Thermal plants missed biomass targets due to supply challenges in FY25: APP

Association of Power Producers noted that the domestic market for torrefied biomass pellets -- mandated for plants equipped with ball and tube mills -- remains significantly underdeveloped

The Association of Power Producers (APP) on Thursday said the inability of several thermal power plants to meet biomass co-firing targets in FY 202425 was primarily due to limited biomass availability and technical constraints -- not a lack of intent or effort by generators.

This comes after the Commission for Air Quality Management (CAQM) issued show-cause notices to six thermal power stations within a 300-km radius of Delhi and proposed environmental compensation of Rs 61.85 crore for the reported shortfall, the Association said in a statement.

APP noted that the domestic market for torrefied biomass pellets -- mandated for plants equipped with ball and tube mills -- remains significantly underdeveloped.

 

The industry continues to face challenges such as insufficient supplier capacity, high rejection rates due to moisture or volatile matter, and the absence of OEM-validated solutions, it stated.

It cited the example of Talwandi Sabo Power Ltd (TSPL), a 1,980-MW plant in Punjab, which struggled to procure adequate torrefied biomass despite floating multiple tenders in FY25. TSPL supported local partners in setting up a torrefied biomass manufacturing facility near its Mansa plant, helping create a circular stubble-to-biofuel ecosystem in the region.

With improved pellet availability, TSPL's co-firing performance has seen a notable rise -- achieving 4.33 per cent co-firing in August of FY26, and reaching 5.07 per cent year-to-date by November 30, 2025 after co-firing 2,50,369 metric tonnes of biomass.

APP emphasized that such progress shows compliance improves as the biomass value chain matures, and that earlier shortfalls were driven by market immaturity rather than operational reluctance.

The Association added that penalizing generators for issues beyond their reasonable control -- under the Environment (Utilisation of Crop Residue by Thermal Power Plants) Rules, 2023 -- could create unnecessary financial stress without accelerating adoption.

APP has urged the government to consider available provisions for relaxation in cases of genuine difficulty, including a one-time waiver of environmental compensation for FY25 or allowing carry-forward of compliance to subsequent years.