MP's Renewable Energy Policy: Focus on Advanced Biofuels

The Madhya Pradesh government has introduced a forward-looking biofuel policy as part of its Renewable Energy Policy 2025, aiming to set up at least one biofuel plant in every development block. The initiative emphasizes production of advanced biofuels—including compressed biogas (CBG), biodiesel, and bio-coal—while excluding first-generation ethanol.

To drive investment and reduce rural and agricultural waste, the policy offers extensive financial and regulatory support. Under the Basic Investment Promotion Assistance (BIPA) scheme, capital subsidies up to ₹200 crore will be disbursed over seven years. Additional incentives include ₹5 crore for critical infrastructure and up to ₹10 crore for projects implementing zero liquid discharge (ZLD) waste systems.

Each development block will host a single biofuel plant, with investors chosen by a District Committee chaired by the Collector. Government revenue land will be made available at 50% of the circle rate, while forest and agricultural land for biomass use will cost just 10% of the annual guideline rate. Land requirements vary by plant size—e.g., 10 acres for a 10 TPD CBG unit—with leases lasting 30 years, extendable by mutual agreement.

Additional benefits include a 10-year exemption from electricity duty and energy development cess, 50% stamp duty reimbursement for private land purchases, and regulatory exemptions (subject to ERC approval) for third-party power sales.

News by Rahul Yelligetti.