Waste to Energy Subsidy Scheme in India (2025 Guide)
India is at a crucial turning point where sustainable energy solutions are no longer an option but a necessity. Among various renewable initiatives, the Waste to Energy subsidy scheme in India has gained momentum under the Ministry of New and Renewable Energy (MNRE). This scheme not only addresses the country’s mounting waste management challenges but also incentivizes industries, municipalities, and entrepreneurs to invest in waste-to-energy plants.
In this guide, we’ll explore the Waste to Energy Programme, subsidy benefits, types of plants, cost factors, and how businesses can take advantage of this scheme in 2025.
Why Waste-to-Energy in India Matters
India generates nearly 62 million tonnes of municipal solid waste annually, of which only a fraction is effectively processed. Traditional waste disposal methods such as landfilling and open dumping cause environmental degradation, groundwater contamination, and methane emissions.
Waste-to-energy (WtE) provides a dual solution—cleaner cities and renewable energy generation. The government has stepped in with financial support to accelerate adoption, making the subsidy scheme highly relevant for investors, municipalities, and entrepreneurs.
Understanding the Waste to Energy Subsidy Scheme in India
The Waste to Energy subsidy scheme in India is part of the National Bioenergy Programme (2021–26, Phase I). According to the official MNRE notification:
The scheme covers urban, industrial, and agricultural waste-to-energy projects.
It offers Central Financial Assistance (CFA) to developers for setting up projects generating Biogas, Bio-CNG, power, or syngas.
Municipal Solid Waste (MSW) incineration-based projects (e.g., incineration, pyrolysis, RDF thermal plants) are not eligible.
Special incentives: Projects in NE states, J&K, Himachal, Uttarakhand, Andaman & Nicobar, Lakshadweep get 20% higher CFA.
The programme ensures financial viability for projects while supporting India’s commitment to clean energy.
Waste to Energy Programme – Key Features
The Waste to Energy Programme provides structured financial support:
Biogas Projects
₹0.25 crore per 12,000 cum/day (Max ₹5 crore/project).
Bio-CNG/Compressed Biogas
₹4 crore per 4,800 kg/day (new biogas plants).
₹3 crore per 4,800 kg/day (existing plants).
Max subsidy: ₹10 crore/project.
Power (Biogas-based)
₹0.75 crore/MW (new biogas plants).
₹0.5 crore/MW (existing plants).
Max subsidy: ₹5 crore/project.
Power based on Agro-industrial Waste (excluding MSW incineration)
₹0.4 crore/MW (Max ₹5 crore/project).
Biomass Gasifiers
₹2,500 per kWe (dual fuel engines).
₹15,000 per kWe (100% gas engines).
₹2 lakh per 300 kWth (thermal).
This makes the scheme attractive for entrepreneurs, cooperatives, industries, and municipal bodies.
Types of Waste to Energy Plants in India
India has adopted multiple waste-to-energy technologies, depending on feedstock and end-use:
Biogas Plants – Use organic waste (food waste, cattle dung, agro-residues) for biogas production.
Bio-CNG Plants – Upgrade biogas to compressed Bio-CNG, suitable for vehicles and industrial fuel.
Biogas-Based Power Plants – Convert biogas into electricity via gas engines or boilers.
Biomass Gasifiers – Convert agro-residues into syngas for electricity or thermal applications.
Agro-Industrial Waste-to-Power Plants – Use sugarcane press mud, crop residues, etc., for energy.
Each type serves a different economic niche, making them suitable for industries, transport, or community-scale projects.
Waste to Energy Plant Cost in India
The cost of a waste-to-energy plant in India varies based on technology, feedstock, and scale:
Small biogas plants: ₹50 lakh – ₹2 crore.
Bio-CNG plants (4,800 kg/day capacity): ₹30–40 crore.
Biogas power plants (1 MW): ₹8–10 crore.
Gasifier systems: ₹2–5 crore, depending on capacity.
The subsidy helps offset these costs significantly, especially for Bio-CNG plants, which have higher initial investment but strong long-term returns due to fuel demand from transport and industry.
Benefits of the Waste to Energy Subsidy Scheme
Financial Feasibility: Reduces upfront investment burden.
Sustainability Impact: Helps businesses achieve ESG goals.
Revenue Generation: Power sale to grids, Bio-CNG to OMCs.
Government Support: Priority under India’s renewable energy roadmap.
Rural & Urban Development: Promotes cleaner cities, rural employment.
Challenges in Adoption
Despite incentives, challenges remain:
Long gestation periods for plant commissioning.
Need for steady feedstock supply (agricultural residues, organic waste).
Regulatory hurdles in clearances (pollution, PESO for Bio-CNG).
Limited awareness among small entrepreneurs.
This is where consultancy support becomes critical—ensuring project reports, approvals, and subsidy applications are handled seamlessly.
The Future of Waste-to-Energy in India
With rapid urbanization and a push for net-zero emissions, the government is expected to expand funding for Bio-CNG and biogas power plants. Industry experts predict that waste-to-energy in India will become a mainstream renewable source by 2030, complementing solar and wind.
Conclusion
The Waste to Energy subsidy scheme in India is a golden opportunity for investors, entrepreneurs, and municipalities to convert waste into wealth while benefiting from government-backed financial support.
By understanding types of plants, costs, and subsidy eligibility, stakeholders can confidently step into this high-potential sector.
If you’re considering setting up a waste-to-energy plant, now is the time. With the right guidance, approvals, and project planning, your investment can deliver sustainable energy, financial returns, and environmental benefits.
