Sector profile

Bio-energy & CBG

Bio-energy turns crop residue, press mud, dung and municipal waste into compressed biogas (CBG), bio-coal and liquid fuels. With its sugar belt and farm residue, Uttar Pradesh is a natural location. This page covers the national blending trend and the state's bio-energy incentives.

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Concrete digester rings of a common biogas plant under construction in Maharashtra — Photo: MGB CEE via Wikimedia Commons, CC BY-SA 4.0

Importance to the Indian economy

India's ethanol blending in petrol rose from 12.1% in ethanol supply year (ESY) 2022-23 to 14.60% in 2023-24 and 19.20% in 2024-25 (Ministry of Petroleum & Natural Gas, via PIB). Bio-energy installed capacity (power) was 11.75 GW in March 2026 (MNRE).

The same feedstocks that make ethanol and CBG possible also create a rural supply chain for residue collection, which is why the UP policy supports balers and trolleys as well as the plants themselves.

The last three years in official data

Figures as published by the Government of India source linked against each year. We do not estimate or fill gaps.

Ethanol blending in petrol% blending, ethanol supply year (Nov–Oct)

ESY 2022-23

12.1%

ESY 2023-24

14.60%

ESY 2024-25

19.20%

Bars start at zero and are scaled to the largest value shown.

Year	Value (% blending, ethanol supply year (Nov–Oct))
ESY 2022-23	12.1%Source: PIB, 10 Jul 2026 (PRID 2283118)
ESY 2023-24	14.60%Source: PIB, 10 Jul 2026 (PRID 2283118)
ESY 2024-25	19.20%Source: PIB, 10 Jul 2026 (PRID 2283118)

A Lok Sabha reply of 4 Dec 2025 gives 19.24% for ESY 2024-25 (LS USQ 722); PIB rounds it to 19.20%.

What is not shown, and why: An official year-wise national series for CBG output was not verified, so ethanol blending is used as the indicator.

UP incentives for this sector

The Uttar Pradesh policy that applies to this sector, with the main incentives as stated in the policy or on Invest UP. Rates, caps and eligibility conditions are summarised; the policy text and its guidelines decide each case.

In force

Uttar Pradesh State Bio-Energy Policy 2022

Declared September 2022; validity not stated on the Invest UP page. Nodal agency: UPNEDA

Incentive	Support (as per the policy)
Compressed biogas (CBG)	₹75 lakh per tonne of capacity, up to ₹20 crore
Bio-coal	₹75,000 per tonne, up to ₹20 crore
Bio-diesel	₹3 lakh per KL, up to ₹20 crore
Residue equipment	30% of the cost of balers, rakers and trolleys, up to ₹20 lakh (on top of central support)
Land and duties	Government land at ₹1 per acre a year; 100% stamp and electricity duty exemption

Source: Invest UP policy page

Applicable across sectors. A manufacturing project of ₹50 crore or more can also be evaluated under the UP Industrial Investment & Employment Promotion Policy 2022 (valid to 3 Nov 2027), and an MSME unit under the UP MSME Promotion Policy 2022. As a rule only one state policy can be used for the same investment, so compare the sector policy with these general policies on your own numbers before applying. Central schemes can often be combined with state support: see subsidy stacking.

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Sources

Scheme terms change; verify on the official portal; last checked 4 Oct 2026. This page is general information for planning, not a guarantee of eligibility, sanction or disbursement. See our Terms of Use & Disclaimer.

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