In a letter to Finance Minister Nirmala Sitharaman earlier this month, IBA proposed a complete tax waiver for CBG producers during their initial years of operation. The ministry is expected to present the budget on February 1.

In FY2024-25, approximately 100 commercial CBG plants in India contributed to a total sales value of around Rs 12 billion. With a tax waiver, the government would forgo an estimated Rs 1 billion in tax revenue, a short-term loss that IBA believes will yield long-term benefits for the renewable energy sector, encouraging private investment, and generating employment.

The tax relief could help producers offer competitive prices for CBG, further boosting its adoption in India's energy mix. IBA also highlighted the potential for utilizing agricultural residues like paddy straw and crop wastes in biogas production, reducing air pollution and aligning with India’s shift towards greener energy.

Additionally, IBA proposed extending the Haryana model, which incentivizes farmers to stop burning paddy. It recommended scaling this initiative in states with high agricultural residues such as Punjab, Haryana, Uttar Pradesh, and Bihar, before gradually rolling it out nationwide.

The association also proposed developing a framework for selling carbon credits on domestic and international platforms, offering biogas producers new revenue streams and helping India meet its climate targets. Furthermore, IBA called for simplified legislation regarding renewable energy certification and trading, along with grants for transportation of agricultural feedstock to biogas plants.

These measures, IBA said, would stimulate both economic growth and cleaner energy development across India.