India is focusing on bioenergy to decarbonise industrial heat, crucial for MSMEs.
The country faces challenges in securing reliable biomass supply chains.
The government is exploring policy measures to enhance biomass availability and technology development.
As India pushes to decarbonise industrial heat — one of the hardest-to-abate segments of its energy system — biomass-based energy is emerging as a strategic option. But policymakers and industry experts cautioned that the success of bioenergy hinges less on technology and more on the reliability of raw material supply chains.
Bioenergy currently contributes around 12 gigawatts (GW) to India’s renewable energy capacity — far smaller than solar and wind — but its impact is disproportionately large due to its geographic spread and feedstock diversity, officials said on January 16, 2026 at a recent conference on adoption of biomass for green steam and heat applications in MSMEs conducted jointly by the Union Minsitry of New and Renewable Energy (MNRE) and GIZ, a German international coordination enterprise working on sustainable development, among other issues.
Unlike solar and wind, where nearly 75–85 per cent of capacity is concentrated in just five states, biomass applications can be deployed across the country using agricultural residue, municipal solid waste (MSW) and animal waste.
This makes bioenergy particularly relevant for industrial heat and steam, which accounts for a significant share of energy use in MSME-heavy sectors such as textiles, food processing, foundries, chemicals and pharmaceuticals. MSMEs contribute nearly one-third of India’s manufacturing output, but remain heavily dependent on coal, furnace oil and petcoke for thermal energy, locking in emissions and exposure to volatile fuel prices.
However, MNRE Secretary Santosh Sarangi acknowledged that raw material availability remains the weakest link. Biomass supply chains in India are fragmented, seasonal and poorly integrated, raising concerns about year-round fuel availability. “Biomass as a raw material is not yet backed by a fully established supply chain. Until that matures, availability across the year will remain a question mark,” he said, underscoring the need for institutional mechanisms to aggregate and transport feedstock efficiently.
To address this, the government is exploring policy instruments such as biomass development obligations, digital biomass aggregation platforms, standardised green steam supply contracts and stronger coordination with farmer producer organisations. The National Bioenergy Programme, along with initiatives like SATAT and GOBARdhan, aims to convert surplus crop residue and waste — often burned in fields or dumped in landfills — into a reliable industrial fuel while creating rural income streams.
Technology gaps also persist. Sarangi highlighted the need for R&D in multi-fuel boiler technologies that can operate efficiently across varying biomass types and scales, particularly for MSMEs. India is seeking international collaboration, including with Germany, to adapt proven boiler designs for domestic conditions, while MNRE scientists are expected to scale up research tailored to small and medium industries.
Despite these challenges, policymakers see bioenergy as uniquely positioned to deliver multiple co-benefits — from emissions reduction and energy security to rural livelihoods and waste management. “When MSMEs replace coal with biomass, emissions and energy costs fall. When farmers supply crop residue, incomes rise and stubble burning reduces,” he said, calling bioenergy a “systems solution” rather than a niche renewable option.
As India accelerates its industrial decarbonisation agenda, the ability to secure, standardise and scale biomass feedstocks may determine whether bioenergy can move from the margins to the mainstream of the clean energy transition.