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Legal Challenges in Biomass Energy Projects

By - King Stubb & Kasiva on September 4, 2023

Biomass energy is a renewable energy source obtained from organic resources such as agricultural waste, forest trash, and energy crops. Biomass energy is an important part of India’s energy mix and has the potential to contribute to sustainable development. Renewable energy sources, especially biomass, are extremely important. Biomass energy, as a clean and sustainable energy source, helps to minimize greenhouse gas emissions and reliance on fossil fuels. It also allows for rural development, employment creation, and energy security. In India, a regulatory framework is in place to ensure the smooth operation and development of biomass energy projects. Various components of biomass energy are governed by this framework, including rules, permits, licenses, and clearances.

Regulatory Landscape of Biomass Energy Projects

In India, several regulatory bodies and policies are relevant to renewable energy, including biomass energy projects. These bodies include:

  • Ministry of New and Renewable Energy (“MNRE”): MNRE is the nodal ministry responsible for formulating and implementing policies and programs for the development and promotion of renewable energy sources, including biomass.
  • Central Electricity Regulatory Commission (“CERC”): CERC is a statutory body responsible for regulating the generation, transmission, and distribution of electricity at the central level. It plays a crucial role in setting tariffs and regulations for renewable energy projects, including biomass.
  • State Electricity Regulatory Commissions (“SERCs”): SERCs are state-level regulatory bodies that regulate the electricity sector within their respective states. They play a significant role in determining tariffs, regulations, and policies for renewable energy projects, including biomass.

The National Biomass Policy is a fundamental policy towards biomass energy initiatives. The goal of this policy is to promote the sustainable use of biomass resources, encourage investment in biomass projects, and establish a favourable regulatory framework for the development of biomass energy. Certain regulatory conditions must be completed to build and run biomass energy projects in India. Obtaining essential permits, licenses, and clearances from relevant authorities is one of them. The particular needs may differ depending on the project’s location, scale, and nature.

There are several legal challenges towards Biomass Energy Projects. These include:

  1. Land Acquisition and Environmental Clearances: Securing land and gaining environmental permissions are significant obstacles in biomass energy projects in India. The process of procuring land for biomass projects can be challenging because it frequently entails negotiating with various parties, such as farmers, landowners, and government organizations. Environmental permissions are also required for biomass projects because they involve the use of natural resources and may have an influence on the environment. Obtaining these certifications can be time-consuming and difficult because they require compliance with a variety of environmental standards and norms. Forest clearing is one specific issue relating to environmental clearances. Biomass projects frequently necessitate the use of forest land, which can be a difficult subject due to worries about deforestation and biodiversity loss. Obtaining forest permission can be a time-consuming and complicated procedure involving several government agencies and stakeholders.
  2. Feedstock Procurement: Sustainable biomass feedstock procurement is a vital component of biomass energy projects in India. The legal elements of feedstock procurement include ensuring that biomass is procured from sustainable sources and that farmers’ and suppliers’ rights are maintained. Contracts with suppliers and farmers are critical for maintaining a consistent and long-term supply of biomass feedstock. These contracts should include, among other things, provisions for quality control, price, and delivery timetables.
  3. Financing and Investment: Attracting investments in biomass projects can be difficult due to a variety of constraints, such as high capital costs, a lack of financing choices, and regulatory uncertainty. To solve these issues, the Indian government has implemented several financial incentives and subsidies for renewable energy projects, including biomass. Capital subsidies, tax breaks, and low-interest loans are among the incentives available. However, financial issues continue to be a key impediment to the expansion of biomass energy projects in India. To attract greater investments, a stable legislative and regulatory framework that offers investors assurance and predictability is required.
  4. Grid Connectivity and Power Purchase Agreements (“PPAs”): Gaining grid access is a significant barrier for biomass energy installations. The country’s electrical infrastructure is frequently crowded, and capacity for connecting new renewable energy projects may be limited. Furthermore, PPAs are critical for biomass projects since they provide a market for the electricity generated. In PPAs, legal considerations include ensuring that the terms are fair and equitable for both the project developer and the off-taker.
  5. Intellectual Property and Technology: Intellectual property protection for biomass technology is critical for stimulating innovation and investment in the area. The legalities of technology transfer and collaboration are also critical for ensuring that technology is shared and used fairly and equally.

Case Studies

Several prominent biomass projects in India have faced legal issues with land acquisition, environmental permits, feedstock procurement, financing and investment, grid connectivity, intellectual property, and compliance. For instance:

  • The 10 MW biomass power facility in Punjab encountered difficulties with land acquisition and environmental approvals. Protests by local farmers who were dissatisfied with the compensation granted for their land caused the project to be delayed. Due to worries about the project’s impact on the neighboring forest, gaining environmental approvals was especially difficult.
  • Another case in point is the 8 MW biomass power plant in Maharashtra, which encountered difficulties with feedstock acquisition and funding. The project struggled to acquire a consistent and long-term supply of biomass feedstock, which hampered its profitability. Due to regulatory uncertainty and hefty capital expenditures, the project has had difficulty attracting investors.


In India, biomass energy projects encounter several legal obstacles pertaining to land acquisition, environmental approvals, feedstock procurement, financing and investment, grid connectivity, intellectual property, and compliance. Addressing these difficulties would necessitate a stable legislative and regulatory framework that provides clarity and predictability for investors and project developers. The future outlook for biomass energy projects in India is favourable, with the government establishing different regulations and incentives to boost renewable energy. By streamlining legal processes and fostering sustainable practices, biomass energy may play an important part in India’s energy mix and contribute to sustainable development.


What are the main hurdles for biomass energy projects in India's legal landscape?

Land acquisition complexities, environmental clearances, grid connectivity, and compliance with evolving regulations pose significant challenges for biomass projects in India.

How can biomass project developers address financing and investment barriers?

Developers can explore available financial incentives, subsidies, and tax benefits while structuring attractive power purchase agreements to attract investments in biomass energy projects.

What role does intellectual property play in biomass projects?

Intellectual property protection safeguards innovative biomass technologies. Collaboration agreements and proper technology transfer mechanisms ensure legal rights and promote innovation in the sector.

King Stubb & Kasiva,
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