MNRE Revises Biomass Guidelines Under National Bioenergy Programme

The Ministry of New and Renewable Energy (MNRE) has issued a major revision to the guidelines for its Biomass Programme, a key component of the National Bioenergy Programme (Phase-I), which runs from FY 2021-22 to 2025-26.

This update follows the administrative approval originally notified on November 2, 2022, and aims to simplify processes while ensuring effective implementation of biomass-based energy projects across the country.

According to the revised guidelines issued by the Biomass Power Division, several clauses related to documentation and technical requirements for briquette and pellet manufacturing plants have been amended or removed altogether. Specifically, the ministry has done away with the mandatory submission of the techno-economic feasibility report for projects seeking debt or loans, high-resolution site photographs with timestamps, and Environment Impact Assessment (EIA) clearance wherever previously applicable. These changes are expected to ease procedural bottlenecks and accelerate project execution timelines.

Additionally, the requirement to submit long-term contract agreements for the sale of briquettes or pellets, previously set for a minimum duration of two years, has been dropped. Similarly, the earlier demand for details of SCADA or remote monitoring systems installed at these plants is no longer mandatory under the revised framework.

In a significant change to the commissioning process, the ministry clarified that after submitting applications through the BioURJA portal, developers who proceed to commission their plants before receiving in-principle approval from MNRE must mandatorily update the commissioning status on the portal. The in-principle approval will now be subject to the fulfillment of the eligibility criteria defined under the revised scheme guidelines.

The ministry has also introduced major changes to the performance inspection criteria for briquette and pellet manufacturing units. Earlier, plants were required to demonstrate operational capacity over extended periods viz. three consecutive days at 80 percent of rated capacity and three consecutive months at 70 percent of rated capacity. This has now been simplified. Under the revised rule, plants must operate at an average of 80 percent rated capacity for a continuous period of 10 hours to be eligible for 100 percent Central Financial Assistance (CFA).

If a plant is unable to meet the 80 percent threshold, the CFA will be disbursed on a pro-rata basis depending on the achieved Capacity Utilization Factor (CUF) during the 10-hour performance window. For instance, if a plant achieves 73 percent CUF, it will receive 91.25 percent of the eligible CFA. However, if the CUF falls below 50 percent, no CFA will be granted. As part of the inspection requirements, developers will also need to submit a one-minute video and geo-tagged photographs of their facility alongside the inspection report to verify operational status.

The revised guidelines also reiterate that developers cannot claim capital subsidies from more than one central government scheme for the same plant. This clarification aligns with MNRE’s efforts to maintain transparency and prevent duplication of financial benefits.

The MNRE has also incorporated earlier revisions to CFA rates announced on July 16, 2024, specifically for pellet manufacturing plants, distinguishing between non-torrefied and torrefied pellets. These revised rates apply only to plants that exclusively manufacture pellets using new machinery and not to those using multi-purpose equipment for both briquettes and pellets.

In an important clarification for developers operating in pollution-sensitive areas such as the National Capital Territory of Delhi, Punjab, Haryana, and NCR districts of Rajasthan and Uttar Pradesh, the ministry stated that higher CFA benefits may be available through the Central Pollution Control Board (CPCB) under the Ministry of Environment, Forest, and Climate Change. Applicants in these regions are given the option to choose between the MNRE scheme and the CPCB pelletisation scheme but must submit a legally notarised undertaking to confirm they are availing the subsidy from only one source.

These revised guidelines will apply to all projects sanctioned under the Biomass Component of the National Bioenergy Programme Phase-I. The remaining parts of the original guidelines issued on November 2, 2022, will remain unchanged.

This move is aimed at reducing red tape, encouraging faster project deployment, and promoting the use of clean energy through biomass in line with India’s renewable energy targets. The revised memorandum was issued with the approval of the Department of Expenditure and the Minister of New and Renewable Energy.