Revised Guidelines Under The Biomass Programme
Kartavya Desk Staff
Context: The Ministry of New and Renewable Energy (MNRE) revised guidelines under the Biomass Programme (Phase-I, 2021–26).
• Aim to streamline clean energy adoption, support MSMEs, and address stubble burning with more flexibility and financial incentives.
About Revised Guidelines Under the Biomass Programme:
• Launched by: MNRE under National Bioenergy Programme Phase-I
• Term: 2021–22 to 2025–26
• Objective: Promote briquette/pellet manufacturing and biomass (non-bagasse) based cogeneration in industries.
• Targeted Plants: Biomass briquette/pellet units & industrial biomass-based cogeneration setups.
Key Features:
• CFA Support: ₹9 lakh per MTPH for briquette/pellet plants (max ₹45 lakh/plant) ₹40 lakh/MW for cogeneration projects (max ₹5 crore/project) E.g. A 2 MTPH pellet plant can avail ₹18 lakh assistance.
• ₹9 lakh per MTPH for briquette/pellet plants (max ₹45 lakh/plant)
• ₹40 lakh/MW for cogeneration projects (max ₹5 crore/project)
• E.g. A 2 MTPH pellet plant can avail ₹18 lakh assistance.
• Monitoring Mechanism: Mandates Supervisory Control and Data Acquisition (SCADA) or IoT-based remote monitoring for transparency.
• Eligibility Criteria: Only new equipment eligible for subsidy and projects to be routed via an online portal.
• Inspection Agencies: SNAs and Sardar Swaran Singh National Institute of Bio-Energy (SSS-NIBE)
Revised Biomass Guidelines:
• Simplified Documentation: Removes several clearance paperwork requirements for MSMEs.
• Flexible Sale Agreements: Replaces mandatory 2-year contracts with general sales agreements.
• IoT-based Monitoring: Allows cost-effective digital monitoring over expensive SCADA.
• Performance-based Subsidy: Projects with 80%+ operation receive full Central Financial Assistance (CFA) and others get pro-rata. E.g. A plant operating at 70% will get 7/8th of eligible CFA.
• Projects with 80%+ operation receive full Central Financial Assistance (CFA) and others get pro-rata.
• E.g. A plant operating at 70% will get 7/8th of eligible CFA.
• Shortened Inspection Duration: 3-day 16-hour inspection now reduced to 10 hours continuous operation.
• Stubble Management Provision: Pellet producers in Delhi, Punjab, Haryana, NCR can choose MNRE or CPCB support scheme.
Need for Revision:
• Regulatory Overload for MSMEs: Complex documentation and multi-tier approvals discouraged small biomass entrepreneurs from participating in the scheme effectively.
E.g. MSMEs lacked capacity to navigate environmental and financial compliance burdens.
• High Monitoring Costs: Mandating SCADA systems increased capital burden for low-scale biomass units, making adoption economically unviable.
E.g. A SCADA system costs ₹20–30 lakh, unaffordable for plants under 2 MTPH capacity.
• Ineffective Stubble Management: Northern states faced persistent crop residue burning due to inadequate support for biomass pelletization infrastructure.
E.g. Punjab alone generates over 20 million tonnes of paddy stubble annually – CEEW.
• Inflexible CFA Norms: Linking subsidy only to 80% plant performance excluded semi-operational units, delaying uptake and limiting rural biomass penetration.
E.g. Plants facing seasonal feedstock issues couldn’t qualify despite viable operation.
Significance of the Revisions
• Improved Business Viability: Simplified contracts and reduced paperwork attract more private sector investment, especially from decentralized players.
E.g. General sale agreements allow local pellet traders to operate without fixed buyers.
• Inclusive Technological Access: Allowing IoT or quarterly monitoring enables low-cost compliance, boosting digital integration in Tier-2/3 biomass units.
E.g. IoT solutions cost 70% less than SCADA systems for data tracking.
• Support for India’s Climate Goals: Enhanced biomass usage directly contributes to reduced GHG emissions and helps transition from fossil fuels.
E.g. MNRE data estimates 1 MW biomass saves ~1,000 tonnes of CO₂/year.
• Boost to Rural Circular Economy: Localised biomass plants promote waste-to-wealth conversion, create jobs, and support farm income diversification.
E.g. Briquette units generate ~10–15 direct jobs per MTPH of installed capacity.
• Transparent and Targeted Subsidy: Output-based disbursement ensures only productive and operational plants receive financial support, curbing misuse.
E.g. Plants operating at 75% PLF get proportionate CFA, incentivising higher efficiency.
Conclusion
The revised biomass guidelines represent a pragmatic step towards decarbonising India’s energy matrix while empowering MSMEs. By linking incentives to performance and simplifying processes, MNRE strengthens both environmental outcomes and industrial innovation.
• Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objectives? Explain. (UPSC-2022)