MNRE Biomass Subsidy for Pellets has become easier.
In this blog, we will discuss the changes that have occurred in the subsidy advantages offered by the Ministry of New and Renewable Energy (MNRE) to biomass briquette and pellet manufacturing companies. With these improvements, it has become easier to receive subsidy advantages under this plan. We will provide you with complete information on this.
If you work in the Biomass sector, you may have heard from customers, clients, or market investors that they are not receiving MNRE subsidy advantages. Your uncertainty will be clarified because we have worked in this industry for a long time. We also spoke with MNRE officials at their Delhi office, and several of our problems have already been resolved. So, plan your initiatives without reluctance and avoid the fallacy that subsidy benefits are not available. The Indian Government’s Ministry of New and Renewable Energy Department is moving quickly to provide biomass subsidy benefits.
On June 27, 2025, the department issued revised notifications that included numerous modifications to the subsidy claiming process to ensure that you obtain your subsidy benefits as quickly as possible.
As you are all aware, MNRE offers Central Financial Incentives based on output levels.
Planning a briquettes Project Report can provide benefits of up to ₹9 lakh per ton per hour production capability, with a maximum of 5 tons per hour. The maximum benefit for biomass briquettes is ₹45 lakh.
The new biomass pellet rates set by the ministry in July 2024 are as follows:
1. Subsidy for non-torrefied biomass pellets
Producing non-torrefied biomass pellets qualifies for a subsidy of ₹21 lakh per ton per hour production capacity, up to a maximum of 5 tons per hour and up to ₹1 crore 5 lakh in total. This is 30 percent of your machinery’s cost, whichever is lower.
2. Subsidy for Torrefied Pellets
For torrefied pellets, the benefit is doubled, from ₹21 lakh to ₹42 lakh per ton per hour manufacturing capacity, with a maximum capacity of 5 tons per hour, totaling up to ₹2 crore 10 lakh. These are the ministry’s guidelines. You can also download these guidelines from here to view and comprehend the government’s authenticated notifications.
1. Simple IP Approval Process (Prior to Starting Production)
This means that before you begin production in your unit, you must first file IP applications with the Ministry, which may be done through the Bio Urja portal. So, when you are planning a unit before production, such as when applying for a loan or setting up machinery at the same time period, you should submit an MNRE IP application for the capacity of the plant you wish to establish.
After IP approval, you must claim the subsidy. The process has been simplified.
Now you must apply for intellectual property approval. After that, when you start production, there are implementing inspections, which are conducted by nodal authorities such as IREDA or other associated organizations on site. Following the inspection, you are eligible for subsidy benefits based on the production capacity that has been determined. The application process used to take a long time, and there were some technical issues. Now, the department has greatly streamlined it.
2. The Techno-Economic Report is no longer mandatory.
The previous approach required you to submit a techno-economic viability or feasibility report on the Bio Urja portal, which had to be signed by the banker from whom you had obtained the bank loan. Customers have frequently encountered issues where banks refused to sign or certify such techno-feasibility studies because they were unaware of the technical parts; they are familiar with the financial feasibility of your project, but not with the techno-feasibility aspects. This used to cause a lot of difficulty for bankers and investors, and application files were occasionally delayed.
The provision for techno-feasibility reports has been formatted, thus you no longer need to submit this report. This will substantially ease the process of filing applications and organizing your claims.
3. No more site photos and EIA reports.
The next change is that previously, they took high-resolution images of the site. You have to include full-resolution images of your site with your applications. This was also erased.
Along with this, there was a condition requiring you to produce an EIA (Environmental Impact Assessment) report, which is often required for highly hazardous commodities to examine the environmental impact of production. That phrase has also been removed for biomass briquettes and pellets, which would greatly simplify things. You won’t require an EIA certificate.
4. Sales Agreement Flexibility
Furthermore, when we filed the claiming documents following our inspection, the ministry included a clause for a two-year sales agreement. You had to submit a copy of a contract agreement showing that you had an agreement to sell biomass pellets for two years. This was also a very tough provision because generally, when we are producing, it was not necessary to have such an agreement for a two-year timeframe. However, now they have simplified it a lot.
You may send a copy of any off-take agreement, which is an arrangement to pick up or sell your pellets from your facility in the future, or any sales agreement. This signifies that they have lifted the two-year requirement; it is no longer necessary to be at least two years. As a result, you can enter into any type of sales arrangement or future off-take agreement.
When your production has not begun, how can you have a sales agreement in hand?
So, in this scenario, you can demonstrate an off-take agreement; if you begin manufacturing, any XYZ buyer will have an agreement with you to sell to them. The term has also been eliminated, so it does not have to be two years, but can be one year or six months. You only need to submit a sales or off-take agreement so that the Ministry is assured that what you are creating is likewise ready for sale. This is a really beneficial provision.
5. IoT-Based Monitoring is Allowed (Instead of SCADA)
Along with this, many investors were concerned about a very technical and complex aspect: you had to establish a SCADA system or a remote monitoring system at your unit in order to measure production capacity. Because the entire subsidy is related to your plant’s production capacity, the Ministry needed to know how much your unit produced and at what capacity in order to measure it. A SCADA system or a remote monitoring system had to be installed, and its login and production information had to be transmitted to the Ministry.
The Ministry has now issued numerous relaxations in this regard. You no longer require an Internet of Things (IoT)-based monitoring system, which means any internet-based monitoring system that allows you to confirm your site’s production. It’s really simple: you can install any IoT-based monitoring system and share that data with the department, or give an undertaking to report the quarterly production of biomass pellets or briquettes to your department on a quarterly basis.
basis. It’s pretty simple: you can install any IoT-based monitoring system and share the data with the department to confirm that your production scale fits the standards, and the department will issue grants or subsidies appropriately. You can now take advantage of this simplified approach. You can now easily obtain subsidy advantages from MNRE, and processing times will be much minimized.
