The much-awaited Maharashtra State Compressed Biogas (CBG) Policy 2026 was officially approved and released on May 5, 2026. Stakeholders across the state have been eagerly anticipating this framework, which is designed to upscale a sector where Maharashtra already holds a strong position. The state currently ranks third in India with 24 commissioned CBG plants, trailing only Uttar Pradesh (40) and Gujarat (25).
The policy rightly emphasises the utilisation of municipal organic waste, agricultural residues, and other biodegradable materials as primary raw materials. It aims to empower local self-government bodies to efficiently segregate, collect, and process waste, promoting its use in the CBG sector. By focusing on a circular economy, the state intends to reduce the burden on landfills, improve public health, enhance environmental quality, and significantly lower greenhouse gas (GHG) emissions.
To ensure effective execution, the state government has established committees at various levels to oversee development and implementation. In line with recommendations from the Centre for Science and Environment (CSE), the policy focuses on diverse waste streams while restricting the cultivation of alternative feedstock, such as energy crops, strictly to barren or unused land to avoid land-use conflicts with food production.
While the policy clearly defines its scope and stakeholders, including Urban Local Bodies (ULBs), Public Sector Undertakings (PSUs), and private developers, CSE found one major stakeholder notably absent from the formal list which is City Gas Distribution (CGD) companies. “This is a real big gap, since CGDs are critical for last mile evacuation under SATAT. They should have been included as stakeholders with defined roles in offtake, pipeline tie ups, and steering committee representations,” mentioned Srinivas Kasulla, Tattva Engineering Systems.
To facilitate ease of implementation, the framework is closely aligned with national initiatives such as SATAT (Sustainable Alternative Towards Affordable Transportation), GOBARdhan, the Swachh Bharat Mission, and the National Bioenergy Mission.
A standout feature of this policy is its practical approach to feedstock security, which has historically been a major bottleneck for the sector. The state encourages a multi-feedstock model that utilises everything from sugar factory residues and animal dung to market waste. To ensure a steady supply, the policy promotes long-term contracts with Agricultural Produce Market Committees (APMCs) and sugar factories, a strategy long recommended in CSE research reports.
Furthermore, the state intends to develop CBG hubs in areas with high biomass availability, supported by integrated infrastructure for feedstock sourcing, collection, storage, and transportation. The policy also focuses on strengthening the overall supply chain to resolve existing security issues regarding raw materials.
For the effective use of by-products, the policy pushes for the distribution of bio-fertiliser through registered sales centres of the agriculture department. However, to further improve the uptake of organic manure by farmers, the policy could have benefited from including fertiliser companies as key partners in the value chain. Additionally, drawing from CSE’s experience, a sensitisation program for farmers would be a valuable way to raise awareness of the benefits of bio-fertilisers and address specific agricultural concerns.
The policy introduces significant financial levers to ensure projects are commercially sustainable. Recognising that many CBG initiatives face high initial costs, the state has authorised Viability Gap Funding (VGF) of up to Rs 75 lakh per ton of capacity, with an overall ceiling of Rs 15 crore per project. For the 2026-27 fiscal year alone, a substantial budget of Rs 500 crore has been proposed for VGF support.
To move projects from the planning stage to active production, the state has established a rigorous three-tier committee structure:
· State-Level Steering Committee: Led by the chief secretary, this body handles strategic oversight, inter-departmental coordination, and policy amendments.
· Executive Committee: This committee monitors implementation progress and resolves administrative or technical challenges.
· District Compressed Biogas Coordination Committees (DBCC): Headed by district collectors, these committees are tasked with identifying project sites, facilitating land allocation, and coordinating with Farmer Producer Organizations (FPOs) for raw material collection.
This localised approach is complemented by a single-window clearance system and a digital dashboard to monitor project progress in real-time.
The policy provides land on a lease basis at a concessional rate of 0.7 per cent of the Ready Reckoner (RR) rate. To ensure the actual commissioning of plants on the ground, the policy specifically mandates that land allocation will be cancelled if the project does not become operational within two years.
If government land is available, it will be prioritised for CBG projects, subject to environmental and pollution clearances. Additional incentives include a 2.5 per cent refund on State Goods and Services Tax (SGST) once production begins. By treating CBG units as priority infrastructure for water and electricity access, Maharashtra is sending a clear signal that it is open for serious bioenergy investment.
The policy rightly addresses the need for “hand-holding” within the sector by establishing a District-level Project Facilitation Cell. This cell provides a single-window facility for developers and a dashboard for monitoring implementation.
Furthermore, a robust monitoring and evaluation system has been introduced to oversee project implementation, quantify waste processed and CBG produced, and estimate subsequent carbon emission reductions. This system will periodically review project outcomes to ensure transparency and accountability.
As Srinivas Kasulla of Tattva Engineering Systems noted, “Policies are usually judged by good intentions. This one will be judged by the impact it creates on the ground, and that impact is going to be huge. Maharashtra has managed to bring SATAT, GOBARdhan, and Swachh Bharat together in a way that actually works.”
The policy has integrated several structural measures advocated by CSE to ensure the sector’s long-term sustainability including feedstock security and supply chains, decentralised institutional framework and financial support for high OpEx. However, despite these strengths, the policy could be further strengthened by addressing remaining gaps identified in the broader bioenergy ecosystem like inclusion of CGD companies, strengthening the by-product value chain and farmer sensitisation.