India reports abundant bioresources and rapidly growing biofuel markets. Modern bioenergy from biomass, biogas and biofuels already supplies about 13 per cent of India’s total final energy. It is expanding fast, with the International Energy Agency (IEA) projecting bioenergy use to rise by roughly 45 per cent between 2023 and 2030.
This growth is driven by policy mandates, including ethanol and biodiesel blending targets, a 5–7 per cent biomass co-firing target in coal power plants by 2026, and compressed biogas (CBG) expansion under the SATAT initiative.
By one estimate, India’s liquid and gaseous biofuel use doubled from 2018 to 2024 (from 101 to 210 petajoules) due to ethanol and CBG programmes, and could more than double again by 2030 with stronger policy support. Modern solid biomass, such as wood pellets, bagasse, and agricultural residues, is expected to drive nearly 80 per cent of incremental bioenergy growth, particularly in heat and power generation. This positions bioenergy as a potential low-emissions fuel for high-temperature industrial processes.
At the same time, India’s heavy-metal sectors face steep energy demands. The aluminium industry is extremely energy-intensive, with primary production requiring roughly 13-15 MWh of electricity per tonne, alongside total energy consumption of about 200-210 GJ per tonne across refining and smelting.
An earlier study by the Council on Energy, Environment and Water (CEEW) suggests that aluminium contributes a significant share of industrial CO₂ emissions in India, underscoring the sector’s decarbonisation challenge. Energy costs alone account for over 40 per cent of aluminium production expenses.
In such industries, decarbonisation relies largely on clean electricity and process efficiency, but bioenergy can play a supporting role in providing heat and firm power. In alumina refineries and captive power plants, solid biomass or biogas can partially replace coal or natural gas. More broadly, in hard-to-abate sectors like aviation, shipping and industry, biofuels are increasingly viewed as viable low-carbon alternatives.
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Case studies from the aluminium industry
Several Indian aluminium producers have already begun integrating bioenergy. Hindalco’s alumina refinery at Belagavi operates a biomass-fired boiler supplying a third of its steam requirements. In FY2023-24, Hindalco co-fired roughly 100,000 tonnes of biomass in its captive power plants and continues to expand its renewable energy footprint.
Vedanta is upgrading calciner units to enable biomass co-firing and has secured over 1,300 MW of renewable power through long-term agreements as part of its decarbonisation roadmap. NALCO has set a target of achieving 40 per cent non-fossil power by 2030 and is exploring alternative fuels in refining operations.
These initiatives align with broader industry efforts under schemes such as Perform, Achieve and Trade (PAT), which have driven improvements in energy efficiency. Replacing coal boilers with biomass-based systems can deliver meaningful carbon reductions and, when combined with carbon capture technologies, could theoretically enable near carbon-neutral operations in specific processes.
On the policy side, the Ministry of New and Renewable Energy’s Bio-Energy Programme (2021–26) supports biomass pellet and briquette manufacturing and promotes cogeneration in industries. Waste-to-energy schemes are incentivising large biogas and CBG plants for industrial use. Under the SATAT initiative, oil marketing companies provide long-term offtake support for CBG, with a broader target of scaling production to 15 million tonnes per annum over time.
In parallel, biomass co-firing in thermal power plants has scaled up, reflecting early progress in supply chain development, though deployment remains uneven across regions.
Technical and economic feasibility
The key technical question is whether aluminium producers can feasibly substitute biomass for fossil fuels.
In alumina refineries, process steam is typically generated using coal or gas-fired boilers. Studies indicate that partial substitution with biomass is technically feasible. One analysis suggests that replacing a portion of refinery heat could require approximately 0.12 tonnes of biomass per tonne of aluminium produced, displacing a comparable share of coal.
At India’s current aluminium output of over 4 million tonnes, this implies biomass demand exceeding 3 million tonnes annually for partial substitution alone. Biomass pellets can be blended into boilers with minimal retrofits, while biogas and CBG can replace natural gas in thermal applications with relatively minor modifications.
Economically, biomass can be competitive. Delivered biomass, particularly agricultural residues processed within regional supply chains, is estimated at roughly USD 4–5 per gigajoule, often lower than natural gas and competitive with imported coal. This cost advantage strengthens its case for industrial heat applications.However, challenges remain. Biomass has lower energy density and higher moisture and ash content than coal, requiring pelletisation and controlled storage. Seasonal availability and fragmented supply chains can increase logistics costs. Large-scale adoption may also require modifications to boilers and fuel handling systems.
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Supply and sustainability
India’s biomass resources are substantial but constrained. The country generates hundreds of millions of tonnes of agricultural residues and organic waste annually, with current bioenergy consumption estimated at around 180 million tonnes of feedstock per year. Meeting projected 2030 demand would require this to increase to roughly 270 million tonnes.
Crop residues account for a significant share of this potential, alongside manure and organic waste streams. However, these resources are not fully surplus. They are already used in rural energy systems, livestock feeding, and industrial cogeneration, creating competition for feedstock.
Sustainability is also a key consideration. Biomass is only carbon-neutral when sourced from waste streams or sustainably managed resources. India’s policy framework increasingly emphasises structured supply chains, including biomass aggregation, pelletisation, and linkages between farmers and industrial users.
Challenges and limitations
Despite its potential, bioenergy cannot address all emissions in heavy industry. In aluminium production, around 80–85 per cent of emissions arise from electricity used in the Hall-Héroult smelting process. Bioenergy has a limited impact here unless converted into power, which is unlikely to match the scale of grid-based renewable electricity.
Heavy industries also require high-quality, continuous energy inputs, and retrofitting systems for biomass can take time. Supply chains for biomass and biogas, while expanding, remain relatively underdeveloped, with utilisation rates of existing assets still below optimal levels.
Bioenergy has a growing but clearly defined role in India’s heavy metal sector. In aluminium, biomass co-firing in captive power and its use in refinery boilers are technically feasible and already being deployed, offering near-term emissions reductions.
Government policies and market mechanisms are supporting this transition, but scaling remains the central challenge. Even partial substitution requires millions of tonnes of biomass annually, raising questions about availability, logistics and competing demand.
As a result, bioenergy is best viewed as a supplementary pathway. It can reduce emissions in specific segments such as refining and steam generation, but deeper decarbonisation of aluminium will depend primarily on clean electricity, storage and process innovation.
Image source: Envato (used for representational purpose only)
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