HPCL to Invest $231 Million in Push to Scale Compressed Biogas in India

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Hindustan Petroleum Corp. Ltd. is committing about $231 million, to develop 24 compressed biogas plants across India. This move strengthens HPCL’s position within India’s transition to cleaner energy and aligns with national objectives to cut greenhouse gas emissions, manage agricultural waste and increase energy security.

The announcement is part of HPCL’s crore strategy to expand its renewable, refining and biofuel assets. Recent activity shows a shift toward investing in green energy infrastructure alongside traditional oil and gas, a step toward India’s 2070 net-zero goal.

How the SATAT initiative drives India’s biogas expansion

SATAT (Sustainable Alternative Towards Affordable Transportation), launched in 2018, supports HPCL’s latest investment. Designed to promote large-scale biogas production, the initiative set a goal of establishing 5,000 plants across the country. As of 2025, more than 2,200 Letters of Intent have been issued, and 94 plants are operational.

A government mandate requires 1 percent compressed biogas blending in transportation and domestic cooking gas, increasing to 5 percent by 2029. Investors benefit from guaranteed purchases, fixed long-term prices and capital subsidies. These measures help lower barriers for both public and private developers.

Why biogas matters for rural economies and national security

The impact of biogas extends beyond environmental gains. Rural economies stand to benefit as crop residues such as rice straw and sugarcane bagasse become feedstock. HPCL’s plant in Budaun, Uttar Pradesh, processes about 100 metric tons of rice straw daily to produce 14 tons of biogas and 65 tons of organic manure.

This model helps farmers earn additional income, supports energy decentralization and reduces seasonal stubble burning, which worsens air pollution. On a national level, compressed biogas can reduce reliance on imported natural gas, which currently meets nearly 45 percent of domestic demand.

The scale and impact of HPCL’s 24 biogas facilities

The new plants will be built in agricultural regions with abundant biomass. Each site is expected to produce 10 to 15 tons of biogas per day. Collectively, they could cut tens of thousands of tons of carbon dioxide annually while supplying organic fertilizer. HPCL has already issued 151 Letters of Intent for projects totaling 841 tons per day of projected output. These efforts aim to support rural development and expand the country’s clean energy base.

Barriers to scale include logistics, infrastructure and financing

Challenges remain despite policy support. Inconsistent feedstock supply and limited collection infrastructure complicate operations. Smaller developers struggle to access affordable financing, unlike public-sector firms that can bear early-stage risks.

The outlook for biogas is complex but optimistic. Industry estimates suggest that scaling to 1,200 plants by 2030 and generate as many as 67,000 jobs. Public-sector oil companies such as HPCL are expected to lead, but their success depends on support from agri-tech companies, logistics networks and foreign investors.

Sources:

• Reuters: HPCL to invest $231 million in biogas plants