Tensions in West Asia continue to keep global energy markets on edge. India imports nearly 85% of its crude oil needs, much of it from West Asia, and supplies faced disruptions due to the Israel-U.S.-Iran war. While the government has diversified its crude oil suppliers, around 90% of India’s LPG imports still transit through the Strait of Hormuz, making any instability in the region a potential risk to India’s energy security.

Over the years, India has pushed several initiatives to promote alternate fuels like compressed biogas to reduce dependence on imported fuel, tackle agricultural waste and support rural incomes. But despite ambitious targets and policy support, progress has remained limited.

The search for an alternative fuel

Biogas is a mixture of methane, CO2 and small quantities of other gases produced by anaerobic digestion of organic matter. It can be processed and compressed to get Compressed Biogas (CBG). It is chemically identical to CNG; renewable, carbon-neutral and can be produced from waste. It can be used directly to produce electricity, heating or as an energy source for cooking.

India has also been trying to blend biogas into its gas supply for at least a decade. The push gathered pace in 2018, when the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative was launched with a target of establishing 5,000 plants by 2023. Only 132 are completed as of June 3, 2026.

The Centre launched the GOBARdhan (Galvanising Organic Bio-Agro Resources Dhan) scheme to increase CBG production. Under this ‘waste to wealth’ programme, the government offered grants of up to ₹50 lakh per district for community biogas plants. ₹564 crore was earmarked for the purchase of biomass collection machinery, while ₹994 crore was allocated to build pipelines connecting biogas plants directly to the gas grid.

However, progress on the ground has remained limited. The lack of infrastructure, poor private investment, difficulties in accessing formal credit and high upfront cost of technologies have stalled progress. Financial support from the government can make biogas projects economically viable. Other incentives, like accelerated depreciation and tax holidays, would also help attract private players.

Impact on cultivation patterns

The development of biogas has been uneven across the world, with Europe, China and the United States accounting for 90% of global production.

Germany is one of the largest producers in Europe, along with France, Denmark and the U.K. The fillip for the sector came in 2000, when Germany introduced the Renewable Energy Sources Act to incentivise production. Over the years, it introduced schemes to guarantee income to producers, gave bonuses to help operators increase their income and encouraged small-scale biogas plants. However, the country’s push for biogas triggered a “corn mania”, with maize cultivation rising sharply because it was highly profitable for farmers. Maize slowly started to replace other food crops. Over a decade later, the government was forced to step in and control this by introducing a cap on the use of maize in biogas plants.

This danger hits close to home. The Economic Survey 2026 noted that maize cultivation in India has increased sharply, potentially affecting crop diversity and food security. It noted that while the national maize yield increased from approximately 2.56 tonnes per hectare in FY16 to roughly 3.78 tonnes per hectare by FY25, the yields for soybeans, sunflower, rapeseed, peanuts and millets, among other crops, have either stagnated or declined.

While this trend could be attributed to technological advancements, ethanol pricing can be an important factor.

The government fixes administered per-litre ethanol prices based on the feedstock used. The price for maize-based ethanol is higher, while the price for rice-based ethanol is lower. The price for molasses-based ethanol is fixed between the two. Between FY22 and FY25, the administered price of maize-based ethanol grew at a compound annual growth rate (CAGR) of 11.7%, making maize more lucrative for farmers.

While maize’s area under cultivation and production jumped between FY22 and FY25, pulses output declined, while oilseeds and other cereals registered only modest growth. This shift is visible in States like Maharashtra and Karnataka, where maize is competing with pulses, oilseeds, soyabean, millets and cotton for land, water and labour.

India imports large quantities of pulses and edible oils to meet demand. Yet, instead of focusing on increasing production, the government’s policy might inadvertently disincentivise farmers from cultivating them. Over time, this could increase India’s dependence on imports and expose domestic food prices to greater volatility during supply shocks.

Denmark, which is targeting to use only biomethane in its gas system by 2030, offers a solution. The government discouraged the use of crops as feedstock, and the primary source is livestock manure and agricultural waste.

