oil marketing company; FCO registration to sell FOM |
Securing Feedstock for Your CBG Plant
Paddy straw is available only in October and November, so a straw-based plant must store enough for the whole year. That ties up land, working capital and fire-safety planning. Many developers blend straw with press mud, dung or Napier grass to smooth supply and cost. Signing feedstock supply early, and checking digester performance on each material, lowers the biggest risk in the project.
Choosing the Right CBG Plant Size
Plant size runs from about 2 to 20 TPD of CBG, and indicative investment from about ₹20–120 crore, excluding land. Small units need less feedstock and land but spread fixed costs over less gas. Larger plants need about 5–15 acres with feedstock storage and a dependable supply radius. Your report tests the right size against the feedstock you can lock in.
Government Schemes and Project Finance for CBG
SATAT gives assured offtake through oil marketing companies, and the blending obligation for city gas networks supports demand. MNRE's waste-to-energy programme, GOBARdhan and Market Development Assistance for FOM may also apply. NPCS reports are used for bank loans and programmes such as PMEGP, MSME schemes, Mudra and NABARD-linked projects, subject to each lender's requirements.
What Decides Success in a CBG Plant
Good operators lock in feedstock and storage early, keep the plant running, and sell manure as well as gas. The main risks are feedstock logistics and cost, digester performance on straw, a weak FOM market and working capital.
- Bankable offtake before construction
- Sustained plant uptime
- FOM and liquid FOM sold to farmers
- CO2 capture as an extra revenue option
How NPCS Helps You Set Up a CBG Plant
NPCS works through the decisions that shape a CBG project: capacity, wet or dry digestion, upgrading technology, machinery and vendor selection, and plant layout. Our team also supports production process guidance, installation and commissioning assistance, and the approvals sequence. You get a compressed biogas (CBG) plant project report built for your feedstock, location and lender.
NPCS's published client list records 6 assignments on compressed biogas projects between 2024 and 2026 for clients in 5 states, including bankable project reports and techno-economic feasibility studies.
What Your Compressed Biogas (CBG) Plant Project Report Covers
- Project introduction and BIS specifications
- Manufacturing process with flow sheet
- Market survey (demand, imports/exports, existing units)
- Personnel
- Plant and machinery with suppliers
- Land and building with layout
- Raw materials with sources and rates
- Financials (project cost, working capital, cost of production, profitability, break-even, 5–10 year cash flow, projected balance sheet, IRR/NPV/payback)
Compressed Biogas (CBG) Plant: Frequently Asked Questions
What is the compressed biogas (CBG) plant setup cost in India?
Indicative investment is about ₹20–120 crore, depending on TPD capacity and feedstock. This covers digesters, upgrading, compression, FOM handling and feedstock storage, but excludes land. Your project report works out the figure for your capacity and location.
Which pollution category applies to a CBG plant?
It depends on feedstock. CBG on municipal waste or process waste such as press mud is Red, and on crop residue or animal waste it is Orange. Plants turning all digestate into manure with no wastewater discharge can be White, as verified by the State Pollution Control Board.
How much land and power does a CBG plant need?
Plan on about 5–15 acres including feedstock storage. Power load is high because upgrading and compression use the most electricity. Water need is moderate to high in wet digestion, though the digestate liquid is recycled.
How to start a compressed biogas (CBG) plant business?
Begin by securing feedstock and an offtake arrangement, then choose technology and capacity. Next prepare a project report, apply for CTE and PESO licences, arrange finance and build. NPCS can support each of these steps.
How does NPCS help with a CBG project?
NPCS prepares detailed project reports, techno-economic feasibility studies and bankable reports for CBG projects. Our team also guides machinery selection, vendor selection, layout and approvals. Share your feedstock and planned TPD, and we will outline the next steps.