So, don’t be concerned that you won’t receive MNRE benefits or that there will be significant delays. The agency has shown excellent initiative in this regard, and the biomass sector’s rapid growth across the country is extremely beneficial to companies.
Damodar Valley Corporation recently issued a tender for biomass pellets at five thermal power stations in West Bengal. You can obtain information about these tenders on our website or by contacting our team.
We want to notify you about the other simpler measures they have planned. The next key aspect is that previously, after submitting your IP application and starting production, you had to notify the Ministry that you had started production. However, the strategy for doing so was not defined: how to provide advance notice, whether by mail, documents, physically, or by an option on their site to notify them. This used to cause numerous problems.
Now, the Ministry has included this feature on the Bio Urja webpage. This means that after you begin production in your units, you will be able to update this information on the site. It will be much easier for you to notify the Ministry now, as it was previously rather difficult.
6. Production operation time is reduced from 16 to 10 hours.
This is the most basic and important feature that produced problems for many business units: the inspection agencies for the inspection of your plant to measure how much production your machine or plant is doing each hour, previously considered at least 16 hours of operating working hours per day. This means that in order to measure your plant’s performance, it had to be operational for 16 hours every day. Your production capacity was measured appropriately. However, many investors or firms encountered the difficulty of not having orders.
They couldn’t run their plant continuously for 16 hours for three months in a row since they tracked performance throughout that time period. This was a hugely problematic situation. As a result, the Ministry took this into consideration and streamlined it significantly.
Instead of 16 hours per day, operations would now be limited to 10 hours. This means that, in order to estimate your production capacity, your factory must run for at least 10 hours each day under the new standards. This will make things easier; you can run your plant for at least ten hours and have your production capacity measured.
7. Simplified Performance Benchmark for Full Subsidy
Along with this, the incentives you received, or what we call CFA (Central Financial Assistance), and how much you would receive – whether 100% or less, and in what capacity how much you would receive – this was also a big confusing factor.
For example, suppose you acquired IP for a production capacity of 5 TPH (tons per hour). However, how much does your productivity amount to when measured? What percentage of your rated capacity have you reached? Because 100% of the rated capacity is not always attainable, if your facility is capable of producing 5 TPH, you may not be able to create precisely 5 TPH. Here, it has been much simplified.
If your production capacity is 80% or higher than your rated capacity, you will receive 100% CFA. Simply simply, if your rated capacity is 5 tons per hour, 80% of 5 equals 4. So, if your plant’s production per hour during performance inspections is 4 tons or more, you have achieved 80% or more of your rated capacity and will receive full grants and subsidy benefits based on your rated capacity, which is 5 tons.
However, if you are unable to reach 80% of your rated capability, they have established a standard here. If you reach 50% or less of your rated capability, you will receive no advantage. If you reach between 50% and 80%, you will receive a proportional bonus.
For example, if you do not reach 80% but instead reach 70%, which implies your rated capacity was 5 tons and your production was 3.5 tons, your subsidy benefit will be proportional. If it was 80%, you would receive 100%. Now it’s 70%, so multiply (100 / 80) by 70 to get 87.5%. So you will now receive 87.5% of the subsidies you were expecting. This is a pretty good and simple strategy that they have outlined here. You will not be necessary to run the plant continuously for 16 hours. The minimum is now 10 hours, and if you achieve 80% or more of the rated capacity, you will receive full subsidy advantages. If it is less than that, it is proportionate; if it is less than 50%, you will receive no advantage.
8. Only pellet manufacturing is eligible for subsidies.
Along with this, they have simplified the process so that you only need to provide a 1-minute video of your running plant with a geographical identifier so that they can ensure that it is operational. This is a pretty simple approach that will make you feel at rest. The department has also given an essential clarification. Many of our clients have or intend to build up combination operations for briquettes and pellets in order to reap benefits from both.
However, the agency has stated that you would only receive advantages for pellet manufacture. Please exercise caution if you set up both machines in your plant. This means that whether it is non-torrified or torrified, you will only receive subsidy advantages for installing new machinery, not existing machinery, and only for pellets.
9. A single subsidy scheme at a time (MNRE or CPCB)
Along with this, the Ministry has planned another Clarification addressing the NCR region, which comprises Haryana, Punjab, and the territories surrounding Delhi. As previously mentioned in our videos and ebooks, the Central Pollution Control Board (CPCB) used to provide one-time financial incentives. Many investors and businessmen used to be perplexed about whether they could take both benefits or just one, or whether they could take the CPCB benefit or its expanded amount, because 40% was allowed in that and 30% was allowed in this for machinery costs.
So there was a lot of misunderstanding in the market. Here, the Ministry has emphasized that you can only receive one of the two perks. You can e=Either take advantage of CPCB or MNRE benefits. You also have to provide an undertaking for this. This has been very clearly stated: you can only receive one of the two rewards. When you accept this benefit from the Ministry, you must provide an undertaking declaring that you have not received any benefit for the same plant from the CPCB. So the Ministry has cleared your doubts and clarified this.
Conclusion
These are excellent elements that have been included with the changes and were just notified by the government on June 27, 2025. So, if you are going to invest in biomass pellets, manufacture pellets or briquettes, and are having difficulty accessing all benefits, the Ministry has been extremely proactive in this regard.
