MNRE Biomass Subsidy for Pellets Has Become Easier

In a major boost to the biomass energy sector, the Ministry of New and Renewable Energy (MNRE) has significantly simplified the subsidy application process for biomass briquette and pellet manufacturing units. If you’ve previously struggled to claim your subsidy or were discouraged by complex documentation, this is your moment to reconsider.

With the revised guidelines issued on June 27, 2025, MNRE has introduced major reforms, streamlining the process of claiming Central Financial Assistance (CFA). If you're preparing a Project Report for a Bank Loan, PMEGP Project Report, or CMEGP Project Report, this information will be crucial for integrating realistic subsidy figures into your application.

1. Updated Subsidy Rates for Biomass Pellets

Non-torified biomass pellets now qualify for ₹21 lakh/TPH up to 5 TPH, capped at ₹1.05 crore (or 30% of machinery cost). For torrefied pellets, the subsidy is ₹42 lakh/TPH up to a maximum of ₹2.10 crore. This allows businesses to reflect credible subsidies in their Detailed Project Report for a Bank Loan.

Relevant for: Project Report for Bank Loan, Feasibility Project Report

2. IP Approval Made Simpler

You must now file your Initial Project (IP) application through the Bio Urja Portal before beginning production. After IP approval, site inspection by nodal agencies like IREDA will occur.

No more technical delays—this aligns perfectly with preparing a Feasibility Project Report or Mudra Loan Project Report.

Helpful for: Mudra Loan Project Report

3. Techno-Economic Report No Longer Mandatory

Previously, banks were required to sign techno-economic reports, which often caused delays. This requirement has now been eliminated, making it much easier to proceed with your Project Report for Loan or CMEGP Project Report.

See: CMEGP Project Report

4. EIA Reports and Site Photos Removed

You no longer need high-resolution site images or Environmental Impact Assessment (EIA) reports. This is a game-changer for anyone preparing a Detailed Project Report under MNRE guidelines.

Tip: Use this update in the Project Report for the National Livestock Mission too.

5. Flexible Sales Agreement Terms

A 2-year sales agreement is no longer mandatory. You can now submit any type of off-take agreement with future buyers. This simplifies your PMEGP Project Report documentation.

Related: PMEGP Loan Project Report Guide

6. IoT Monitoring Allowed (No SCADA Needed)

You can now use any IoT-based production monitoring system. Alternatively, you can provide quarterly production updates. This is easier and more affordable for small manufacturers.

Tip: Include this in your Detailed Project Report

7. Reduced Operation Time

To calculate performance, your plant now only needs to operate 10 hours per day (down from 16). This reduces overhead and energy costs, making your Project Report for Bank Loan more viable.

Boost your financials with: Income Tax Return Filing.

8. Clear Performance Benchmarks

Achieve 80% of rated capacity for 100% subsidy. Get proportional benefits if production is between 50-80%. No subsidy if below 50%.

Add these metrics to your Pitch Deck.

9. Subsidy Only for Pellet Units

Only pellet manufacturing units are eligible for MNRE subsidy, not briquette-pellet combination setups. Submit a 1-minute video with a geo-identifier to prove operational status.

Plan your Udyam Registration accordingly.y

10. One Subsidy Source Only (CPCB or MNRE)

You can only claim a subsidy once, either from MNRE or CPCB, not both. An undertaking must be filed confirming your claim source.

Use this clarification in: Startup India Registration, Invest Global in Madhya Pradesh.

Conclusion

These revised MNRE subsidy guidelines are a huge opportunity for investors in the biomass sector. From flexible agreements to simplified benchmarks, the updated norms reduce red tape and speed up your claim process.

Make sure your Project Report for Bank Loan, Feasibility Project Report, PMEGP Project Report, and CMEGP Project Report reflect these latest updates. This not only boosts your approval chances but also ensures compliance with government standards.

Visit Sharda Associates to get your reports professionally prepared and your projects subsidy-ready today. For additional information or assistance, please contact us at +91-8989977769.