Biomass Programme
Briquette, Pellet & Cogeneration
The Ministry of New and Renewable Energy (MNRE) introduced the Biomass Programme under Phase I of the National Bioenergy Programme to promote biomass briquette and pellet manufacturing plants and biomass-based cogeneration projects using non-bagasse biomass.
Programme Components & CFA Categories
The Biomass Programme covers briquette/pellet manufacturing and non-bagasse biomass-based cogeneration projects
Biomass Briquette Manufacturing
Non-Torrefied Pellet Plants
Torrefied Pellet Plants
Non-Bagasse Biomass Cogeneration
Eligibility & Conditions
Current Application Status
Biomass Briquette Manufacturing Plants
| Parameter | Details |
|---|---|
| Objective | Convert eligible biomass materials into briquettes for use as fuel in suitable industrial and energy applications |
| Potential Feedstock | Eligible agricultural residues and other eligible biomass, subject to scheme requirements and project assessment |
| CFA Rate | ₹9 lakh per MTPH of manufacturing capacity |
| Maximum CFA | ₹45 lakh per project |
| Equipment Condition | Only plants installed with new equipment and machinery are eligible under published scheme conditions |
| MTPH Meaning | Metric tonnes per hour |
Non-Torrefied Biomass Pellet Manufacturing Plants
| Parameter | Details |
|---|---|
| Category | Non-torrefied pellet manufacturing plants |
| CFA Rate | ₹21 lakh per MTPH or 30% of the relevant eligible plant-and-machinery capital cost for a 1 MTPH plant, whichever is lower |
| Maximum CFA | ₹1.05 Crore per project |
| Applicable Amendment | Revised CFA framework introduced in July 2024 |
| Machinery Condition | Revised pellet rates apply to plants using new machinery exclusively for manufacturing pellets, whether torrefied or non-torrefied, and not to the same machine manufacturing both briquettes and pellets |
Torrefied Biomass Pellet Manufacturing Plants
| Parameter | Details |
|---|---|
| Category | Torrefied pellet manufacturing plants |
| CFA Rate | ₹42 lakh per MTPH or 30% of the relevant eligible plant-and-machinery capital cost for a 1 MTPH plant, whichever is lower |
| Maximum CFA | ₹2.1 Crore per project |
| Applicable Amendment | Revised CFA framework introduced in July 2024 |
| Machinery Condition | Revised pellet rates apply to plants using new machinery exclusively for manufacturing pellets, whether torrefied or non-torrefied, and not to the same machine manufacturing both briquettes and pellets |
Biomass (Non-Bagasse) Based Cogeneration Projects
| Parameter | Details |
|---|---|
| Category | Biomass (non-bagasse) based cogeneration projects in industries |
| CFA Rate | ₹40 lakh per MW of installed capacity |
| Maximum CFA | ₹5 crore per project |
| Eligible Biomass | Eligible biomass other than bagasse |
| Important Exclusion | Bagasse-based cogeneration is not supported under this particular Biomass Programme. Other schemes or policy frameworks may have separate provisions, but they should not be presented as benefits under this scheme. |
Eligibility Conditions & Key Requirements
| Condition | Details |
|---|---|
| Supported Activity | The proposed activity must fall within a supported project category |
| Technical Requirements | The project must meet the applicable technical and scheme-specific requirements |
| New Equipment | Only plants installed with new equipment and machinery are eligible under the published scheme conditions |
| Documentation | The applicant must comply with the applicable documentation and approval process |
| Commissioning & Inspection | The project must meet the required commissioning and performance-inspection conditions |
| No Double Subsidy | The applicant must comply with the restriction on claiming capital subsidy from another Central Government ministry or department for the same proposed plant, as stated in the scheme guidelines |
| Financing Route | The applicant must meet the requirements applicable to its financing arrangement and project approval route |
| Self-Funded Projects | The official programme states that self-funded projects can also be eligible for CFA. Eligibility does not mean automatic approval or release of the subsidy. |
| Pellet-Specific Compliance | Biomass pellet manufacturing projects must comply with the relevant pellet-specific CFA provisions and amendments |
Do not assume that a bank loan guarantees subsidy approval, or that a self-funded project is automatically approved. Meeting the broad eligibility conditions does not guarantee approval or payment of financial assistance.
