The Indian Biogas Association (IBA) has proposed the creation of a Rs 100 billion fund in the forthcoming Union Budget to provide capital subsidies for the biogas industry. The association has also urged the government to raise the capital subsidy by 50 per cent to Rs 60 million per 4.8 tonnes per day (TPD) of compressed biogas (CBG) capacity and to increase the project-wise cap to Rs 250 million. In a statement issued on Sunday, IBA said it would submit its recommendations to the Ministry of New and Renewable Energy and the Ministry of Finance, adding that the proposals have also been raised at several forums ahead of the general Budget. The association has proposed a mandatory blending of at least 5 per cent fermented organic manure (FOM) in overall fertiliser application by 2028, to be increased in phases to 10 per cent by 2030. For Union Budget 2026, IBA said the biogas and CBG sector should be positioned as a fast-maturing pillar of green growth, requiring deeper fiscal support, faster implementation and easier access to finance to unlock large-scale private investment and rural income opportunities. IBA also called for scaling up project incentives by enhancing Central Financial Assistance (CFA). It noted that capital expenditure for CBG plants has risen by more than 50 per cent since the CFA scheme was launched in 2014. In line with this, it recommended increasing the capital subsidy to at least Rs 60 million per 4.8 TPD of CBG capacity and raising the CFA ceiling to Rs 250 million per project to support plants of up to 20 TPD, backed by a minimum corpus of Rs 100 billion. Currently, the scheme provides Rs 40 million per 4.8 TPD, capped at Rs 100 million per project. The association pointed out that the central government allocates around Rs 2 trillion annually towards chemical fertiliser subsidies, which do not add to soil organic content. It suggested that redirecting even 10 per cent of this amount, or about Rs 200–250 billion, towards FOM-linked or carbon-based incentives under nature-based solution frameworks could improve soil health, reduce import dependence and promote climate-smart agriculture. Compared with chemical fertiliser subsidies, IBA said allocations for organic farming schemes remain marginal. It highlighted that the Rs 14.5 billion allocated over three years for market development assistance for organic manure from CBG plants is only an initial step and remains inadequate. Aligning with the Ministry of Petroleum and Natural Gas’s compressed biogas blending obligation, the association suggested that the Ministry of Chemicals and Fertilizers consider introducing a fermented organic manure–chemical fertiliser blending obligation under the Organic–Chemical Fertiliser Blending Programme. IBA also called for carbon monetisation through a green certificate mechanism. It proposed that the government develop a framework allowing biogas and CBG producers to sell carbon credits on domestic and international platforms, supporting climate targets while opening additional revenue streams. Carbon prices in voluntary markets range from about USD 5 to USD 50 per tonne of CO?. Even at the lower end, the carbon premium for CBG is estimated at around Rs 10–12 per kg of methane produced. With nearly 1,000 CBG plants expected by 2030, the market value of CBG-based green certificates is conservatively estimated at about Rs 40 billion. The association further suggested implementing cap-and-trade practices for carbon-intensive entities and subsidising part of the proposed carbon premium pricing mechanism to help kick-start the process.