Popular Questions
Biomass wooden pellets are compressed biofuels primarily made from sawdust, agricultural residues, and forestry waste. They serve as a clean-burning, renewable energy alternative to coal and other fossil fuels.
Demand is rapidly increasing due to government policies that require thermal power plants to co-fire with biomass pellets, and as various industries (e.g., food processing, cement, brick kilns) seek cleaner fuel options.
As of 2024-25, power plants must co-fire 5% biomass pellets, rising to 7% in 2025-26.
There are financial incentives, subsidies, and government procurement adjustments to encourage industrial use.
Biomass pellets are price-competitive with coal, and their rates are benchmarked for power utilities as per government guidelines.The government offers subsidies and priority sector lending to support plant setup and operation.
Challenges include seasonal variation in supply, feedstock price fluctuation, and lack of a reliable supply chain.Proper handling and storage are crucial as moisture lowers pellet energy content.
Biomass pellets fall under the 5% GST bracket in India.
Additional Queries Often Asked
General Questions
The Indian government has mandated that thermal power plants co-fire at least 5% biomass pellets with coal from the 2024–25 fiscal year, increasing to 7% from 2025–26. Subsidies and financial assistance, especially under the MNRE’s Biomass Program, support the setup and operation of pellet plants. Priority sector lending and procurement provisions on government portals have also facilitated industry growth.
Biomass wooden pellets are primarily used for power generation, industrial heating, steam production, and increasingly in institutional and rural settings. The power sector is a major consumer due to co-firing mandates, but other buyers span the food processing, brick kilns, cement, and export sectors.
Despite policy drivers, current actual biomass pellet usage in power plants is far below target; only about 165,000 tonnes were co-fired by May 2023 versus an estimated need for 50 million tonnes. National daily pellet production capacity for 2022–23 stood at approximately 7,000 tonnes, translating to just over 2 million tonnes annually—well short of government goals
Technical specifications prioritize Saw Dust based pellets with stringent criteria on moisture content and calorific value; benchmark pricing is periodically set by the government.India both imports and exports wood pellets, with major export destinations including South Korea, Vietnam, Italy, Germany, and the UAE; top import partners are the Netherlands, Indonesia, and China.
The Indian biomass pellets market is expected to keep growing due to renewable energy targets and ongoing government investment in capacity, technology, and infrastructure.The focus is on developing both domestic supply chains and international trade, with India vying to be one of the largest pellet producers and users globally.