Uttar Pradesh’s success in the bioenergy space can be attributed to several key factors. The state boasts abundant feedstock availability, with 13.53 million tonnes of surplus crop residue annually. This agricultural waste, which was often burned in the past, contributing to air pollution, now serves as a valuable resource for bioenergy production. Additionally, the state’s 120 operational sugar mills produce around 25,000 tonnes of press mud daily, providing a steady supply of raw material for various bio-energy processes. To further achieve its significant potential in the bioenergy space, Uttar Pradesh has taken a significant initiative with the launch of its “Bio-Energy Policy 2022”. This policy aims to reduce dependency on fossil fuels and provide cleaner alternatives for various applications, including transportation and industrial use. It has set ambitious targets to be achieved by 2027 and focuses on promoting the production of bio-compressed natural gas, bio-coal, biodiesel and bioethanol.
The policy aims to install compressed biogas (CBG) plants with a total capacity of 1,000 tonnes per day (tpd), and to establish bio-coal plants with a cumulative capacity of 4,000 tpd. Furthermore, the policy plans to set up bioethanol and biodiesel plants with a combined capacity of 2,000 kilolitres per day. To ensure a steady supply of raw materials, the state also plans to cultivate small rotation crops such as Napier grass on barren lands, which will further create additional feedstock.
Incentives
Recognising the need for substantial investments to achieve these goals, Uttar Pradesh has introduced a range of incentives. For CBG projects, the policy offers financial support of up to Rs 200 million, calculated at Rs 7.5 million per tonne of capacity. For bio-coal projects, incentives of up to Rs 200 million are provided at Rs 75,000 per tonne of capacity.
The policy also provides subsidies for biodiesel projects and offers up to Rs 200 million, calculated at Rs 300,000 per kilolitre of production capacity. Beyond these direct financial incentives, the policy introduces a range of additional benefits to create a favourable environment for bioenergy projects. These include subsidies for equipment procurement, with the state offering a 30 per cent subsidy (up to Rs 2 million) on the cost of balers, rackers and trawlers.
Further, it offers a 100 per cent exemption in electricity duty for bioenergy enterprises for ten years from the date of commercial operation. This exemption can substantially reduce operational costs, improving the long-term viability of these projects. The state also provides infrastructure support, offering financial assistance for the construction of approach roads to project sites, with a maximum investment of Rs 500 million for up to 5 km of road construction. Additional benefits include exemptions on development charges levied by development authorities and a 100 per cent stamp duty exemption. Land allocation is a critical component of the policy, with specific requirements outlined for different types of bioenergy plants. For instance, a 10 tpd capacity CBG plant requires 10 acres for the plant itself and an additional 25 acres for storage. Bio-coal plants are allocated 2 acres per 100 tpd capacity, while biodiesel plants need 1.5 acres for every 100 kl per day of production capacity.
Current status
As of June 2024, Uttar Pradesh’s total installed biopower capacity stood at 2.2 GW. The state has installed 12 CBG plants, four biodiesel plants and three bio-coal plants till date. The incentives announced in the bioenergy policy are expected to give a boost to the sector. The implementation of the policy has already shown promising results. As per the latest data, 152 bioenergy projects have received in-principle approval, with 32 projects securing approval from the state level committee. These approved projects represent a total estimated investment of Rs 54.49 billion. Breaking this down by sector, 102 CBG plants with a combined capacity of 847 tpd (84.7 per cent of the 2027 target) have been approved. In the bio-coal sector, 24 plants with a capacity of 1,324 tpd (33 per cent of the target) have been approved. For biodiesel, 26 plants with a capacity of 1,119 kilolitres per day (56 per cent of the 2027 goal) have received approval. Currently, 32 plants with an estimated project cost of Rs 17.89 billion are under various stages of construction. The state has successfully allocated 280 acres of land for 13 bioenergy projects, addressing one of the key challenges in project development.
The way forward
Apart from financial incentives, the state is exploring some other key measures. To streamline the application process, the state has introduced an online application system portal which allows project developers to submit applications with a registration fee of Rs 10,000 per project. Furthermore, the creation of a feedstock portal connecting farmers, farmer producer organisations and panchayats with project developers has helped address one of the key challenges in bioenergy production – ensuring a steady and reliable supply of raw materials.
Overall, the state’s comprehensive approach through the policy, combining financial incentives, land allocation and infrastructure support, is attracting investments and driving sustainable growth. By leveraging its agricultural resources, the state is addressing its energy needs, helping farmers generate more income and reducing pollution. n
Based on a presentation by A.K. Awasthi, I.A.S. (Retd.), Adviser to the Chief Minister, Government of Uttar Pradesh, at Renewable Watch’s Compressed Biogas in India conference
