Bhopal: Madhya Pradesh has announced a new policy framework to boost the production and use of compressed biogas (CBG) and advanced biofuels, with a plan to set up at least one plant in every development block across the state. Launched under the Madhya Pradesh Renewable Energy Policy 2025, the initiative aims to reduce agricultural waste, generate rural employment, and attract private investment into the clean energy sector.
The policy focuses on advanced biofuels such as CBG, biodiesel, and bio-coal, while explicitly excluding first-generation ethanol. A key feature of the plan is the Basic Investment Promotion Assistance (BIPA) scheme, under which biofuel projects will be eligible for capital subsidies of up to ₹200 crore, disbursed over seven years. In addition, the government has allocated ₹5 crore for infrastructure development and up to ₹10 crore in support for units that implement zero liquid discharge systems.
To ensure structured expansion, each development block will be allowed only one biofuel plant. Investors will be selected by a district-level committee chaired by the collector. In an effort to ease land acquisition, the government has offered to provide revenue land at 50% of the circle rate, and lease forest or agricultural land for biomass use at just 10% of the annual guideline rate. For a 10 TPD CBG unit, the minimum land requirement is 10 acres, with lease terms set at 30 years and renewable by mutual agreement.
The policy also offers extended fiscal incentives, including a ten-year waiver on electricity duty and the energy development cess. Biofuel units purchasing private land can claim a 50% rebate on stamp duty. Projects that supply power to third parties may also be eligible for waivers on cross-subsidy and additional surcharges, pending regulatory clearance.
With this move, Madhya Pradesh is positioning itself as an emerging hub for bioenergy in India, combining climate-conscious planning with rural economic development. The state hopes the policy will lay the groundwork for a cleaner, more sustainable fuel ecosystem, while supporting industrial growth across its districts.
BI Bureau
