MNRE Enhances Financial Assistance for Biomass Utilization to Boost Bioenergy Production

The Ministry of New and Renewable Energy (MNRE) introduced the National Bioenergy Programme (NBP) for the period from FY 2021-22 to 2025-26 on November 2, 2022.

Biomass in India is available from various sources, including forestry waste, agricultural residues, industrial processed waste, and municipal solid waste. Annually, the country produces around 750 million metric tons (MMT) of biomass, with approximately 228 MMT classified as surplus. This surplus biomass can be utilized for heat and energy production, and manufacturing briquettes or pellets.

The Ministry of New and Renewable Energy (MNRE) introduced the National Bioenergy Programme (NBP) for the period from FY 2021-22 to 2025-26 on November 2, 2022. One key component of the NBP is the Scheme to Support Promotion of Manufacturing of Briquettes & Pellets and Biomass (Non-Bagasse) based Cogeneration in Industries. Initially, the Central Financial Assistance (CFA) for briquette/pellet manufacturing plants was set at Rs. 9.0 lakhs per metric ton per hour (MTPH) 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 for pellet manufacturing plants, including the addition of a torrefied pellet manufacturing plant component. The updated CFA for non-torrefied pellet manufacturing plants is now Rs. 21.0 lakhs per MTPH production capacity, with a maximum of Rs. 105 lakhs per project. For torrefied pellet manufacturing plants, the CFA is Rs. 42.0 lakhs per MTPH production capacity, with a maximum of Rs. 210 lakhs per project or 30% of the capital cost considered for plant and machinery of a 1 MTPH plant, whichever is lower.

This revision in financial assistance aims to enhance the utilization of biomass across the country, particularly in states like Punjab, Haryana, and Uttar Pradesh, where it will help manage air quality by reducing stubble burning. The increased CFA is expected to significantly boost the production of bioenergy and promote the sustainable use of biomass resources.