Turning crop waste into rural gold: Biomass co-firing needs policy push

In recent years, India has taken important steps to address the interconnected challenges of rural distress, air pollution, and the need for cleaner energy. One such policy is the co-firing of biomass pellets in coal-fired thermal power plants — a measure that is already showing promise and could be scaled further with careful implementation and support.

 

Under the Ministry of Power’s SAMARTH Mission (Sustainable Agrarian Mission on Use of Agri Residue in Thermal Power Plants), all coal-based thermal plants are currently required to replace 5 per cent of their coal with biomass pellets, a proportion that will rise to 7 per cent this year. While these targets may appear modest, they carry significant economic and environmental potential if adopted more broadly and systematically.

 

According to government estimates, India generates over 500 million tonnes of agricultural residues annually. A portion of this is used productively — for fodder, fuelwood, and compost — but approximately 140 million tonnes remain surplus. Much of this is either burned in the fields or discarded, contributing to air pollution and greenhouse gas emissions. Stubble burning in states like Punjab and Haryana accounts for up to 40 per cent of winter air pollution episodes, particularly in the Indo-Gangetic Plain.

 

Converting this biomass into pellets provides a viable alternative. These pellets can be manufactured from a variety of residues (such as rice straw, cotton stalk, mustard husk, or sugarcane bagasse) and used as partial fuel in thermal power stations. Early pilots suggest that biomass co-firing can reduce CO₂ emissions by 15 to 20 per cent for every unit of electricity generated, depending on the blend ratio and fuel source.

 

The rural economic impact is also noteworthy. Studies indicate that farmers can earn an additional ₹3,000 to ₹6,000 per acre by selling residues to pellet manufacturers. For a farmer cultivating 2 acres, this could amount to ₹6,000 to ₹12,000 in supplemental income — especially relevant in regions with high input costs or unpredictable crop prices. In aggregate, if even a third of India’s surplus residue were monetised, it could support 10-20 million farmer families and translate into ₹6,000-24,000 crore in new rural revenues annually.

 

Employment generation is another important dimension. A network of pellet manufacturing units has begun to emerge across northern and central India. These units, often run by small entrepreneurs, employ local workers and stimulate associated supply chains, including transport, aggregation, and machinery servicing. The National Bio Energy Mission has estimated that full-scale deployment of biomass co-firing could create over 50,000 direct jobs, primarily in rural and semi-rural areas.

 

International experience reinforces the value of such an approach. In Europe, countries like Sweden and the United Kingdom have integrated biomass co-firing as a transitional strategy in their energy mix. The UK’s Drax power station, once fully coal-powered, now generates over 80 per cent of its electricity from sustainable biomass. In Japan and South Korea, national energy plans call for co-firing up to 20 per cent biomass in existing coal plants, backed by long-term purchase agreements and dedicated logistics infrastructure.

 

Closer to home, Indonesia has committed to biomass co-firing in 52 coal plants, aiming for a 10 per cent biomass blend by this year. These efforts are framed as bridge solutions that can reduce emissions without requiring immediate, large-scale decommissioning of coal assets — an approach well-aligned with India’s energy realities.

 

Yet, uptake has been uneven. While some public-sector utilities have made progress, others are lagging behind due to concerns about cost, technical compatibility, and fuel supply chains. Some private generators remain hesitant, citing limited pellet availability or uncertain regulatory enforcement. These are not insurmountable obstacles but do require systematic attention.

 

A few policy interventions could help improve implementation. First, power plants would benefit from greater clarity and consistency in biomass procurement norms. Standardising pellet specifications, creating transparent price benchmarks, and ensuring reliable sourcing contracts could reduce friction and improve confidence among both producers and users. Moreover, there should be a mandate for using biomass pellets instead of coal in power plants for 3-5 per cent of all energy generated.

 

Second, capacity-building support — particularly for small pellet manufacturers — could accelerate supply growth. This includes easier access to credit, technical assistance in meeting quality standards, and logistics support to move pellets from rural areas to power hubs.

 

Third, better monitoring and reporting mechanisms are essential. Publishing plant-level co-firing data, tracking emissions reductions, and sharing case studies of successful implementation can help build momentum and public trust. Finally, India might consider aligning co-firing credits with carbon markets or renewable energy certificates, offering additional financial incentives for compliance and performance.

 

As India seeks to meet its net-zero target by 2070 and deliver on its nationally determined contributions, such pragmatic, locally rooted strategies will be essential. Biomass co-firing is not a silver bullet, but it is a bridge solution that can deliver measurable benefits at relatively low cost, especially when compared with the long lead times and capital intensity of new renewables or grid-scale storage.

 

More importantly, it offers a development pathway that is inclusive and balanced. It ties together the interests of farmers, rural workers, energy companies, and environmental advocates — rarely an easy feat in public policy. India has already taken the first steps with the SAMARTH Mission. Strengthening this effort through thoughtful implementation and measured incentives could go a long way in transforming how we think about waste, energy, and prosperity in rural India.

The author  is president, Eversource Capital, and visiting professor in practice at the London School of Economics. He is a former Union Minister and Lok Sabha MP. The views are personal.