Government’s action plan

In 2023, the National Biofuels Coordination Committee approved a mandatory blending obligation. Gas distributors have been mandated to blend CBG into their supply from FY26. It would start at 1% and rise to 5% by FY29. In her Budget speech in February 2024, Finance Minister Nirmala Sitharaman said the phased blending of CBG in CNG for transport and Piped Natural Gas for domestic purposes “will be mandated.”

To meet these targets, the government is ramping up the establishment of plants. In August 2025, while responding to a query in the Lok Sabha, Minister of State Shripad Yesso Naik said, “A total 36 number of medium size biogas plants have been installed under the Biogas Programme of MNRE during the last three years.”

The question is whether the government can replicate India’s ethanol blending programme with CBG. In 2014, just 1.5% of petrol was blended with ethanol. By December 2025, it had hit 20%, five years ahead of the original 2030 target.

Published – July 14, 2026 07:00 am IST

Image used for representation purpose only.
| Photo Credit: Getty Images/iStockphoto

The story so far: Angering enivronmental activists across United Kingdom (U.K), the British government okayed one of the country’s biggest new oil and gas projects —the North Sea Rosebank field— on September 27. The Rishi Sunak government claims that the project was essential for securing the nation’s energy demands.

The move comes mere days after UK Prime Minister Rishi Sunak announced a delay in the ban on sales of new petrol cars from 2030 to 2035, claiming that he needed the public’s support in switching to net zero (carbon emissions). Mr. Sunak claims that Britain could afford to make slower progress in net zero emissions by 2050 as it was ‘so far ahead of every other country in the world’. The watering down of Britain climate action has triggered fears of other European nations following suit.

Mr. Sunak has stood firm by his decision to green light Rosebank, stating that it was a necessary domestic source of fossil fuel and that Britain would still be dependent on oil and gas as one of its fuel sources by 2050. His Energy Security Minister Claire Coutinho has stated that Rosebank will produce less emissions as it would eventually electrify the oil extraction process.

What is the Rosebank field project?

Located 130 kilometres north-west of Shetland islands, the Rosebank oil field was first discovered in 2004 by Chevron. While oil reserve capacity was demonstrated in 2019, the field has remained untapped till now. In 2019, Norwegian oil company Equinor acquired the licences for the project from Chevron. Known for tackling challenging deepwater untapped reserves, this joint venture by Equinor (80%) and British oil honcho Ithaca (20%) will drill for oil at a depth of 1100 metres under water. The project will be developed in two phases, with the first oil extraction scheduled for 2026.

Estimated to pump 300 million barrels of oil, the Rosebank field will comprise of 8% of UK’s total oil production and is estimated to generate 1,600 jobs during construction and 450 UK-based jobs throughout its lifetime — till 2051. Equinor estimates that the project investment will amount to £8.1 billion, of which £3.1 billion has already been invested in the first phase.

The project will reuse a Floating Production Storage and Offloading vessel (FPSO) previously owned by Altera Infrastructure. An FPSO is a ship-like structure which receives fluids through risers from subsea reservoirs and then separates them into crude oil, natural gas, water and impurities. In order to reduce carbon emissions, the FPSO will be prepared for future electrification, cutting down the upstream carbon dioxide (CO2) intensity from 12kg/boe (barrels of oil equivalent) to less than 3 kg/boe.

The Norwegian oil producer had first submitted its environmental proposal in August 2022, which was open for public consultation till September 2022. While initially questioning Equinor about the environmental impact of the project, the North Sea Transition Authority — UK’s oil and gas regulator— okayed the project after considering the project’s net zero action throughout its lifetime. After Equinor made a final investment decision, the Sunak government okayed the project on September 27, 2023, despite protests by climate activists.

Conservatives, Labour & Scotland: Where do they stand on Rosebank?

Throwing his weight behind Rosebank, Mr. Sunak highlighted how important the North Sea oilfield was for UK’s energy security and economy. In an interview with BBC Scotland, he said, “I don’t want our children to be dependent on foreign dictators like Putin for our energy”.

He added that while UK will switch to clean energy, he would prefer to use gas from domestic sources during the transition rather than “import [gas] from abroad at four times the carbon emissions.” The UK government has stated that if investment in new North Sea oil projects is stopped, the nation’s fuel imports will increase by 10% by 2035.

