Government's 5% Biomass Mandate Creates 1 Lakh Ton Daily Demand But India Supplies Only 7,000 Tons as Stubble Burning Crisis Persists

NEW DELHI, June 18, 2025 – India's ambitious 2021 policy mandating 5% biomass blending in all central and state power plants has created demand for 1 lakh tons of biomass fuel daily, but current supply reaches merely 5,000-7,000 tons, leaving a critical gap that perpetuates the annual stubble burning crisis plaguing North India, according to Mohit Verma, founder of Biomass Energeons India, during an exclusive interview on The Startup Caffe podcast this week.

The energy sector veteran revealed how policy implementation gaps are undermining both India's Net Zero 2050 commitments and immediate air quality objectives.

"The thick smog around Diwali (October-November) is largely caused by stubble burning," said Verma, whose company processes more than 50,000 tons of agricultural waste annually. "Instead of burning agricultural waste that creates thick smog, farmers can sell this waste to biomass companies. This eliminates stubble burning while generating income – a win-win for environment and economy."

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The policy-reality disconnect exposes fundamental challenges in India's renewable energy transition. While government initiatives provide robust framework – including Rs 21 lakhs per ton subsidy for Non- torrefied Pellets from Ministry of Power and combined support covering up to Rs 1.05 crores or 30% of Machinery cost which ever is less for Rs 3 crore plants – infrastructure scaling remains dramatically insufficient to meet mandated targets.

Critical Policy Implementation Gaps:

Supply Chain Bottlenecks: To meet government-mandated demand, the industry must scale from 1,000 to over 10,000 manufacturers, requiring significant infrastructure investment and coordination.

Raw Material Management: Agricultural waste like soyabean husk, mustard husks, cotton stalks, wheat straw, and paddy straw remains largely unorganized, with farmers defaulting to field burning due to lack of structured collection systems.

Geographic Concentration: Most biomass facilities operate in limited regions while agricultural waste generation spans entire agricultural belts, creating logistics challenges for policy compliance.

Verma's analysis reveals how energy policy effectiveness depends on ground-level execution. "Government is actively promoting biomass through mandatory 5% blending policy, training and capacity building programs, financial incentives and subsidies, penalties for pollution control violations, and collaboration with pollution control boards," he noted, highlighting comprehensive policy support contrasted with implementation shortfalls. This mandate will increase to 7% in coming year

The energy economics demonstrate compelling fundamentals: biomass offers minimum 35% cost savings over fossil fuels, with 1 litre diesel equivalent to 2.5 kg biomass pellets in energy content. Commercial applications such as Food Processing Units, show manufacturers reducing annual fuel costs from Rs 5 lakhs to Rs 2.5-3 lakhs after switching to biomass systems.

However, the sector's transition from "unorganized" to structured industrial ecosystem faces technical hurdles. "This is a highly unorganized sector where we had to learn machinery operations hands-on," Verma explained, reflecting broader challenges in scaling renewable energy infrastructure beyond policy frameworks.

The interview highlighted the intersection of energy policy with environmental and agricultural challenges. Power plants requiring 1 lakh tons daily biomass for compliance represent the same volume that, if left unprocessed, contributes to North India's seasonal air quality crisis through stubble burning.

"Beyond profit, this industry addresses multiple challenges: reducing carbon emissions, controlling climate change, providing additional farmer income, rural upliftment, and creating a cleaner environment for future generations," Verma said, emphasizing the multi-dimensional policy benefits of effective biomass sector scaling.

Government support extends beyond mandates to comprehensive ecosystem development, including collaboration with Farmer Producer Organizations (FPOs), training programs, and profit-sharing projects that transform agricultural waste from environmental liability to economic asset.

The biomass sector's role in India's energy transition extends beyond renewable compliance to addressing structural challenges in agricultural waste management, rural income generation, and industrial fuel diversification. With steel industry alone contributing 7% of global carbon emissions, biomass alternatives become critical for industrial decarbonization aligned with Net Zero targets.

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Energy Sector Applications:

Power Generation: Coal-based plants using biomass blending for regulatory compliance and carbon reduction.

Industrial Heating: Food processing, chemical, pharmaceutical, and manufacturing sectors replacing coal, diesel, and gas with biomass alternatives.

Distributed Energy: Retail applications in bakeries, restaurants, and small-scale manufacturing using biomass for heat energy requirements.

Verma's company achieved Rs 50+ crore turnover within 8 years by operating at the intersection of energy policy and agricultural waste management, demonstrating scalable models for policy implementation. The company's 250+ tons daily production capacity serves as proof-of-concept for the infrastructure scaling required to meet government mandates.

"We're building an ecosystem involving farmers, companies, and government bodies," Verma explained, highlighting the multi-stakeholder coordination essential for energy policy success in India's complex agricultural and industrial landscape.

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