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MoP Makes Biomass and MSW Co-Firing Mandatory in Coal Power Plants to Cut Emissions and Boost Waste Management

The Union Ministry of Power (MoP) has released a new Comprehensive Policy that mandates the use of biomass and torrefied charcoal derived from municipal solid waste (MSW) in coal-based thermal power plants. This framework replaces earlier guidelines issued in 2021 and 2023 and formally brings MSW-based torrefied charcoal under the national co-firing mandate.

Approved by the Minister of Power and Housing & Urban Affairs, the updated policy has been shared with state power departments, the Central Electricity Authority (CEA), central generating stations, and independent power producers.

According to the policy’s annexure, India produces nearly 750 million tonnes of biomass annually, including around 230 million tonnes of surplus agricultural residue. Urban areas generate approximately 1.5 lakh tonnes of MSW every day, with nearly 14 million tonnes per year remaining untreated. The ministry noted that co-firing this surplus biomass and unprocessed waste with coal can significantly reduce greenhouse gas emissions, curb stubble burning, strengthen the biomass pellet supply chain, and advance the goals of the Swachh Bharat Mission.

Blending Requirements

Beginning FY 2025–26:

• NCR-based coal plants must use:
o 5% biomass pellets, and
o An additional 2% blend of biomass pellets and torrefied MSW charcoal annually.

• Plants outside NCR must co-fire a 5% blend of biomass pellets and/or torrefied MSW charcoal.

• Pellet types may range from non-torrefied to semi-torrefied or fully torrefied, depending on plant design.

• NCR plants must ensure at least 50% of pellet raw material is sourced from paddy straw and crop residue from the NCR and nearby districts.

Exemptions and Oversight

Plants seeking exemptions can apply for case-by-case review by a committee led by the CEA’s Chief Engineer (TE&TD), with members from the Commission for Air Quality Management, NTPC, BHEL, CPRI, the Ministry of Agriculture, and the SAMARTH Mission.

Tariff and Regulatory Treatment

The policy also outlines tariff mechanisms:

• Plants regulated under Section 62 of the Electricity Act can include additional biomass fuel costs as a pass-through in their Energy Charge Rate (ECR).

• Projects operating under Section 63 may recover higher fuel costs under Change in Law provisions, including cases where fuel cost pass-through already exists in the PPA.

• Any rise in ECR due to biomass co-firing will not be considered while determining Merit Order Despatch.

• DISCOMs may count power from biomass and MSW co-firing towards their Renewable Consumption Obligations (RCOs).

The MoP also confirmed that the existing Model Contract for biomass procurement remains valid, with room for amendments if required. Regional benchmark prices for biomass pellets may continue to be announced to support growth in pellet manufacturing across the country.