India and Japan plan 1,000 cooperative biogas and organic fertiliser plants, aiming to boost rural livelihoods, waste management and clean energy.
The project seeks to fix chronic sector gaps: Weak plant operations, limited village gas pipelines, uncertain feedstock prices and poor markets for organic manure.
It will leverage Japanese technology and local manufacturing to cut costs.
India and Japan have announced an ambitious plan to set up 1,000 cooperative biogas and organic fertiliser plants across the country. The initiative was announced during the recent meeting between the Prime Ministers of the two countries and aims to strengthen rural livelihoods, improve waste management and promote clean energy.
At first glance, this looks like another renewable energy project. But in reality, it is an opportunity to solve several long-standing problems that have slowed the growth of India's biogas sector.
India already has two major approaches to promoting biogas. One is the GOBARdhan programme under Swachh Bharat Mission (Grameen) Phase II, which supports community and cooperative biogas plants. Under this scheme, the government provides financial assistance of up to Rs 50 lakh per district for setting up community biogas plants. The second is the SATAT initiative, which encourages private and other companies to establish compressed biogas (CBG) plants and supply gas for transport and industrial use.
Although these two models are different, both are facing many of the same challenges.
Constructing a biogas plant is only the first step. The bigger challenge is operating it efficiently over many years.
In several states, including Haryana, community biogas plants built with government support are later handed over to private companies for operation and maintenance. However, many of these plants receive much less feedstock than originally planned and therefore operate at only 10–50 per cent of their installed capacity.
For a private operator, this becomes a financially difficult business. Income from gas sales is often not enough to cover expenses such as labour, electricity, repairs and regular maintenance. As a result, many operators hesitate to take over these plants or struggle to keep them running.
Even when a biogas plant is functioning properly, getting the gas to consumers remains a major challenge.
In most villages, pipeline networks are available only for a small number of nearby households. This means a large share of potential consumers cannot access biogas, limiting both clean energy use and plant revenue.
Private CBG plants face a similar problem. Since many plants are not connected to gas pipeline networks, they have to transport compressed biogas using cylinder cascades carried by trucks. This increases transportation costs and reduces profits.
Expanding village-level gas pipeline networks with proper metering systems could significantly improve plant revenues while making clean cooking fuel available to many more rural households.
A reliable supply of feedstock is essential for every biogas plant. However, India still lacks clear guidelines for pricing materials such as cattle dung and crop residues.
Prices vary sharply depending on location and season. For example, in Punjab, the price of paddy straw can increase from around Rs 1.7 per kg to Rs 2.5 per kg within a single harvesting season.
Without a transparent pricing mechanism, plant operators cannot accurately estimate their production costs, making long-term financial planning difficult.
Every biogas plant also produces Fermented Organic Manure (FOM) and Liquid Fermented Organic Manure (LFOM). These nutrient-rich products can improve soil health and reduce dependence on chemical fertilisers.
However, selling these products remains one of the biggest challenges.
Many farmers continue to rely on subsidised chemical fertilisers because they are familiar, easily available and supported by existing government systems. Awareness about the benefits of organic manure remains limited.
In addition, several plants face regulatory hurdles in marketing FOM and LFOM. Obtaining the necessary approvals and licences can be difficult. When the manure cannot be sold regularly, it accumulates at the plant. Since storage space is limited, operators often struggle to manage the increasing volume, affecting overall plant operations.
To address this problem, government support is needed to develop a proper supply chain, create farmer awareness, simplify marketing regulations and improve the quality and packaging of FOM and LFOM so that these products can compete effectively with chemical fertilisers.
The new India–Japan partnership could help address another major issue — the high cost of setting up biogas plants.
Many Indian projects depend on imported equipment, which increases capital costs. The cooperation with Japan's Ministry of Economy, Trade and Industry aims to introduce advanced technology, improve plant design and encourage local manufacturing of equipment.
Some Indian companies have already demonstrated that locally manufactured technology can substantially reduce project costs. If such technologies are standardised and adopted more widely, the cost of setting up biogas plants could decrease significantly, making future projects more financially viable.
India has enormous untapped potential for biogas. Animal dung, crop residues and municipal organic waste together could produce nearly 46 million tonnes of compressed biogas every year.
However, achieving this potential will require much more than building new plants.
The sector needs sustainable operation and maintenance models, village-level gas distribution infrastructure, transparent feedstock pricing, stronger markets for organic manure, and greater awareness among farmers. Supportive government policies will also be essential for developing supply chains and improving the commercial value of FOM and LFOM.
"Incentives for FOM / LFOM should not be linked to sales; instead, they should be based on production," said Alok Jain, MEPL Bio Energy LLP.
The new India–Japan initiative offers an opportunity to address these long-standing issues. If technology, policy support and community participation come together, biogas plants can become more than waste treatment facilities. They can become an important source of clean energy, organic fertiliser and additional income for rural India while strengthening the country's circular economy.