Biofuel Scheme

29 Apr 2025

Biofuel Scheme

Recently the Government of Madhya Pradesh launched a comprehensive biofuel scheme to boost the production and use of Compressed Biogas (CBG), supporting sustainable energy and rural development.

About the Biofuel Scheme of Madhya Pradesh (2025)

  • Objective: To encourage investment in biofuel infrastructure, ensure biomass availability, improve waste management, and support rural livelihoods through a sustainable energy ecosystem.
  • Capital and Infrastructure Support: Offers investment promotion assistance (10–40%), infrastructure grants (up to ₹5 crore), and green industrialisation incentives (up to ₹10 crore for ZLD systems).
  • Land and Utility Benefits: Includes land subsidies, stamp duty reimbursement, 100% exemption on electricity duty, and support for approach road development.
  • Feedstock Security and Ecosystem Development: Implements a “one plant, one block” policy, biomass sourcing contracts via SATAT, and support for organic manure management.
  • Digital and Distribution Initiatives: Proposes an IT-based portal, enables CBG pump installation, and mandates licensed sale of biomanure to support offtake and usage.

Significance of the Scheme

  • Supports rural economy by ensuring farmer participation and income through waste monetization.
  • Reduces waste through organized collection from markets and gaushalas.
  • Promotes green energy transition and rural industrialisation.
  • Helps manage the FOM surplus, a major viability challenge for CBG units.
  • Encourages public-private partnerships and builds investor confidence in the bioenergy sector.

About Biofuel

  • Biofuels are renewable fuels derived from organic matter (biomass) and serve as eco-friendly alternatives to fossil fuels, aiding in reducing greenhouse gas emissions.
  • Compressed Biogas (CBG): CBG is a purified form of biogas with over 90% methane content, comparable to compressed natural gas (CNG), and used as a clean automotive and domestic fuel.
  • Sources of Biofuel

Source Type Example Feedstock
Sugar-based Sugarcane juice, molasses
Grain-based Maize, rice, damaged food grains
Lignocellulosic Crop residue, bamboo, bagasse
Animal waste Cow dung, poultry litter
Urban waste Municipal solid waste, organic kitchen waste
Industrial waste Spent wash, press mud

National Schemes to Promote Biofuels

Scheme Objective Target/Key Feature
Ethanol Blended Petrol (EBP) Promote ethanol blending in petrol to reduce crude oil imports and emissions Achieve 20% ethanol blending in petrol by 2025
SATAT (Sustainable Alternative Towards Affordable Transportation) Boost production and use of Compressed Biogas (CBG) Establish 5,000 CBG plants and produce 15 MMT of CBG by 2025
PM JI-VAN Yojana Support commercial deployment of advanced biofuels using waste biomass Financial assistance for lignocellulosic and non-food feedstock projects
Ethanol Interest Subvention Scheme (EISS) Promote ethanol production from sugarcane, grains, and other sources Provide interest subvention on loans for ethanol production facilities
Biodiesel Blending Mandate (2019) Reduce dependence on fossil fuels by blending biodiesel with diesel Mandate 5% biodiesel blending with diesel
CBG Offtake Mandate Ensure market linkage for CBG through City Gas Distribution (CGD) networks Mandate CBG sale in CNG (Transport) and PNG (Domestic) segments

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