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Maharashtra’s New CBG Policy 2026: Rs 500 Crore for Waste-to-Fuel Projects

Overview

On  22 April 2026 , the Maharashtra Cabinet approved the  Compressed Biogas (CBG) Policy, 2026 . The government officially released it on  5 May 2026 . Chief Minister Devendra Fadnavis led this decision. The policy provides  ?500 crore  for the financial year 2026-27. It aims to turn organic waste into renewable fuel. The state wants to set up CBG projects in every district.

What Is the Compressed Biogas Policy 2026?

Maharashtra has launched a new policy to promote  Compressed Biogas (CBG) . The state cabinet approved it on  22 April 2026 . The official release happened on  5 May 2026 . Chief Minister  Devendra Fadnavis  heads the government that passed this policy. The state has set aside Rs 500 crore  for the year 2026-27 to support this plan.

What Is Compressed Biogas?

Compressed biogas is a  renewable fuel . It comes from organic waste. The process has two main steps:

  1. Anaerobic digestion  – Bacteria break down waste without oxygen. This produces raw biogas.

  2. Purification  – The raw gas is cleaned to become pure compressed biogas.

CBG works as a fuel for  vehicles  and  industries . It is a clean alternative to petrol and diesel.

Where Does the Waste Come From in Maharashtra?

Maharashtra produces a huge amount of waste every day. The policy uses two types of waste:

Waste Type Amount Generated
Municipal solid waste (urban) 24,500 metric tonnes per day
Agricultural residue More than 20 million metric tonnes per year

This waste is currently a problem. The policy turns it into a valuable resource.

How Will the Policy Be Implemented?

The policy has a clear plan. The government wants one CBG project in  every district  of Maharashtra.

Implementation models:

  • Public-Private Partnership (PPP)  – Government and private companies work together.

  • Hybrid Annuity Model  – A mix of government funding and private investment.

Key rules for each CBG project:

  • Must process at least  200 tonnes  of segregated organic waste per day.

  • Waste must be sorted into  organic and inorganic  categories at the source (homes and businesses).

Who will oversee this?

  • steering committee  led by the  Chief Secretary  of Maharashtra.

  • District-level coordination committees  to manage local work.

What Financial Support Does the Policy Offer?

The government wants to attract investors. So it gives several incentives:

Incentive Details
Viability Gap Funding (VGF) Up to Rs75 lakh per tonne of CBG capacity
Maximum VGF per project Rs15 crore
SGST refund 2.5% refund on State Goods and Services Tax after production starts
Priority services Electricity and water supply to CBG units

Important condition:  If a project does not start operations within  two years , the land allocation will be cancelled. This keeps projects on track.

How Does This Policy Link to National Programmes?

Maharashtra’s CBG policy supports three major national initiatives:

  1. SATAT  (Sustainable Alternative Towards Affordable Transportation) – Promotes CBG as transport fuel.

  2. GOBARdhan  (Galvanising Organic Bio-Agro Resources) – Converts cattle dung and farm waste into biogas.

  3. Swachh Bharat Mission  – Improves solid waste management across India.

Why Is This Policy Important for India’s Future?

The policy connects waste management with renewable energy. It also helps India reach its  Net-Zero target by 2070 . Less waste goes to landfills. Less fossil fuel gets burned. Cleaner air and better farming are added benefits.


FAQ Section

Q1: When was the Maharashtra CBG Policy 2026 approved?
The cabinet approved it on 22 April 2026. The policy was released on 5 May 2026.

Q2: How much money has the government set aside for this policy?
?500 crore for the financial year 2026-27.

Q3: What is the minimum waste processing requirement for one CBG project?
At least 200 tonnes of segregated organic waste per day.

Q4: What is Viability Gap Funding?
It is financial support for infrastructure projects that have a funding gap. The government pays part of the cost to make the project viable.

Q5: What happens if a project does not start in two years?
The land allocation will be cancelled.

Q6: Which national schemes does this policy support?
SATAT, GOBARdhan, and Swachh Bharat Mission.

Q7: How does CBG help the environment?
It turns waste into clean fuel, reduces landfill waste, and cuts down fossil fuel use.

Q8: Who chairs the steering committee for this policy?
The Chief Secretary of Maharashtra.


Exam-Focused Points

  • Policy name:  Compressed Biogas (CBG) Policy, 2026 (Maharashtra)

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