India is reducing greenhouse gas emissions from municipal waste while turning organic waste into clean energy. India generates around 150,000 tonnes of municipal solid waste (MSW) every day, contributing approximately 19 million tonnes of CO₂-equivalent emissions annually. At the same time, about half of this waste is biodegradable, offering strong potential for energy recovery through compressed biogas (CBG). Unlocking this potential is critical for both climate mitigation and advancing a circular economy.
Enabling large-scale waste-to-energy solutions
The Mitigation Action Facility funded project “Waste Solutions for a Circular Economy in India” with co-funding from the European Union, that the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH implements, in partnership with the Ministry of Environment, Forest and Climate Change (MoEFCC) and Ministry of Housing and Urban Affairs (MoHUA), supports cities in scaling up MSW-to-CBG solutions.
A key achievement is the development of an Advisory on CBG Plants Based on Municipal Solid Waste, which provide practical guidance for cities and investors. It defines conditions for commercially viable projects, including the need for at least 100 tonnes per day of source-segregated waste; achievable through cluster approaches across municipalities. It also outlines financial requirements, including the need for capital and operational support for smaller plants, and recommends optimal plant locations near gas infrastructure.
By standardising technical and financial approaches, the Advisory reduces risks and helps cities adopt scalable, low-carbon waste management systems.
Unlocking finance through risk-sharing
Access to finance remains a major barrier in the waste sector. To address this, the project supported the establishment of a Risk Sharing Facility with the Small Industries Development Bank of India.
This facility provides partial debt guarantees of up to 50%, significantly reducing lending risks. As a result, waste management companies have already secured financing for:
- a 50 TPD MSW-to-CBG project (CAPEX)
- a 500 TPD MSW-to-CBG facility (OPEX)
Several additional projects are in the pipeline, showing how innovative financial instruments can mobilise private investment for climate action.
Making source segregation work
A critical success factor for all waste-to-energy solutions is source segregation. The project works across cities such as Bengaluru, Patna, Trichy, Varanasi, and state of Goa to improve waste separation at source.
Proper segregation prevents contamination, improves biogas yields, and protects infrastructure. It also enables dry waste to be channelled to Material Recovery Facilities, where it can be recycled or converted into refuse-derived fuel for industrial use.
This not only improves plant performance but strengthens the entire circular economy by ensuring more waste is reused productively.
Strengthening livelihoods and inclusion
The project also delivers strong socio-economic benefits by integrating informal waste workers into formal systems. So far, 400 informal workers have been linked to social security schemes of Government of India, improving their livelihoods and working conditions.
A dedicated Gender Action Plan supports women through training and the creation of micro-enterprises in waste management, including operating recycling facilities and producing value-added products from waste. These efforts contribute to more inclusive and efficient waste systems.
Supporting policy and systemic change
At the policy level, the project contributes to national and state frameworks that enable long-term transformation. This includes support for Extended Producer Responsibility (EPR), with a roadmap developed for the state of Goa to strengthen plastic waste management and recycling systems.
The project also aligns with national initiatives such as:
- the Sustainable Alternative Towards Affordable Transportation (SATAT) programme, which improves market certainty for CBG
- Swachh Bharat Mission (Urban) 2.0, which provides financial support
- the CBG blending obligation, which ensures long-term demand
Together, these frameworks create a strong enabling environment for scaling up climate-friendly waste solutions.
Key lessons for replication
The project offers important lessons for other regions and cities, within and outside of India:
- Source segregation is non-negotiable: Without clean waste streams, technical and financial performance declines significantly.
- Clear policy guidance accelerate action: Standardised frameworks reduce risks and support investment.
- Innovative finance unlocks investments: Risk-sharing mechanisms can mobilise private capital in challenging sectors.
- Inclusion improves system performance: Integrating informal workers increases recycling efficiency and social equity.
- Waste-to-energy delivers multiple benefits: CBG production reduces emissions, creates clean energy, and strengthens circular resource use.
Outlook
India’s experience shows that municipal waste can be transformed from an environmental burden into a climate solution. With the right combination of policy support, financing mechanisms, and local implementation, cities can significantly reduce emissions while generating clean energy and improving livelihoods.
Looking ahead, the Risk Sharing Facility will continue to support investment in the waste sector. With more than 4,500 cities across the country, the potential to scale up MSW-to-CBG solutions remains substantial.
Realising this potential will require continued collaboration between governments, the private sector, financial institutions, and citizens. The foundations are in place, now the focus is on scaling solutions that turn everyday waste into a key driver of climate action.
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