The Ministry of New and Renewable Energy (MNRE) has launched a comprehensive Biomass Pellet Programme under the umbrella of its National Bio‑Energy Programme (Phase I: FY 2021-22 to FY 2025-26) to promote bio-energy sources such as pellets, briquettes and non-bagasse cogeneration.With India’s vast agricultural and forestry residues, this initiative seeks to convert waste into clean fuel, supporting the nation’s renewable-energy goals and helping combat air pollution.
The Biomass Programme offers Central Financial Assistance (CFA) to project developers for setting up:
• Biomass briquette and pellet manufacturing plants.
• Biomass (non-bagasse) based cogeneration systems in industries.
The aim is to utilise India’s surplus biomass, reduce stubble-burning, create rural jobs and support sustainable energy generation. The Programme’s Phase-I has a budget of approx. ₹858 crore.
- • Financial support of ₹9 lakh per MTPH manufacturing capacity for pellets/briquettes (max ₹45 lakh per plant).
• Support for cogeneration projects: up to ₹40 lakh per MW installed capacity (max ₹5 crore).
• Applications through the online BioURJA portal only.
• The applicant’s plant must use new equipment/machinery only.
• Self-funded projects are eligible for assistance too.
Recent Revisions and Updates
In June 2025, MNRE revised the guidelines to enhance ease of doing business for MSMEs and stubble-affected states. Key changes include:
• Subsidy linked to actual performance: plants running ≥ 80% capacity receive full CFA; below that, pro-rata.
• SCADA system requirement relaxed—IoT-based monitoring or quarterly data submission allowed.
• Additional ₹140 crore approved for bio-energy (₹52.5 crore for biomass) boosting the budget.
Why It Matters for Businesses & Entrepreneurs
• Access to low-cost financing and subsidy makes biomass pellet and briquette plants financially viable.
• Strong demand exists from industries, power plants, and states battling crop residue burning.
• By converting agro-waste into fuel, businesses create value, cut pollution and aid rural employment.
• For manufacturers of pellet machines, this policy opens a growing market for equipment supply.
How to Participate
- Visit the BioURJA portal and apply for in-principle approval.
- Prepare a project proposal: capacity, raw material availability, equipment list.
- Ensure new equipment is procured, project commissioned within stipulated timelines (12 months for pellet plants).
- Maintain performance data, monitoring requirements and compliance to secure full assistance.
- After commissioning, apply for CFA disbursement following inspection by designated agencies.
The Biomass Programme of MNRE offers a strategic pathway for India to harness its vast biomass resources, reduce dependency on fossil fuels and promote sustainability. With attractive incentives, simplified norms and a push toward compliance-linked subsidies, this initiative is creating a vibrant ecosystem for biomass pellet, briquette manufacturing and cogeneration projects. Businesses and entrepreneurs leveraging this policy stand to gain—not only financially—but by contributing to India’s green energy future.
📞 Interested in setting up a biomass pellet plant in India? Contact Gattuwala Energy for expert consultation, equipment, and government subsidy support.
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