Surprisingly, the Labour party, which opposes development in the North Sea, has said it will not reverse the approval to develop Rosebank if it wins the general election in 2025. Its leader Mr. Keir Starmer said that the party would accept the projects it inherits from this government to ensure stability, if it comes to power in 2025. His remarks were met by protests by Labour supporters outside shadow cabinet members’ offices.

Pulling up the Sunak government for reversing its net zero policies, Ed Miliband, the shadow Secretary of State for Energy Security said that the Labour party will tackle cost of living crisis and the climate crisis in tandem. Claiming that Conservatives lacked a vision for future economic growth, Mr. Miliband asserted that the only way to bring down household bills and secure UK’s economic future was by switching to green energy.

Criticising Mr. Sunak, Scotland’s first Minister Humza Yousaf claimed that Downing Street was in ‘climate denial.’ Taking to the microblogging site X (formerly Twitter), Mr. Yousaf pointed out that as Equinor planned to sell Rosebank’s oil at global prices, the fuel extracted from the site would not remain in Scotland or UK. He also slammed the UK government’s decision to commit to approving 100 new oil & gas licences, posting, “That isn’t climate leadership. It is climate denial.”

Why are climate activists opposing Rosebank?

Climate activists have already been seething over Mr. Sunak’s decision to water down the UK’s climate goals. Activists say that by pushing the ban on new petrol and diesel cars to 2035 and easing transition of home gas boilers to heat pumps, the UK will not be able to achieve its legally-binding 2050 net zero target. By estimations, Rosebank’s carbon emissions will be three times that of the nearby Cambo oil field — approximately 200 million tonnes of CO2, equivalent to operating 56 coal-fired power stations for one year.

The International Energy Agency (IEA) has indicatedthat for limiting global temperature rise to 1.5 degrees Celsius, no new oil and gas projects can be developed. The IEA has also estimated that demand for fossil fuels will fall by 80% by 2050 as more and more people switch to electric cars and solar panels. Hence, big oil fields like Rosebank are unnecessary for meeting energy demands, says the IEA.

Several British lawmakers have pointed out that Rosebank will not aid in bringing down household electric bills as most of the oil extracted (90%) will be sold to the global market across Europe. Equinor, meanwhile, has stated that its oil will be transported via the West of Shetland pipeline to support Europe’s ‘energy security.’ This will ultimately end up in the UK grid, securing the nation’s energy needs, the company avers.

What are the ecological effects?

The North Sea’s Faroe-Shetland Sponge Belt is host to deep sea sponges, a variety of clams and quahogs, already subject to a fragile ecosystem. In a protest held in January outside Downing Street, activists displayed a four-metre whale model — emphasizing the havoc oil pipelines will create when laid underwater along the migration corridor of the fin whale and the sperm whale.

During construction, noise pollution and sediment plumes would likely disrupt habitats of shellfish, marine mammals and cephalopods. Drilling may also harm delicate marine creatures like sponges, corals and slow-moving mammals. The biggest threat to marine life, however, is a deep-sea oil spill which would spread faster due to sea currents, damaging fauna like multiple species of fish, dolphins, orcas, and birds and disrupting the food chain in the area.

Windfall tax & oil incentives

Activists have also claimed that the UK tax-payers will hand over £3.75 billion to Equinor via tax breaks awarded to them by the government, just to develop Rosebank field for oil extraction. They further claim that once the plant is operational, the tax-payers are set to lose more than £750 million as Equinor will reap benefits from future tax breaks and profits earned in its oil sale.

However, Equinor and the UK government refuted any tax benefit for the oil company due to Rosefield. In the wake of the massive profits earned by oil companies during the initial days of the Russian invasion of Ukraine, the UK levied a 35% windfall tax called the Energy Profits Levy beyond the 40% corporation tax already imposed on oil and gas firms. Currently, oil companies like Equinor and Ithaca pay a 75% tax on their UK profits until 2028.

On the other hand, on June 9, 2023, the UK government announced the Energy Security Investment Mechanism which will go into effect post-March 2028. Under this scheme, if oil prices fall to normal levels (pre-Ukraine invasion rates) for a sustained period, then the tax for oil companies will return to 40%. The move is aimed attract investment in UK’s domestic oil fields — especially the North Sea region.