India’s vision of turning agricultural waste into economic wealth is bold, ambitious and long overdue. A recent government note titled Circular Economy in Agriculture: Waste to Wealth projected that the sector could generate a $2 trillion market by 2050 and create up to 10 million jobs. The message was clear: crop residue, livestock waste and post-harvest losses should no longer be treated as disposal challenges but as engines of rural growth, climate mitigation and energy security.
Yet beyond headline projections and sanctioned funds, the real test lies in implementation. While investments have been substantial and policy frameworks wide-ranging, ground-level outcomes particularly in biomass co-firing and crop residue management reveal uneven progress.
350 Million Tonnes of Waste And Opportunity
India generates nearly 350 million tonnes of agricultural waste annually. This includes paddy straw, husk, stubble, livestock manure, carcasses, post-harvest losses and food waste across supply chains. According to the Union Ministry of New and Renewable Energy, agricultural residues alone could generate over 18,000 MW of power.
Globally, food waste touches 1.3 billion tonnes annually, releasing methane when unmanaged a greenhouse gas far more potent than carbon dioxide. In India, the environmental and economic case for circularity is compelling.
However, agricultural waste is not uniform. North India grapples with seasonal stubble surpluses. Sugarcane-producing states have distinct residue streams. Dairy-intensive belts generate concentrated manure. Post-harvest losses depend on cold storage, logistics and grading infrastructure. Circular agriculture, therefore, demands coordinated interventions across energy, farming, livestock and water sectors a complex undertaking.
The government’s flagship GOBARdhan programme aims to convert cattle dung, crop residues and food waste into compressed biogas (CBG) and organic manure. As of January 2026, 979 biogas plants were operational across over half of India’s districts. Compressed biogas has been integrated into carbon credit trading frameworks, and standards under the Fertiliser Control Order have been simplified.
The Crop Residue Management (CRM) scheme allocated Rs 3,926 crore between 2018-19 and 2025-26 to northern states and ICAR institutions. Over 42,000 Custom Hiring Centres were established, distributing more than 3.24 lakh machines, including Happy Seeders and Super Straw Management Systems, to promote in-situ residue management.
The Agriculture Infrastructure Fund sanctioned Rs 66,310 crore across more than 1.13 lakh projects, mobilising investments exceeding Rs 1.07 lakh crore. These include thousands of cold storage units and processing facilities. The Animal Husbandry Infrastructure Development Fund, with a Rs 15,000 crore corpus, extends circularity to livestock waste systems.
These allocations indicate commitment. What remains less transparent is how many facilities are fully operational, functioning at intended capacity or measurably reducing waste and emissions.
Biomass Co-Firing: Policy Meets Reality
The most measurable component of circular agriculture is biomass co-firing in coal-based thermal power plants. Since 2021, plants have been mandated to substitute part of their coal consumption with agro-residue pellets, with the requirement rising to 7 per cent from FY 2025-26. In 2023, penalties were introduced for non-compliance.
India’s coal-based capacity stands at roughly 213 GW across 191 plants. At 5 per cent co-firing, annual pellet demand would reach nearly 38.5 million metric tonnes. However, in FY 2024-25, actual biomass consumption was just 1.62 million metric tonnes around 4 per cent of the required volume.
A report by the Centre for Science and Environment found that only 68 plants adopted co-firing at all, with nearly 80 per cent of biomass consumption concentrated in Delhi and neighbouring states. Other coal-heavy states reported minimal uptake.
This is despite India having an estimated 228 million tonnes of surplus biomass annually more than sufficient even under a 10 per cent co-firing mandate.
Supply chain constraints, limited pellet manufacturing capacity and technical compatibility issues with boilers have slowed adoption. Manufacturers cite moisture-related rejection rates and lack of certification standards ensuring biomass compatibility without voiding equipment warranties. Some original equipment manufacturers warn that biomass usage may affect liability periods.
In December 2025, the Commission for Air Quality Management issued show-cause notices to six non-compliant plants, proposing environmental compensation of Rs 61.85 crore. However, the rules do not clearly specify how collected penalties should be utilised, raising questions about whether compensation mechanisms are corrective or merely fiscal.
Beyond Stubble Burning
Public debate often narrows agricultural waste to winter stubble burning and Delhi’s air pollution crisis. But losses occur across storage, transport, mandis and retail supply chains. Food waste at household and retail levels receives comparatively less policy attention, despite its environmental footprint.
While technologies such as biochar conversion and advanced waste processing exist, large-scale deployment remains limited. Carcass disposal infrastructure varies widely across states, and operational data on livestock waste management remains sparse.
Accountability Will Define Success
India’s circular economy ambitions in agriculture are necessary and strategically important. The financial allocations are significant. The institutional frameworks exist. But bridging the gap between sanctioned funds and systemic transformation requires transparent monitoring, clear enforcement and outcome-based evaluation.
How much has stubble burning reduced in absolute terms? Are biogas plants operating at full capacity? Are CRM machines consistently used? Are cold storage investments cutting post-harvest losses measurably?
The experience of biomass co-firing illustrates a broader truth: infrastructure alone does not guarantee transition. Regulatory clarity, supply chain readiness and institutional accountability determine results.
Waste can indeed become wealth. Whether it does so at scale will depend less on policy announcements and more on sustained oversight and measurable impact.