1. To promote the production and usage of biofuels in Madhya Pradesh.
2. To encourage the sustainable use of agricultural residues and non-food biomass for biofuel production.
3. To reduce dependence on fossil fuels and contribute to India’s commitment to achieving net-zero emissions.
4. To generate rural employment and enhance the income of farmers by providing an alternative market for agricultural by-products. v. Develop bio-refinery clusters in potential regions of the state.
5. Set up infrastructure for biomass and waste collection, storage, and transportation.
6. Promote the establishment of biofuel dispensing outlets across urban and rural areas.
7. Provide opportunities for employment and entrepreneurship to youth of the state.
8. Support research, development, and innovation in biofuel technologies

Eligible Units for Incentives

Biofuel manufacturing units – investing more than ₹10 Crore. However, the limit of ₹10 Crore would not apply to Biomass Briquette/Pellet manufacturing plants, Biomass based cogeneration projects, and conversion of existing Sewage Treatment Plants to Biofuel Plants.

Existing units, expanding, or diversifying into biofuel production should have clearly demarcated unit, to be eligible for incentives. The quantum of assistance to expansion or diversification units shall be at par with new standalone units.

Incentives for Biofuel Projects (MP Renewable Energy Policy, 2025)

1. Basic Investment Promotion: Up to ₹200 Cr in 7 equal annual instalments as per IPP 2025.
2. Infrastructure Assistance: 50% subsidy (max ₹5 Cr) for setting up basic infra (power, water, gas, roads, etc.) if land is private or undeveloped govt. land.
3. Green Industrialisation Assistance:
   • 50% up to ₹5 Cr for ETP, STP, pollution control.
   • 50% up to ₹10 Cr for ZLD ETP. Paid in 2 annual instalments.
4. IPR Support: 100% reimbursement (max ₹10 Lakh/unit for 5 years) for filing patents, trademarks, copyrights, GI.
5. Quality Certification: 50% cost or ₹1 Lakh (whichever lower) reimbursed.
6. Electricity Duty Exemption: 100% exemption for 10 years from COD.
7. Energy Development Cess: 100% exemption for 10 years from COD.
8. No Cross-Subsidy Surcharge: Exempt for 10 years on self-used/supplied power (subject to MPERC approval).
9. Stamp Duty: 50% reimbursement on private land purchase.
10. CCIP Custom Package: Projects with ₹500 Cr+ investment eligible under IPP 2025.
11. CBG Sale: Produced CBG can be sold via investor-installed CBG pumps with required clearances.
12. Biomass Procurement by Govt. Plants: MP thermal plants (MPGCL, NTPC, IPPs) to prefer crop residue pellets as per national biomass co-firing policy (7% blend from FY 2025-26).
13. Biomass Collection Equipment Subsidy:
    • 50% by GoI under Sub-Mission on Agricultural Mechanization.
    • Additional 30% (up to ₹20 Lakh) by GoMP.
    • FPOs, Co-ops, and Aggregators encouraged to supply biomass.