Madhya Pradesh launches biofuel scheme with investment-linked incentives

The Madhya Pradesh government has introduced the ‘Scheme for Implementation of Biofuel Projects in Madhya Pradesh’ to attract investments above Rs 100 million in biofuel infrastructure. 

The scheme covers the full value chain, from feedstock cultivation to distribution and end-use, and aims to set up bio-refinery clusters along with the infrastructure needed for biomass and waste handling.

Biofuel manufacturing and biomass supply units investing over Rs 100 million are eligible for incentives. Exceptions to this investment threshold apply to projects such as biomass briquette or pellet plants, steam generation units, power and cogeneration projects, biomass supply companies, and conversion of sewage treatment plants to biofuel facilities.

Each block will allow registration of only one bioenergy project, under the oversight of the state’s New and Renewable Energy department.

Developers can receive investment assistance of up to Rs 2 billion per project, disbursed in seven installments. Infrastructure support covers 50 per cent of costs up to Rs 50 million for land development and waste management. Effluent treatment plants can get up to Rs 100 million. Other support includes reimbursement of patent-related expenses up to Rs 1 million per kWh and 50 per cent reimbursement for quality certification costs or Rs 100,000, whichever is lower.

The scheme also offers a ten-year exemption from electricity duty, energy development cess, and additional surcharges. Developers will receive 50 per cent reimbursement of stamp duty on private land purchases. Mega units investing over Rs 5 billion may access tailored incentives. Project land will be allocated at 50 per cent of the circle rate.

Land requirements vary by project type: a ten-tonne per day compressed biogas (CBG) plant needs ten acres; bio-coal or briquette plants need 0.02 acres per tonne per day; and biodiesel units need 0.015 acres per kilolitre per day.

The animal husbandry department will assist in land and cow dung supply from shelters, with a mechanism to transfer cow dung and market waste to CBG plants. The agriculture department will mandate the sale and purchase of bio-manure from bio-CNG units at all licensed fertiliser shops.

Only technologies approved by the Ministry of New and Renewable Energy or listed under the National Biofuels Policy 2018 are eligible.