Published CFA Rates
Guideline rates from official scheme documents; not a promise of payment
| Project Category | Published CFA Rate | Maximum CFA | Key Conditions |
|---|---|---|---|
| Biomass Briquette Manufacturing | ₹9 lakh per MTPH | ₹45 lakh per project | New equipment; scheme guidelines apply |
| Non-Torrefied Pellet Plant | ₹21 lakh per MTPH or 30% of eligible plant-and-machinery cost for 1 MTPH, whichever lower | ₹1.05 Crore per project | Revised July 2024; new machinery exclusively for pellets |
| Torrefied Pellet Plant | ₹42 lakh per MTPH or 30% of eligible plant-and-machinery cost for 1 MTPH, whichever lower | ₹2.1 Crore per project | Revised July 2024; new machinery exclusively for pellets |
| Non-Bagasse Biomass Cogeneration | ₹40 lakh per MW of installed capacity | ₹5 crore per project | Bagasse-based cogeneration excluded |
Example: General manufacturing assistance calculation
For a plant with a rated manufacturing capacity of 2 MTPH, the general published rate gives: 2 MTPH × ₹9 lakh = ₹18 lakh.
This is an illustrative calculation using the general rate published on the MNRE scheme page. It is not an approval, an entitlement or a confirmed rate for every pellet project.
Important note on pellet-specific CFA
MNRE published a separate notification dated 16 July 2024 revising CFA rates for biomass pellet manufacturing units. The programme also has a later memorandum dated 4 August 2026 listed by IREDA under the title “GST Excluding for CFA Calculation OM.”
Therefore, the general ₹9 lakh per MTPH rate must not be applied indiscriminately to every pellet manufacturing project. Before publishing a definitive pellet-specific subsidy amount or calculating eligible project cost, verify the full 16 July 2024 notification and the applicable 4 August 2026 memorandum.
MTPH means metric tonnes per hour. The maximum amount, eligible capital cost, applicable amendment and project-specific approval conditions must all be considered before estimating the subsidy. Actual CFA may differ because of eligible capital-cost calculations, applicable GST treatment, performance inspection, project approval, scheme amendments and maximum project limits.
Important Distinction
The Biomass Programme should not be described as a universal subsidy for every biomass, biogas, Bio-CNG or Compressed Biogas (CBG) project. These technologies and project categories may fall under different government programmes. The Biomass Programme specifically covers biomass briquette/pellet manufacturing and biomass-based non-bagasse cogeneration.
Performance Inspection, CUF & Inspection Timeline
For briquette/pellet manufacturing plants, the revised guidelines specify operation at an average of 80% of rated capacity over a continuous 10-hour period for eligibility to receive 100% of eligible CFA.
| Condition | Treatment |
|---|---|
| Plant operates at 80% or above | Eligible to receive 100% of eligible CFA, subject to other conditions |
| Plant operates below 80% | Pro-rata disbursement based on percentage output |
| CUF below 50% | Eligible CFA percentage is zero under the stated formula |
Prescribed CUF Calculation:
CUF = Total briquette/pellet generation during 10 hours ÷ (Rated capacity in metric tonnes per hour × 10 hours) × 100
Inspection Timeline (27 June 2025 revision — Clause 4.4(i))
The inspection period was revised to run within 18 months from commissioning or within 18 months from the date of in-principle approval, whichever is later. The Secretary, MNRE may grant an extension in applicable cases.
The revised document also addresses the inspection timeline and submission of inspection evidence. Applicants should confirm the exact applicable requirements for their sanctioned project with the implementing agency.
Revised Guidelines dated 27 June 2025
MNRE issued an Office Memorandum revising several provisions of the Biomass Programme guidelines
| Provision | Change |
|---|---|
| Techno-economic feasibility report | Removed from the listed documentation for loan-based briquette/pellet manufacturing applications |
| Latest timestamped site photographs | Removed from the relevant documentation list |
| EIA-clearance document | Removed from listed CFA-release documents. This does not exempt a project from environmental approvals or other legal requirements that apply independently. |
| Sale documentation | Revised from a contract for a minimum two-year period to an offtake/sale agreement |
| SCADA/remote-monitoring documentation | Replaced with an IoT-based monitoring solution or an undertaking to share quarterly production data |
| Performance-inspection conditions | Revised for briquette/pellet plants |
| Clause 4.4(i) — Inspection timeline | Revised to within 18 months from commissioning or within 18 months from in-principle approval, whichever is later; Secretary, MNRE may grant extension in applicable cases |
These amendments should be read with the original guidelines rather than as a replacement for every other condition.
