New Biomass Guidelines to Boost Bioenergy and Ease Business in India

Ministry of New and Renewable Energy (MNRE) has issued updated guidelines for the Biomass Programme under Phase-I of the National Bioenergy Programme. The updated rules to be effective for the period FY 2021–22 to 2025–26 will encourage adoption of clean energy, simplify industry regulatory processes, and ensure effective implementation of biomass technology all over the country.

The new scheme, which was rolled out as part of the Azadi Ka Amrit Mahotsav programme, brings sweeping changes that streamline procedures and invite MSMEs to join in. The amendment addresses historical intricacies in project execution and financing structures and brings down implementation complexity while providing flexibility in business.

A notable adjustment in the regulations is substituting expensive Supervisory Control and Data Acquisition (SCADA) systems with cheaper alternatives like IoT-based monitoring or quarterly reports. The move toward digitalization holds minor players in biomass plants responsible without costing more.

In their attempt to eliminate bureaucratic bottlenecks, the developers of briquette and pellet power plants are currently exempted from the need to submit a number of clearance documents. Streamlining not only shortens the project timeline but also decreases operational barriers for bioenergy entrepreneurs.

The statutes also substituted the previous mandatory two-year agreement of sale requirement with a general agreement of sale. This provision gives developers autonomy to respond to market conditions and change direction according to prevailing demands, hence most likely raising efficiency and competitiveness in the market for biomass products.

On the financial front, the scheme of Central Financial Assistance (CFA) has been restructured. The aid is linked to plant performance in order to render the system more transparent and accountable. Projects running at a minimum of 80% efficiency will qualify for complete subsidy, while those with less than this efficiency will get a proportionate sum based on their output of useful ones.

Another change in procedure is the modification of the period of inspection. The inspection may be conducted within 18 months of date of in-principle clearance or date of commissioning, whichever is later. The modification provides greater flexibility to developers and is in line with ground realities.

Performance test requirements also changed. Instead of conducting working measures on three successive days at 16 hours a day, the new standard requires a consecutive 10-hour test of operation. This is achieved in trying to relinquish simplicity without the loss of credibility, and accuracy in capacity verification.

In response to the urgent necessity to address air pollution from the burning of stubble in north India, the MNRE issued a new mandate for the Delhi-based, Punjab-based, Haryana-based, Rajasthan-based, and Uttar Pradesh NCR district-based manufacturers of biomass pellets. Such manufacturers can now be provided with an option to accept either the MNRE scheme or the Central Pollution Control Board (CPCB) scheme, whichever would be more advantageous to them in financial terms as well as in terms of operational support.

These reforms are anticipated to ease the implementation of biomass-based initiatives to enable the disbursement of subsidies in time and reduce dependence on fossil fuels. Support to the usage of biomass also fits India's vision for overall sustainability, including its commitment to become a net-zero carbon neutral country by 2070.

The new directives are released as part of the initiative of India to move towards clean energy sources and respond to more efficient waste management in the agrarian economy. In focusing on simplification, transparency, and flexibility, MNRE is looking at a situation where utilization of clean energy is not just economically viable but ecologically viable as well.

The programme is also applicable for the burning of stubble, a recurring issue in northern Indian states. Expansion of the incentive to northern Indian state pellet manufacturers now makes the biomass sector likely to be a key driver of lowering air pollution, particularly during the post-harvest period.

Overall, the amendments reflect the pragmatic move of the government to stimulate enterprises, rationalize regulatory processes, and favor clean and efficient energy alternatives. The guidelines also ensure developer compliance, along with opening green bioenergy prospects across India.

Source:
Press Information Bureau, Government of India (PIB Delhi), MNRE Notifies Key Revisions in Biomass Programme Guidelines, Release ID: 2140327, dated 28 June 2025.
Author: Navin Sreejith