Biomass Energy Project in India

Biomass Energy Project in India – Scheme, Eligibility, and Financial Support [2025 Guide]

Biomass energy is one of the most promising solutions to India’s growing need for clean and sustainable power. With abundant agricultural and organic waste available across the country, the Government of India is actively promoting biomass briquettes and waste-to-energy projects through attractive financial support and policy backing.

If you're planning to set up a biomass briquettes unit or a waste-to-energy plant, here's everything you need to know about the scheme’s applicability, eligibility, financial assistance, and more.

Period of Applicability

The current biomass energy support scheme under the Ministry of New and Renewable Energy (MNRE) is applicable for the financial year 2021–22 to 2025–26.

However, projects commissioned on or after 1st April 2021 and before 31st March 2026 will be eligible for financial assistance.

This window offers a great opportunity for MSMEs, startups, and private developers to benefit from central government support.

Eligible Entities for Biomass Briquettes Business

The biomass subsidy scheme is open to various types of businesses and institutions. Eligible entities include:

• Private entrepreneurs and companies

• MSMEs (Udyam registered units)

• Startups recognized under Startup India

• Cooperative societies and farmers' groups

• State Nodal Agencies (SNAs) or Urban Local Bodies (ULBs)

• Public Sector Undertakings (PSUs) and government institutions

To qualify, the applicant must ensure proper land ownership or lease documentation, technical feasibility, and submission of a Detailed Project Report (DPR).

Financial Assistance Available for Setting Up Waste-to-Energy Plant

The Ministry of New and Renewable Energy (MNRE) offers Central Financial Assistance (CFA) for different types of waste-to-energy and biomass projects.

Here’s a quick overview of financial support available:

Type of Plant	CFA/ Subsidy Amount
Biomass Briquette Plant (Thermal)	₹45 lakh per MW (thermal output)
Waste to Energy Plant (Biogas/Biomethanation)	₹75 lakh/MW to ₹1.5 crore/MW based on capacity
Pellet-based Power Generation Units	₹30 lakh to ₹70 lakh
Gasifier-based Plants	₹2.5 lakh to ₹10 lakh per 100 kW
Additional Support (VGF)	Up to 20% of the project cost in some states

Service Charge for Biomass Briquettes Business

In many cases, agencies or consultants involved in biomass plant setup and subsidy applications may charge a service fee, which can vary based on the size of the plant and the support scope.

Typical service charges include:

• DPR Preparation: ₹15,000 to ₹40,000

• Subsidy Filing Support: ₹10,000 to ₹25,000

• Registration (MSME, Startup India): ₹2,000 to ₹5,000

• Full Project Consultation: ₹30,000 to ₹1.5 lakh depending on complexity

These costs are often recovered quickly due to the high ROI of biomass projects and available subsidies.

Time Limit for Commissioning of the Plant

To remain eligible for a subsidy, the biomass or waste-to-energy plant must be commissioned within 24 months from the date of the approval letter or sanction.

If commissioning is delayed beyond this period without a valid reason, the financial assistance may be cancelled.

Hence, it is advised to:

• Finalize land and machinery early

• Secure project finance quickly

• Appoint a professional consultant to track deadlines and documentation.

Conclusion

India's push for clean energy has created a powerful business opportunity in the biomass and waste-to-energy sector. Whether you're a startup, MSME, or large company, setting up a biomass briquettes or energy plant can be a profitable, government-supported venture.

With attractive subsidies, low-cost raw materials, and rising industrial demand, this is the ideal time to invest in green energy. But timing, documentation, and proper planning are key to success. For additional information or assistance, please contact us at +91-8989977769.

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