Why India's Biomass Supply Chain Still Struggles to Keep Up

India's biomass sector has no shortage of raw material. What it lacks is a dependable way to move that material from farm to furnace. The result is a demand-supply mismatch that shows up every time a power plant or factory tries to place a large, steady order.

A Demand Gap Hiding in Plain Sight

Under the current co-firing mandate, thermal power plants alone need close to 100,000 tonnes of biomass a day. Actual daily supply reaching plants has been estimated at only 5,000–7,000 tonnes — a shortfall of over 90%. Separately, industry estimates for briquette demand put daily requirement near 95,000 tonnes against manufacturing capacity of roughly 7,000 tonnes a day. Whichever figure you use, the pattern is the same: buyers are ready, but organised supply isn't catching up fast enough.

An Industry Still Finding Its Structure

Much of this gap traces back to how fragmented the supplier base is. Analysts have noted the biomass manufacturing sector needs to grow from around 1,000 active players today to well over 10,000 to meet mandated targets at scale. Most units are small, regionally scattered, and run without the kind of standardisation that bulk industrial buyers expect.

Transport reflects the same informality. Biomass largely moves on tractors, carts, and general-purpose trucks rather than dedicated logistics networks, and aggregating even 100,000 tonnes of biomass has been estimated to require close to $3 million in supporting capital. Farmers, meanwhile, are often engaged as one-off vendors rather than long-term supply partners, which does little to build the trust needed for consistent, contracted volumes.

Storage and the Price Swings That Follow

Unlike coal, biomass is sensitive to moisture and degrades quickly when stored in the open — yet most storage along the supply chain is exactly that: open-air, with limited warehousing at collection points. Research on paddy straw logistics found storage alone can account for 20–30% of total delivered cost, while cutting and baling residue makes up roughly half the cost of getting it to a collection point in the first place.

Seasonal harvest cycles compound the problem. Because supply is concentrated in narrow windows and storage infrastructure is limited, prices can swing sharply — mustard husk prices, for instance, rose nearly fourfold during 2022 as availability tightened. Power plants and industrial users, who typically sell output at fixed or contracted rates, have few tools to hedge against this kind of input volatility.

Early Signs of Correction

Policymakers have started responding. In late 2024, the Ministry of Power introduced price benchmarks for biomass pellets supplied in the Delhi-NCR region — separate rates for torrefied and non-torrefied pellets, tied to calorific value — specifically to bring more pricing stability and encourage supply-side investment. It's a narrow fix so far, but it signals recognition that an unpredictable market discourages the very capacity expansion the sector needs.

Frequently Asked Questions

Q: Why is India's biomass supply chain considered unorganised?

A: Most collection, aggregation, and transport is still handled by small, independent operators using generalpurpose vehicles rather than dedicated biomass logistics networks, with limited standardisation across suppliers.

Q: Why do biomass prices fluctuate so much?

A: Supply is seasonal and tied to harvest windows, storage infrastructure is limited, and biomass degrades faster than coal if not stored properly — all of which push prices up sharply when availability tightens.

How Kamlesh BioVerse Can Help?

A reliable biomass supply depends on partners who treat sourcing, storage, and delivery as a disciplined process, not an afterthought. Kamlesh BioVerse works to give industrial buyers steadier access to quality briquettes, pellets, charcoal cubes, and biochar — helping cushion the very supply and pricing gaps this piece describes. Based in Udaipur, Kamlesh BioVerse (KBV) supplies briquettes, pellets, charcoal cubes, and biochar to industries across Rajasthan and beyond.

To discuss your requirements, reach us at +91 8824446431 or admin@kamleshbioverse.com.