The Ministry of New and Renewable Energy (MNRE) has revised the Central Financial Assistance (CFA) rates for biomass pellet manufacturing units under the National Bioenergy Program.

The program has been promoting the production of briquettes, pellets, and biomass (non-bagasse)-based cogeneration in industries from the financial year 2021-2022 and will be in force to 2025 – 2026.

According to the November 2022 notification, the CFA rate for briquettes or pellet manufacturing plants was ₹0.9 million (~$10,767) per MTPH manufacturing capacity with a maximum CFA of ₹4.5 million (~$53,832.6) per plant.

The rate, which applies to all states and union territories, has now been revised to:

• Briquette manufacturing plant: ₹0.9 million (~$10,767) per MTPH with a maximum of ₹4.5 million (~$53,808) per project
• Non-torrefied pellet manufacturing plant: ₹1 million (~$25,106) per MTPH production capacity or 30% of the capital cost considered for plant and machinery of one MTPH plant, whichever is lower
• Torrefied pellet manufacturing plant: ₹2 million (~$50,214) per MTPH production capacity or 30% of the capital cost considered for plant and machinery of one MTPH plant, whichever is lower

The revised CFA rate will apply to the projects the Ministry receives in the Biourja Portal under Phase-I of the Biomass section of the National Bioenergy Program.

In November 2022, MNRE notified the National Bioenergy Program, valid from FY 2021-22 to FY 2025-26. The program was recommended for implementation in two phases. A budget outlay of ₹8.58 billion (~$104.66 million) was approved for Phase I.

Out of the total budget, ₹6 billion (~$73.18 million) was approved for the waste-to-energy program, ₹1.58 billion (~$19.27 million) for the biomass program, and 1 billion (~$12.19 million) for the biogas program.

The CFA for briquette and pellet manufacturing projects was set at ₹900,000 (~$10.978) per metric ton/hour manufacturing capacity with a maximum CFA of ₹4.5 million (~$54,891) per project.

For biomass (non-bagasse) cogeneration projects, the CFA was set at ₹4 million (~$48,792)/MW (on installed capacity) with a maximum CFA of ₹50 million (~$609,900) per project.

In May, the Ministry of Power mandated that every coal-based thermal power project operated by power generation utilities equipped with bowl mills incorporate a 5% blend of biomass pellets derived from agro residue annually. This mandate will take effect one year from the date this guideline is issued. Subsequently, the obligation will increase to 7% after two years and remain at this level.