June 10, 2025

✅ Government Benefits & Support for Setting Up a Biomass Pellet Plant in India (Central & State-wise)

Setting up a biomass pellet plant in India offers multiple incentives from both Central and State Governments, especially under green energy, renewable, and waste-to-energy missions. Below are detailed, point-to-point benefits, subsidies, tax incentives, and criteria.

🔷 1. Central Government Benefits (Pan India)

🔹 MNRE Support (Ministry of New and Renewable Energy)

Scheme: National Bio-Energy Mission
Benefit: Financial assistance for biomass projects up to ₹2.5 crore/MW.
Support areas: Project installation, technology validation, R&D.
Official website

🔹 Capital Subsidy

Up to 35% capital subsidy for eligible biomass pellet units under the MNRE or State Nodal Agency.
Central government encourages co-firing of pellets in thermal power plants — long-term market security.

🔹 GST Benefits

GST for biomass briquettes and pellets is only 5% (HSN Code: 4401), promoting affordability.

🔹 Income Tax Deductions (Section 80JJA)

Section 80JJA: 100% deduction of profits for 5 years for businesses involved in:
- Collection and processing of biodegradable waste into bio-fuel or organic compost.
Applicable to newly established businesses in waste management and bio-energy.

🔷 2. State-Wise Benefits for Biomass Pellet Plants

🔹 Gujarat

Land offered in GIDC Industrial Zones at subsidized rates.
Electricity tariff subsidy ₹1.50 to ₹2/unit for 5 years.
25% Capital subsidy (ceiling up to ₹35 lakhs for MSME).
Interest subsidy: up to 7% for 5 years.
Gujarat Industrial Policy

🔹 Maharashtra

Land under MIDC with simplified clearance.
Capital subsidy up to 30% for green/clean tech projects.
Electricity duty exemption for 10 years.
Maharashtra Energy Development Agency (MEDA)

🔹 Uttar Pradesh

Bioenergy policy gives capital subsidy of 25–30%.
Exemption from electricity duty for 10 years.
100% stamp duty waiver on land purchase for biomass plants.
UPNEDA Official

🔹 Punjab & Haryana

Encourages agro-waste pellet plants to curb stubble burning.
Interest-free loans and CAPEX subsidy of ₹40 lakhs/TPH capacity.
Long-term offtake agreement by Punjab State Power Corporation Limited.
Punjab Energy Development Agency (PEDA)

🔷 3. Per TPH Subsidy & Capacity-Based Benefits

₹30–₹50 lakhs subsidy per TPH (varies by state and project scale).
Larger plants (4-5 TPH and above) are eligible for more schemes like:
- Waste-to-Energy missions
- Private sector participation in biomass co-firing

🔷 4. Land Procurement Benefits

Industrial land available via GIDC/MIDC/State Industrial Parks.
Stamp duty & registration fee waivers in many states.
Some states provide land on long-term lease (e.g., UP, MP, Chhattisgarh).

🔷 5. Electricity Benefits

Subsidized industrial electricity rates
Wheeling & banking of electricity allowed for captive biomass power use.
Net metering allowed for biomass-cum-solar hybrid setups.
Exemption from electricity duty (state-specific: Punjab, Maharashtra, UP).

🔷 6. Investment Size & ROI

Minimum project investment: ₹1.5 crore – ₹5 crore (for 1–3 TPH plant).
ROI: 3–4 years if using own raw materials (e.g., Napier Grass, agro-waste).
Investment in plant is eligible for:
- Depreciation benefit
- Carbon credits

🔷 7. Loan Facilities & Requirements

🔹 Loan Options:

Banks under Priority Sector Lending (PSL) for renewable energy.
SIDBI, NABARD, and IREDA offer low-interest term loans.
Collateral-free loans up to ₹2 crore under CGTMSE for MSMEs.

🔹 Documents/Records Required:

Company PAN, GST, incorporation certificate.
Past ITR (if applicable), projected financials.
DPR (Detailed Project Report) and plant layout.
Land/lease document.
Environmental Clearance/NOC.

🔷 8. Minimum Criteria for Biomass Pellet Company

Registered MSME/Udyam certificate
GST registration
Factory license under local authority
No Pollution clearance from State Pollution Control Board
Power connection (HT line preferable for plants >2 TPH)

🔷 9. Relevant Government Websites

📌 Conclusion:

India offers robust central and state-backed incentives to promote biomass pellet manufacturing. Whether you’re a startup or an established enterprise, leveraging Section 80JJA, state capital subsidies, and loan schemes can make the project highly viable.

⚠️ Disclaimer:

All information is based on publicly available data and government policy references. Please consult the respective nodal agencies or certified consultants for final eligibility and documentation before applying.

📞 Contact Us for Biomass Solutions
📍 Servoday Plants & Equipments Ltd
📞 +91 9427210483 | +91 9427210484
📧 [email protected]
🌐 www.PelletIndia.com
👤 Contact Person: Sanjay Masuria
📲 WhatsApp: +91 9427210483

From Concept to Commissioning. We are with You.
Our policy is simple and transparent:
No undersized parts, no fraud, no fake components—genuinely serving since 1969. 🚀🔥

Tags:

Article