GST Treatment for CFA Calculation
IREDA's official National Bioenergy Programme document register lists an Office Memorandum dated 4 August 2026 concerning GST exclusion for CFA calculation. The detailed treatment of GST should therefore be checked against the actual memorandum before finalising a subsidy estimate. Do not assume that GST is always included in, or excluded from, eligible project cost without reviewing the applicable document and project conditions.
Application Process
Published scheme framework; new submissions are currently stopped until further notice
Project Assessment
Identify whether the project is a briquette plant, pellet plant or non-bagasse cogeneration project
Technical & Financial Preparation
Establish capacity, eligible machinery, project cost, feedstock arrangements and financing details
Document Preparation
Assemble the documents required under the applicable version of the guidelines
Portal Submission
Submit the proposal through the BioURJA portal when applications are officially being accepted
Examination & Approval
The implementing agency and MNRE follow the applicable approval route
Installation & Commissioning
Complete the project within the applicable approved timeline and meet scheme conditions
Inspection & Verification
Undergo the prescribed inspection and performance verification
CFA Release
Payment remains subject to approval, eligible cost, inspection results and the applicable guidelines
Documents Checklist
Preparation list; not a substitute for the official project-specific document checklist
Documents That May Be Required
- Applicant and business registration details
- Project description and plant capacity
- Technical specifications of proposed machinery
- Machinery quotations and eligible capital-cost details
- Project cost and financing information
- Bank or financial institution documents, where applicable
Additional Documents
- Site and land-related documents
- Biomass feedstock sourcing information
- Offtake or sale agreement for briquettes/pellets, where applicable
- Monitoring or production-data undertaking, as required
- Commissioning, inspection and performance-related evidence
- Other declarations, undertakings and documents specified by MNRE or implementing agency
The 2025 amendments changed some document requirements. The precise checklist depends on the project category, financing route, applicable amendments and stage of the application.
Commissioning Timelines
Original scheme guidelines provide specified commissioning timelines from in-principle approval
| Project Type | Commissioning Timeline |
|---|---|
| Briquette / Pellet Manufacturing Plants | 12 months from in-principle approval |
| Biomass Non-Bagasse Cogeneration Projects | 24 months from in-principle approval |
Applicants must check the applicable guideline version, approval letter and any valid extension before relying on these timelines. For briquette/pellet projects, performance inspection is particularly important because the revised guidelines link the amount of CFA released to plant output during the prescribed test.
Important Notes
No Dual Capital Subsidy
The scheme guidelines contain a restriction against claiming capital subsidy from another Central Government ministry or department for the same proposed plant. Any proposed combination must be checked against the specific scheme terms and written guidance from the relevant authorities.
Not a Universal Subsidy
The Biomass Programme should not be described as a universal subsidy for every biomass, biogas, Bio-CNG or Compressed Biogas (CBG) project. These technologies and project categories may fall under different government programmes and should not be presented as benefits under this scheme.
Current Status as of 17 October 2026
- The notified Phase I period ended on 31 March 2026.
- BioURJA states that the deadline for new Biomass and Waste-to-Energy applications closed on 31 December 2025.
- The portal states that new applications are stopped until further notice.
- Proposals received on or after 10 October 2024 are stated to be considered after approval of the budget under Phase II of the National Bioenergy Programme.
- The published rates should not be interpreted as a guarantee of current funding availability. Prospective applicants should monitor MNRE and BioURJA for a new official notification.
Need Expert Assistance?
For businesses exploring biomass briquette manufacturing, pellet production or eligible biomass-based industrial cogeneration, the first step is to identify the project category, proposed capacity, machinery, location and relevant government guidelines. Our team can help assess applicable policy provisions and potential scheme options. Any assistance or alternative scheme assessment is subject to the applicable scheme rules and current application status.
