As India steps up efforts to decarbonise industrial heat, biomass-based energy is emerging as a key solution, especially for micro, small and medium enterprises (MSMEs). However, experts and policymakers warn that the biggest challenge lies not in technology, but in securing a steady and reliable supply of bioenergy raw materials.
Industrial heat is among the hardest segments of India energy system to clean up. MSMEs, which contribute nearly one-third of the country manufacturing output, rely heavily on coal, furnace oil and petcoke for heat and steam. This dependence locks them into high emissions and exposes them to fluctuating fuel prices. To break this cycle, the government is increasingly looking at biomass as a cleaner and locally available alternative.
Biomass Offers Nationwide Potential Beyond Solar and Wind
Bioenergy currently accounts for around 12 gigawatts of India’s renewable energy capacity, a modest share compared to solar and wind. Yet its impact is significant because biomass resources are spread across the country. Unlike solar and wind power, which are largely concentrated in a few states, biomass energy can be generated using agricultural residue, municipal solid waste and animal waste available in almost every region.
This makes biomass particularly suitable for providing green steam and industrial heat to sectors dominated by MSMEs, including textiles, food processing, foundries, chemicals and pharmaceuticals. Officials highlighted this potential at a recent conference on biomass adoption for MSMEs, jointly organised by the Union Ministry of New and Renewable Energy (MNRE) and German development agency GIZ.
Raw Material Supply Remains the Weakest Link
Despite its promise, biomass faces serious structural challenges. MNRE Secretary Santosh Sarangi pointed out that India still lacks a mature and integrated biomass supply chain. Availability of raw material remains seasonal, fragmented and poorly organised, making year-round fuel security uncertain for industries.
He stressed that without institutional systems to aggregate, transport and store biomass efficiently, industries will remain hesitant to shift away from fossil fuels. Policymakers are now examining solutions such as biomass development obligations, digital platforms to aggregate biomass supply, standardised green steam supply contracts and stronger linkages with farmer producer organisations.
The government is also relying on programmes like the National Bioenergy Programme, SATAT and GOBARdhan to convert surplus crop residue and waste into usable fuel. These initiatives aim to reduce stubble burning and landfill dumping, while creating additional income opportunities for rural communities.
Technology Gaps and Global Collaboration
Alongside supply issues, technology gaps continue to slow adoption. Sarangi highlighted the need for research and development in multi-fuel boiler technologies that can handle different types of biomass efficiently, especially at smaller scales suited to MSMEs. India is exploring international collaboration, including with Germany, to adapt proven boiler technologies to Indian conditions, while domestic research institutions are expected to step up efforts focused on small and medium industries.
Despite the hurdles, policymakers believe biomass holds unique advantages. Replacing coal with biomass can lower emissions and energy costs for MSMEs, while providing farmers with a market for agricultural residue and reducing air pollution from crop burning. Officials described bioenergy as a “systems solution” that links clean energy, waste management and rural livelihoods.
As India accelerates its industrial decarbonisation push, the future of bioenergy will depend on how quickly the country can secure, standardise and scale biomass supply chains. If these challenges are addressed, biomass could move from the fringes to the mainstream of India’s clean energy transition.