India’s biomass market is steadily emerging as a key pillar of the country’s renewable energy transition, combining clean power generation with waste management and rural economic development. Valued at US$ 2.5 billion in 2024, the India biomass market is projected to expand at a CAGR of 5.2% from 2025 to 2035, reaching an estimated US$ 4.3 billion by the end of 2035. This growth trajectory reflects strong policy backing, abundant agricultural residues, and rising demand for sustainable energy alternatives across industries and households.

Biomass: A Strategic Renewable Energy Resource for India

Biomass energy refers to the production of heat, electricity, and fuels from organic materials such as agricultural residues, forestry waste, animal waste, and dedicated energy crops. In India, biomass plays a uniquely strategic role due to the country’s large agrarian base and growing need for decentralized, low-carbon energy solutions.

Through technologies such as combustion, gasification, and anaerobic digestion, biomass feedstock is converted into electricity, industrial steam, biogas, bio-CNG, and pellets. These energy forms are widely used for power generation, rural cooking and heating, industrial boilers, and transportation fuel blending. Beyond energy, biomass solutions support waste-to-energy initiatives, reduce open-field stubble burning, and generate additional income streams for farmers—aligning well with India’s circular economy goals.

Policy Support Accelerating Biomass Adoption

Government policies and incentives remain a major driver of India’s biomass market growth. The Ministry of New and Renewable Energy (MNRE) has introduced multiple programs promoting biomass-based power, cogeneration, bio-CNG production, and pellet manufacturing. Initiatives such as SATAT (Sustainable Alternative Towards Affordable Transportation) and the National Bio-Energy Mission have created a structured framework to attract private investment and accelerate project development.

Financial incentives, including capital subsidies, viability gap funding, and concessional financing, are lowering entry barriers for developers and technology providers. These measures are encouraging public-private partnerships and fostering innovation across the biomass value chain, from feedstock aggregation to advanced conversion technologies.

Abundant Agricultural Residues Fueling Market Expansion

India generates millions of tonnes of agricultural residues annually from crops such as rice, wheat, sugarcane, maize, and cotton. Traditionally, much of this residue has been burned in open fields, contributing to air pollution and health hazards. Biomass energy offers a productive alternative by converting this waste into electricity, pellets, and bio-CNG.

This transition not only mitigates environmental damage but also strengthens rural supply chains. Farmers can monetize crop residues by selling them to aggregators or biomass project developers, creating supplementary income and reducing dependence on conventional farming revenues. Decentralized biomass initiatives—such as village-level pelletization units, digesters, and microgrids—are further enhancing rural energy access and supporting small and medium enterprises.

Electricity Generation Leading Biomass Applications

Among various applications, electricity generation dominates the India biomass market, driven largely by bagasse-based cogeneration in sugar mills and biomass power plants supplying grid electricity. Renewable Purchase Obligations (RPOs), feed-in tariffs, and MNRE support schemes provide strong incentives for biomass-based power generation.

This segment benefits from reliable feedstock availability, scalable capacity addition, and the dual advantage of waste utilization and clean energy production. As India’s power demand continues to rise, biomass-based electricity is expected to remain a stable and widely adopted application.

Market Developments and the Road Ahead

Recent developments highlight growing industry momentum. In 2024, Adani Group’s Barsana agri-waste-to-bio-CNG project commenced phase-one operations, marking a major milestone in converting crop residues into gaseous fuels for transportation and industry. Similarly, large renewable energy players are exploring biomass conversion and biorefinery technologies to integrate biofuels into broader green molecule strategies.

Looking ahead, the pace of India’s biomass market growth will depend on continued supply-chain integration, improved logistics, and adoption of efficient conversion technologies. With strong policy support and increasing recognition of biomass as a clean, inclusive energy solution, the market is well-positioned to play a vital role in India’s sustainable energy future through 2035.