Biomass in India is available from various sources such as forestry waste, agricultural residue, industrial processed waste, and municipal solid waste. The country produces approximately 750 million metric tons (MMT) of biomass annually, of which 228 MMT is considered surplus. Biomass can be harnessed for multiple uses, including heat and energy production, and in the form of briquettes or pellets.

To promote biomass utilization, the Ministry of New and Renewable Energy (MNRE) launched the National Bioenergy Programme (NBP) for FY 2021-22 to 2025-26, with a focus on various initiatives, including the “Scheme to Support Promotion of Manufacturing of Briquettes & Pellets and Biomass (Non-Bagasse) based Cogeneration in Industries.” Initially, under this scheme, Central Financial Assistance (CFA) for setting up briquette/pellet manufacturing plants was set at Rs. 9.0 lakhs per metric ton per hour (MTPH) of production capacity, with a maximum of Rs. 45.0 lakhs per project.

However, as of July 16, 2024, the MNRE has revised the CFA rates, especially with the addition of support for torrefied pellet manufacturing. The updated CFA for non-torrefied pellet plants is Rs. 21.0 lakhs/MTPH, with a maximum of Rs. 105 lakhs per project. For torrefied pellet plants, the assistance has been increased to Rs. 42.0 lakhs/MTPH, with a maximum of Rs. 210 lakhs per project or 30% of the capital cost for a 1 MTPH plant, whichever is lower.

This revision in financial support is expected to boost biomass utilization across the country, particularly in states like Punjab, Haryana, and Uttar Pradesh, where paddy straw can be effectively utilized. It will also contribute to improved air quality by reducing stubble burning.