India’s Biomass Push Sees Soaring Demand, But Supply Lags at 7,000 Tonnes

India’s ambitious mandate introduced in 2021, requiring all thermal power plants to blend 5 percent biomass fuel, has created a daily demand of nearly 1 lakh tonnes of biomass.

However, actual supply stands at a mere 5,000 to 7,000 tonnes per day, exposing a glaring gap that continues to fuel the annual stubble burning crisis in North India. The shortfall not only threatens India’s clean energy transition but also undermines air quality efforts, especially during the high-pollution winter months.

In a recent interaction on a social platform, Mohit Verma, founder of Biomass Energeons India, said that the thick smog that envelopes Delhi and surrounding regions around Diwali continues to be largely driven by stubble burning. “Instead of burning agricultural waste, farmers could be selling it to biomass companies,” Verma said. “That waste becomes fuel, and farmers earn money. It’s a win for both the environment and the economy," he added. His company, which processes more than 50,000 tonnes of agri-waste annually, is part of a fledgling industry struggling to keep up with rising demand.

While the government has laid out strong policy support, including INR 21 lakh per tonne subsidies for non-torrefied pellets and financial assistance covering up to INR 1.05 crore for setting up biomass plants, ground-level implementation continues to lag behind. The biomass manufacturing sector needs to grow from about 1,000 current players to over 10,000 in order to meet the mandated targets. However, the sector remains heavily unorganised, and most agricultural waste, from paddy straw to mustard husk,  is still burned in the open due to a lack of formal collection systems and efficient supply chain networks.

Verma highlighted the geographic mismatch between areas that generate agricultural waste and regions where biomass facilities are concentrated, which further compounds the challenge. Transport and logistics are often unviable over long distances, leaving power plants unable to source enough biomass and farmers with no incentive to stop burning their crop residue. Despite ongoing training initiatives and collaboration with Farmer Producer Organizations (FPOs), the biomass sector continues to face hurdles in scaling up to meet national goals.

The potential, however, is undeniable. Biomass is not only significantly cheaper than fossil fuels, offering up to 35 percent savings, but also energy-efficient. Two-and-a-half kilograms of biomass pellets provide the same energy as a litre of diesel. Many small and medium enterprises, especially in food processing, have already cut their fuel costs by half after switching to biomass systems. Biomass Energeons India, for instance, has reached a turnover of over INR 50 crore within eight years, operating at a daily capacity of 250 tonnes and serving as a proof-of-concept for scalable, clean fuel infrastructure.

Despite the government’s push to increase the biomass blending mandate from 5 percent to 7 percent in the coming year, it remains to be seen whether infrastructure and manufacturing capacity can be ramped up in time to match demand.

At its core, the biomass initiative is about more than energy. It sits at the intersection of agriculture, environment, economy, and industry. Properly implemented, the sector can help reduce carbon emissions, improve rural incomes, and transform crop waste from an environmental hazard into an economic asset. As Verma put it, “This industry isn’t just about fuel, it’s about the future. We’re building an ecosystem that includes farmers, manufacturers, and government bodies. It’s a mission that touches everything from climate goals to community livelihoods.”

He further noted that Biomass Energeons India is also working on a business intelligence platform to integrate real-time data with renewable energy operations. The goal is to help industries, policymakers, and communities make smarter, more sustainable decisions. With industries like steel alone responsible for 7 percent of global carbon emissions, scaling biomass use in industrial heating and energy is becoming not just important, but urgent.

Ultimately, the biomass sector has the potential to transform India’s energy and environmental landscape, but only if the policy vision is backed by rapid infrastructure development, market linkages, and coordinated execution on the ground.