India targets 18,000 MW biomass power from agricultural residue

India has intensified its circular economy push by targeting 18,000 MW of biomass-based power capacity from agricultural residue, led by the Ministry of New and Renewable Energy. The framework opens compliance, carbon-market, and supply-chain opportunities for Indian businesses while formalising markets for crop waste and reducing stubble burning.

India has set a target of 18,000 MW of biomass-based power generation capacity, positioning agricultural residue as a strategic energy resource rather than waste. The Ministry of New and Renewable Energy (MNRE) leads implementation, aligning the target with India's renewable energy roadmap. The figure spans bagasse-based cogeneration, non-bagasse biomass projects, and waste-to-energy initiatives, building on the National Bioenergy Programme. Financial incentives, viability gap funding, and streamlined approvals support faster capacity addition, with central financial assistance available for new plants and modernisation projects.

Sugar-producing states including Uttar Pradesh, Maharashtra, and Karnataka, which already operate biomass and cogeneration projects, are most directly affected and positioned to expand. Developers gain access to central financial assistance, improving investment viability. Farmer producer organisations and rural cooperatives become central to feedstock collection and supply assurance, gaining new income streams. Distribution companies (DISCOMs) and state electricity commissions are affected through power procurement agreements, feed-in tariffs, and long-term power purchase arrangements that the strategy requires for biomass capacity.

Affected entities should monitor MNRE scheme guidelines and access central financial assistance for new plants and modernisation. Developers should track state-level coordination with DISCOMs on power procurement agreements and tariff clarity, alongside feed-in tariff and long-term PPA frameworks set by state electricity commissions. Farmer producer organisations and cooperatives should formalise biomass aggregation and supply chains. Businesses should evaluate opportunities in bioenergy technology, supply-chain logistics, carbon markets, and ESG-aligned investments as the strategy contributes to India's Nationally Determined Contributions.

Key figure — Biomass power target: 18,000 MW from agricultural residue