IBA Calls for Tax Holidays to Boost Biogas Production in India

The Indian Biogas Association (IBA) has proposed tax holidays for compressed biogas (CBG) production to incentivize investment in the sector. Such measures aim to promote renewable energy, boost CBG adoption, and encourage the use of agricultural residues, thereby contributing to India's clean energy goals and economic growth.

The Indian Biogas Association (IBA) has appealed to the finance ministry for comprehensive corporate tax holidays for compressed biogas (CBG) production in the upcoming General Budget. In a bid to attract investment and promote renewable energy, IBA sent a letter this month to Finance Minister Nirmala Sitharaman, emphasizing the need for incentives for businesses willing to invest in CBG production.

IBA proposed a complete corporate tax waiver for CBG producers in the initial operational years. The industry body highlighted potential revenue losses of Rs 100 crore resulting from such a waiver due to Rs 1,200 crore in total CBG sales from operational plants. This short-term fiscal loss is poised to facilitate long-term renewable energy goals, private investment, and job creation in India.

Aligned with India's clean energy transition, tax incentives would benefit CBG producers by enabling competitive pricing and increased adoption in the energy mix. By repurposing agricultural residues, the initiative also aims to curb pollution. IBA advocates for expanding such schemes, currently practiced in Haryana, across states with significant agricultural residue, like Punjab and Bihar, bolstering clean energy growth and farmers' income.