India imports nearly 88% of its crude and roughly half its gas. When the Strait of Hormuz flared in early March 2026, none of those numbers changed. What changed was the price of ignoring them. Every percentage point of domestic gas substitution that had looked like a climate line item six months ago now reads as an energy-security one.

The shock has also sharpened attention on biofuels as a category, across the solid, liquid and gas spectrum. Ethanol blending is the visible retail story. Less publicised and much farther away from headline coverage is biogas.

For compressed biogas (CBG), the receiving infrastructure, CNG retail outlets, city gas pipelines and the blending mandate are substantially in place.

At India Energy Week 2026 in Goa on January 30, Petroleum Minister Hardeep Singh Puri had hailed CBG as one of the most grounded expressions of India’s energy transition. He cited 133 plants, a combined output of 926 tonnes per day (TPD), 410 retail outlets and 83 plants under construction.

The policy scaffolding exists. The Sustainable Alternative Towards Affordable Transportation scheme, or SATAT, launched in 2018, got the state-owned oil marketing companies, IOCL, BPCL, HPCL, GAIL and IGL, to issue Letters of Intent to buy CBG output.

The arrangement is not guaranteed take-or-pay: plants carry the risk of producing gas, and the oil companies agree to buy what they can actually absorb, not what plants can produce. The CBG Blending Obligation, announced in 2023, mandates 1% of CNG volume for FY26, rising to 5% by FY29; it was another incentive.

Nearly three years on, Puri's own figure of 133 plants against an original target of 5,000 describes the same pattern: the scheme generated paperwork faster than it generated plants.

What the headline numbers also do not show is that existing plants run at an average utilisation of around 35%, per the IEA's India bioenergy report. European biogas plants routinely exceed 80%.

Indian plants hover between 20% and 60%, not from technology failure but because feedstock arrives irregularly, at prices that can shift fast enough to make a plant unviable within a single season. Eight years after SATAT, 133 plants are operational against a target of 5,000.

Puri’s statement thus describes a sector at its beginning with the cadence of one approaching maturity. The 926 TPD being produced is less than 1.5% of India's estimated 62 million tonnes of annual potential. The harder problem, it turns out, is not policy but getting consistent, affordable raw material to each plant gate, across all four seasons.

The Feedstock Problem, Disaggregated

Seasonality is the most visible constraint. Paddy straw arrives for a few weeks around harvest. Press mud, the fibrous residue from sugarcane crushing, comes during crushing season. Agri-residue peaks in October and is scarce in June. A plant designed to run 330 days a year cannot do so on feedstock that arrives in two seasonal pulses.

Besides, the raw material has to be moved over long distances to plants, or plants built close to where waste is generated, with either choice matched to seasonal flows that concentrate availability into short windows.

The raw material is distributed across hundreds of thousands of villages. That is both the opportunity for rural incomes and the reason the sector cannot be scaled by plant-building logic alone.

A TERI-EPA study of 11 CBG plants across northern India found four inactive, felled by feedstock price shocks and supply collapses. One plant shut down after a 40% feedstock cost hike. Another, relying on cow dung, found the price doubled during Covid-19 as organic manure demand surged. These are the norms that aggregate output numbers obscure.

The practical response has been to shift toward feedstocks that do not require seasonal workarounds. Animal waste accounts for 25 million tonnes of annual potential, available year-round from organised shelters and dairy clusters.

Sewage and municipal sludge contribute 10 million tonnes and arrive at sewage treatment plants regardless of harvest cycles. The feedstock finds the plant, not the other way around. Municipal solid waste adds a third urban stream. For all three, the bottleneck is plant-gate infrastructure, not field aggregation.

Three Strategies, Three Risk Profiles

Reliance, Adani Total Gas, VA Tech Wabag and Praj represent three structurally different answers to the feedstock question.

Adani Total Gas built its Barsana cluster around a single captive source, the Shri Mataji Gaushala in Vrindavan, housing 600,000 cattle. At peak in Q4 FY25, the plant drew 219 TPD of input. Beyond Barsana, ATGL has contracts for 500 TPD of municipal solid waste in Ahmedabad and 250 TPD in Rajkot, outsourcing logistics to urban waste systems.

Reliance is attempting something more ambitious. Its pilot plantation on barren lands in Andhra Pradesh grows Napier grass on land that cannot compete with food agriculture. Captive Napier yields four harvests annually, and cuts landed feedstock costs by roughly 50%, pushing EBITDA margins to 65-70%. The first plant at Kanigiri anchors a 500-plant state programme.

VA Tech Wabag represents a third model, building at the point of waste generation. Its order for a sewage-sludge CBG plant in Uttar Pradesh treats the STP as the plant site. Organic material arrives continuously, at effectively zero procurement cost. Revenue is partly tied to tipping fees rather than pure fuel sales. The model scales with city infrastructure rather than agricultural geography.

But all three depend on the same absorptive infrastructure at the back end. GAIL has issued 408 Letters of Intent for 2,293 TPD of CBG production.

Its CBG-CGD Synchronisation Scheme moved approximately 31,900 tonnes of bio-methane in FY25, injected into its 16,421 km pipeline. Two trunk lines nearing completion are expected to add roughly 2 million standard cubic metres per day of capacity from FY27.

Praj Industries represents a fourth model, one step further back from the plant gate. It does not own CBG plants, but licenses the digestion chemistry to those who do. Its RenGas platform, built around a proprietary microbial consortium and a plug-flow digester design co-developed with DVO Inc, has been deployed across 40-plus operational plants in India.

The feedstock logic is different from the others: instead of securing a single reliable input stream, Praj's clients can mix agri-residues, press mud and industrial effluents in the same digester. HPCL's rice-straw plant at Budaun, one of the two operating on paddy straw nationally, runs on RenGas. If technology can partially substitute for aggregation infrastructure, Praj is the company testing that hypothesis.

The bottomline is that the grid is ready to receive bio-methane. The question is whether enough plants can produce it consistently, and have the financial heft and resources that large corporations can muster

CBG's feedstock is distributed locally and non-tradeable internationally. Paddy straw in Haryana cannot be arbitraged to Rotterdam. Cow dung in Vrindavan has no futures contract. That insularity is the sector's most durable competitive advantage. The same distribution is a farm-income story in waiting: a procurement problem for operators and a monetisation channel for cultivators, simultaneously.

A sustained energy shock might increase the plausibility of the 5000-plant target. But reaching it remains contingent on feedstock aggregation being resolved faster than plant commissioning, an outcome not yet secured