Nihar Ranjan Bhuyan
(bhuyannihar0020@gmail.com)
The state is utilising incentives, feedstock, and partnerships to convert agricultural and dairy waste into clean fuels.
Assam is becoming one of the most active states in India’s push for com
pressed biogas (CBG), using a specific set of state incentives and various projects to turn cow dung, city waste, and leftover crops into fuel for vehicles and organic fertiliser. The state’s approach sits at the intersection of two policy currents: the Centre’s national CBG programme, which has moved from a voluntary scheme to a mandatory blending obligation, and Assam’s own Integrated Clean Energy Policy, which singles out biofuels as a priority sector alongside solar, wind and green hydrogen.
The State Framework: Assam Integrated Clean Energy Policy 2025
The Assam government notified its Integrated Clean Energy Policy in 2025, setting an overall target of 11.7 gigawatts of renewable energy capacity by 2030, spanning solar, wind, pumped hydro, battery storage and green hydrogen. Within this broader clean-energy roadmap, biofuels receive explicit attention: the policy envisions scaling up bio-CNG production to 10,000 tonnes per day and ethanol output to 1,500 kilolitres per day, positioning Assam’s biofuel ambitions on a scale comparable to its solar and storage targets.
For compressed biogas, the policy provides a 25% financial support to biofuel developers who build CBG plants, along with a refund of the state GST on qualifying investments. These incentives are part of a larger set of support measures for renewable energy projects, which include easier access to land that is considered non-agricultural and a streamlined online system to speed up approvals. The Assam Power Distribution Company Limited (APDCL) has been designated as the nodal agency responsible for processing approvals and disbursing incentives, giving investors a single point of contact rather than multiple departments to navigate. The policy is designed to remain in force until March 2030, or until superseded by a successor policy, giving developers a reasonably long investment horizon to plan around.
The National Backdrop: SATAT and the Blending Mandate
Assam’s state-level incentives layer on top of a national CBG framework that has hardened considerably recently. What started as the optional Sustainable Alternative Towards Affordable Transportation (SATAT) scheme has now become a required CBG Blending Obligation, which means that oil companies must mix a growing amount of compressed biogas into CNG and piped natural gas, starting at 1 percent in the 2025-26 financial year and increasing to 5 percent by 2028-29. This shift from a voluntary to a compliance-driven mechanism is significant because it creates a guaranteed, growing-off-take market for CBG producers rather than leaving sales to discretionary purchase agreements.
The Centre has also revised the CBG procurement price and, in the 2026-27 Union Budget introduced a central excise duty exemption on the biogas portion of blended CNG, both of which improve project economics. Separately, the Ministry of New and Renewable Energy offers capital financial assistance of up to several crore rupees per plant depending on capacity, and the North Eastern Region carries a special incentive: an additional 20 percent over the standard central assistance for biogas projects located in NER states, island territories, and registered gaushalas. For a state like Assam, this stacking of central NER incentives with the state’s own 25 percent capital subsidy and SGST reimbursement meaningfully lowers the capital burden on early-stage developers, a factor that matters given the smaller average project scale and logistical costs typical of hill and floodplain geographies.
Projects on the Ground
Assam has already made significant progress in implementation. In March 2023, Chief Minister Dr. Himanta Biswa Sarma inaugurated Northeast India’s first compressed biogas plant at Sonapur in Kamrup district, designed to process around five tonnes per day of feedstock, including cattle dung and municipal solid waste, into CBG. The plant was framed both as a clean-fuel initiative and as a partial answer to the region’s municipal solid waste management challenges.
More recently, the sector has drawn in a mix of dairy cooperatives and private capital. In July 2026, North East Dairy and Foods Limited (NEDFL), which markets products under the Purabi brand and is a joint venture between the Government of Assam and the National Dairy Development Board (NDDB), signed a memorandum of understanding with NDDB and Suzuki R&D Centre India to set up a new CBG plant in the state. Under the arrangement, NDDB will provide technical and institutional support, NEDFL will execute and operate the plant and market the resulting biogas and organic fertiliser, and Suzuki’s Indian R&D arm will invest in the project while claiming the associated carbon benefits from the emissions reductions achieved. The project is explicitly framed as a step toward a circular economy, converting dairy and agricultural waste that would otherwise be discarded into both a transport fuel and a bio-fertiliser input for farmers.
Feedstock Advantage and Rural Impact
Assam’s feedstock base is one of its more persuasive arguments for CBG investment. The state has a large dairy and livestock population generating substantial cattle dung, a tea industry that produces significant biomass and pruning waste, and expanding municipal solid waste volumes in urban centres such as Guwahati. Converting these waste streams into CBG serves multiple policy goals simultaneously: it offers municipalities a partial solution to solid waste disposal, provides dairy farmers and agricultural households with an additional revenue stream by monetising waste that currently has little value, and produces organic fertiliser as a by-product, which can reduce farmers’ dependence on chemical inputs. Supporters also highlight the possibility of creating jobs in collecting feedstock, transporting it, and running the plants, as well as the reduction of greenhouse gases from using waste instead of fossil CNG.
Challenges that Remain
Despite the favourable policy stack, CBG projects in Assam and the wider Northeast face structural constraints that incentives alone do not fully resolve. Feedstock aggregation is logistically harder in a state with dispersed landholdings, seasonal flooding and comparatively weak rural road connectivity, all of which raise collection costs relative to plains states with denser, mechanised agriculture. Capital costs for plant construction remain high in absolute terms even after subsidies, and developers still need to secure firm, bankable offtake agreements with oil marketing companies to satisfy lenders. Awareness and technical capacity among smaller entrepreneurs and cooperatives are also uneven, meaning that early movers such as NEDFL, backed by institutional partners like NDDB and Suzuki, may encounter it easier to navigate approvals and financing than standalone private developers.
Future Perspectives
Assam’s push for compressed biogas shows a clear plan, using state subsidies and a simple approval process on top of a strong national blending requirement, all based on the state’s plentiful feedstock. The Sonapur plant demonstrated feasibility; the NEDFL-NDDB-Suzuki project signals that larger institutional and corporate capital is now willing to commit to the sector. Whether Assam can grow from a few key plants to the goal of producing 10,000 tonnes of bio-CNG per day, as stated in its clean energy policy, will rely more on how well it carries out the plan—like creating dependable supply chains for feedstock, making sure subsidies are paid on time through APDCL, and attracting enough mid-sized developers beyond the high-profile public-private partnerships that have been leading the way so far.