The Madhya Pradesh government has issued an incentive program to implement biofuel projects with investments above ₹100 million (~$1.17 million) through its ‘Scheme for Implementation of Biofuel Projects in Madhya Pradesh’ program.

The program covers all aspects of biofuel production, including feedstock cultivation, prediction technologies, distribution, and utilization.

The program targets developing bio-refinery clusters and infrastructure for biomass, waste collection, and storage and transportation. It will also establish biofuel dispensing outlets across urban and rural areas.

Additionally, the program aims to support research, development, and innovation in biofuel technologies.

The Commissioner of the New and Renewable Energy Department will register the biofuel unit, with only one bio-energy project allowed to be registered in a block area.

Biofuel manufacturing and biomass supply chain units investing over ₹100 million (~$1.17 million) will be eligible for the incentives.

However, the ₹100 million (~$1.17 million) limit will not apply to biomass briquette/pellet manufacturing plants, biomass-based steam generation units, power and cogeneration projects, biomass supply chain companies, and conversion of existing sewage treatment projects to biofuel projects.

Incentives

• Developers can avail of basic investment promotion assistance for each project for up to ₹2 billion (~$23.48 million). The incentive will be disbursed in seven equal installments
• Developers can avail 50% assistance of up to ₹50 million (~$587,020) for developing infrastructure if they acquire private land or get undeveloped government land
• Developers can avail 50% assistance of up to ₹50 million (~$587,020) for developing waste management systems and up to ₹100 million (~$1.17 million) for developing effluent treatment plants. This assistance will be disbursed in two equal installments
• Developers can avail 100% reimbursement on expenses for filing patents, copyrights, trademarks, and geographical indications of up to ₹1 million (~$11,740)/kWh for the first five years
• Developers will receive 50% reimbursement of quality certification cost or ₹100,000 (~$1,174) , whichever is lower
• Developers will receive a 100% electricity duty exemption for ten years
• Developers will be exempted from paying energy development cess for ten years
• Developers will be exempted from paying cross-subsidy surcharge and/or additional surcharge for ten years
• Developers will receive a 50% reimbursement on stamp duty on the purchase of private land for the project
• Mega industrial units with investments above ₹5 billion (~$58.7 million) can avail of customized incentives

Incentives on Project Land

Revenue land will be provided at 50% of the circle rate for establishing and operating bioenergy projects and machinery.

The program has stipulated different minimum land requirements for only the following projects:

A compressed biogas project of ten-ton capacity must have at least ten acres of land, a bio-coal/briquette plant must have 0.02 acres for every ton per day of plant capacity, and a biodiesel project must have 0.015 acres/kL/day of capacity.

The state’s animal husbandry department will facilitate land for animal shelters. It will also ensure cow dung availability in state animal shelters. The state will also develop a mechanism to transfer cow dung from gaushalas and waste from state agricultural produce markets to compressed biogas projects.

To avail of incentives, developers must use technologies approved by the Ministry of New and Renewable Energy or under the National Biofuels Policy 2018.

The state agriculture department will mandate the sale and purchase of bio-manure from bio-CNG projects at all licensed fertilizer shops.

In July 2024, the MNRE revised the Central Financial Assistance rates for biomass pellet manufacturing units under the National Bioenergy Program.

In February 2025, the government set a target of 50% of annual power consumption from renewable energy resources by 2030 under the Madhya Pradesh Renewable Energy Policy 2025.

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