19 June 2025, India’s renewable energy journey is hitting a critical roadblock as the biomass energy sector struggles to meet soaring demand. The government’s 2021 mandate requiring thermal power plants to co-fire 5% biomass fuel has created a daily requirement of nearly 1 lakh tonnes. Yet, actual biomass supply remains alarmingly low hovering between 5,000 to 7,000 tonnes per day highlighting a major gap that threatens to derail both energy and environmental goals.

This supply-demand mismatch is worsening the annual stubble-burning crisis in North India, contributing significantly to hazardous air pollution during winter months. In a recent discussion on a public forum, Mohit Verma, founder of Biomass Energeons India, emphasized the ongoing impact. “The thick smog over Delhi around Diwali is still largely caused by stubble burning. Instead of burning agri-waste, farmers can sell it to biomass companies. That waste becomes fuel and a source of income,” he said.

His company, which processes more than 50,000 tonnes of agri-residue annually, stands as one of the few organized players in this nascent but high-potential sector. Despite a strong push from policymakers including a subsidy of INR 21 lakh per tonne (USD 0.024 million per tonne) for non-torrefied pellets and up to INR 1.05 crore (USD 0.12 million) for new biomass plant setups the ecosystem remains severely underdeveloped. India needs at least 10,000 biomass manufacturers to meet its clean energy mandate but currently has only around 1,000.

The problem is compounded by poor logistics and supply chain infrastructure. Most biomass is generated in rural farmlands, while biomass-consuming facilities are often located far away. The lack of efficient collection systems and high transportation costs make the supply chain financially unviable for both farmers and processors.

Efforts are underway to train farmers and engage Farmer Producer Organizations (FPOs), but these alone aren’t enough. Verma also pointed out the geographic mismatch and the urgent need for better policy execution and local supply chain linkages.

Despite challenges, the benefits of biomass are compelling. Biomass fuel can be 35% cheaper than fossil fuels. Just 2.5 kilograms of biomass pellets can deliver the same energy output as a litre of diesel. Small and medium enterprises in sectors like food processing have already halved their fuel costs by switching to biomass systems.

Biomass Energeons India, with an annual turnover of over INR 50 crore (USD 5.8 million) and a daily capacity of 250 tonnes, demonstrates that scaling biomass infrastructure is possible. The company is also working on a business intelligence platform that will integrate real-time renewable energy data to support smarter decisions for industries and policymakers.

With the government set to raise the biomass blending mandate to 7%, the pressure is on to ramp up production capacity, improve rural market linkages, and build a robust ecosystem. As Verma notes, “This is not just about fuel it’s about transforming waste into opportunity and building a sustainable future.”