Madhya Pradesh Biofuel Policy 2025: Big Boost for Biomass Entrepreneurs
Madhya Pradesh Biofuel Policy 2025: Big Boost for Biomass Entrepreneurs
The biomass energy sector in India is growing rapidly due to the increasing demand for clean fuel and the government’s strong support for renewable energy. Madhya Pradesh, in particular, has come up with favorable policies that make it an excellent state to start a biomass briquettes or pellets business.
If you are planning to invest in the biofuel sector, this blog will help you understand the special benefits available in Madhya Pradesh State.
Why Madhya Pradesh for Biomass Projects?
The Madhya Pradesh Government has introduced a specific scheme for biofuel projects. A major highlight is that biomass briquettes and pellets are clearly included in the definition of biofuel projects.
This means:
- Even with investment below ₹10 crore, briquette or pellet projects are eligible for subsidy benefits.
- Normally, only projects above ₹10 crore qualify, but biomass briquettes and pellets get a special exception.
So, even small and medium investors can take advantage of this opportunity.
Preferential Market Access
Another big advantage is the preferential order for buying.
- NTPC power plants and other power plants in Madhya Pradesh must give preference to MP-based briquettes and pellets manufacturers.
- This ensures a secure and consistent market for local producers.
Land Allotment at Discounted Rates
The policy provides:
- 50% discount on circle rate for land allotment for such projects.
- This makes it much easier and cheaper for entrepreneurs to acquire land.
Subsidy Benefits
1. State Subsidy – MSME Development Policy 2025 (MP)
- Capital Subsidy up to 40% of investment.
- This is in addition to Central subsidy, making it even more attractive.
- Condition: total subsidy (Central + State) should not exceed total project cost.
2. Central Financial Assistance (MNRE, GoI)
- Briquettes projects: ₹9 lakh per MT (max ₹45 lakh).
- Non-torrefied pellets: ₹21 lakh per MT (max ₹1.05 crore).
- Torrefied pellets: ₹42 lakh per (max ₹2.10 crore).
- OR 30% of machinery cost (whichever is lower).
3. Agriculture Infrastructure Fund (AIF) – Ministry of Agriculture
- Interest subsidy on project loans, reducing the cost of finance.
Other Major Incentives in MP Policy
- 100% Electricity Duty Exemption for 10 years – reduces operational costs for large-scale plants.
- 50% Stamp Duty Refund on land purchase.
- Support for Intellectual Property (IP): 100% reimbursement of trademark/patent registration expenses (up to ₹10 lakh).
- Support for Quality Certification: 50% reimbursement (up to ₹1 lakh).
Biomass Aggregation & Supply Chain Support
Biomass projects depend on raw material like agriculture residues. The MP policy helps in this area too:
- 30% subsidy (up to ₹20 lakh) for machinery like rakers and trailers.
- 50% capital subsidy from Central Government is also available for biomass aggregation machinery.
- Entrepreneurs can combine both benefits for cost-effective raw material collection.
Growing Demand for Biomass Briquettes & Pellets
- The Government of India has increased biomass pellet co-firing in power plants to 7% from this financial year.
- This means a sharp rise in demand across India.
- Apart from power plants, industrial users are also shifting to biomass briquettes and pellets for energy needs.
So, if you have good availability of agricultural residues and your region has power plants or industries nearby, this is the right time to invest.
Easy Financing Options
- Bank loans are easily available under Agriculture Infrastructure Fund (AIF).
- Combined with Central and State subsidies, your project becomes more financially viable.
Conclusion
The Madhya Pradesh Government’s Biofuel Policy along with the MSME Development Policy 2025 provides excellent opportunities for entrepreneurs in the biomass sector.
With:
- Subsidies (State + Central),
- Preference in market access,
- Land at discounted rates,
- And exemptions on duties and taxes,
you can establish a profitable business in biomass briquettes and pellets manufacturing.
Leave a Comment