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Frequently Asked Questions
Key points about the Biomass Programme
Is the Biomass Subsidy Scheme currently open?
The official BioURJA portal states that the last date for new applications was 31 December 2025 and that new applications are stopped until further notice.
How much subsidy was available for a biomass briquette plant?
The general MNRE scheme page lists ₹9 lakh per MTPH of manufacturing capacity, capped at ₹45 lakh per plant, subject to applicable conditions.
Is the same subsidy rate applicable to every pellet plant?
No. MNRE published a separate CFA-rate revision for pellet manufacturing units on 16 July 2024. The applicable pellet rate and calculation conditions must be verified against that notification and subsequent relevant memoranda (including the 4 August 2026 GST OM).
Can a self-funded project qualify?
Self-funded projects were included as potentially eligible under the published programme, subject to the applicable guidelines and approval conditions.
Is used machinery eligible?
No. The published scheme specifies new equipment and machinery. Existing equipment or used machinery should not be assumed eligible.
Is a CBG plant covered under this scheme?
No. The Biomass Programme covers briquette/pellet manufacturing and biomass-based non-bagasse cogeneration. A CBG project must be assessed under the government programme and guidelines relevant to that project category.
Is this a Maharashtra Government GR?
No. The 27 June 2025 document is an Office Memorandum issued by MNRE, Government of India. It is a Central Government document, not a Maharashtra State Government GR.
Where can the official scheme status be checked?
Visit the MNRE scheme page and the BioURJA portal for official guidelines, notifications and status updates. Links are provided in the Official Sources section below.
What is the inspection timeline?
As per the 27 June 2025 revision (Clause 4.4(i)), inspection runs within 18 months from commissioning or within 18 months from the date of in-principle approval, whichever is later. The Secretary, MNRE may grant an extension in applicable cases.
Is the same machine allowed for briquettes and pellets?
The July 2024 revision specifies that revised pellet rates apply to plants using new machinery exclusively for manufacturing pellets, whether torrefied or non-torrefied, and not to the same machine manufacturing both briquettes and pellets.
Official Documents & Government Notifications
Key official documents that matter for understanding the programme
| Document | Date | Purpose |
|---|---|---|
| Original Biomass Programme guidelines | 2 November 2022 | Original scheme framework and implementation conditions |
| Pellet CFA-rate revision | 16 July 2024 | Separate CFA provisions for pellet manufacturing |
| Biomass Programme guideline revision | 27 June 2025 | Amendments to specified documentation, monitoring and performance provisions |
| Clause 4.4(i) revision | 27 June 2025 | Performance inspection timeline |
| GST exclusion for CFA calculation memorandum | 4 August 2026 | Newer document listed by IREDA; review the full text before applying it to calculations |
| BioURJA programme status | Current portal notice | Application deadline and status of new submissions |
Official Sources
- MNRE — Biomass Programme
- BioURJA — Programme details and application status
- BioURJA — Scheme highlights
- Original Biomass Programme guidelines dated 2 November 2022
- Pellet manufacturing CFA revision dated 16 July 2024
- Revised Biomass Programme guidelines dated 27 June 2025
- Official PIB announcement dated 28 June 2025
- IREDA — National Bioenergy Programme document register
- GST-related CFA calculation memorandum dated 4 August 2026
How Amplus Subsidy Solutions Can Help
Amplus Subsidy Solutions is a government subsidy and industrial incentive consultancy supporting MSMEs and businesses with scheme research, eligibility assessment, documentation guidance and project-related incentive information.
For businesses exploring biomass briquette manufacturing, pellet production or eligible biomass-based industrial cogeneration, the first step is to identify the project category, proposed capacity, machinery, location and relevant government guidelines. Our team can help businesses understand applicable policy provisions and assess potential scheme options based on their project details.
The Biomass Programme discussed on this page is not currently accepting new applications according to the official BioURJA portal. Any assistance or alternative scheme assessment is subject to the applicable scheme rules and current application status.
Last reviewed: 17 October 2026. Check the official MNRE and BioURJA websites for subsequent updates before making an investment or subsidy application decision. The applicable government guidelines and approval letter will prevail in case of any difference.