India’s vast agricultural and organic waste resources represent one of the country’s largest untapped energy opportunities. A decentralised biofuel ecosystem can simultaneously address waste management, decarbonisation and energy security while creating rural economic value.
The scale of the opportunity hiding in plain sight
Every year, India generates close to 750 million tonnes of biomass. Around 230 million tonnes of it is surplus agricultural residue with no productive use. Much of it is burned in open fields or left to decompose, releasing emissions and destroying value at the same time. Add to this the organic waste from our cities, the by-products of our food processing industries, and used cooking oil from millions of kitchens, and a picture emerges of a country sitting on one of the largest untapped energy reserves in the world.
We tend to think of energy reserves as something buried underground, discovered through exploration and extracted at great cost. India’s most accessible energy reserve is lying above the ground, in plain sight, being treated as a disposal problem. Waste-to-energy is not a fringe idea anymore. It is the most practical, most immediate answer to a question India has been asking itself for decades: how do we power our growth without depending on the rest of the world?
The third largest energy consumer, and a waste giant
India is the third-largest energy consumer in the world, behind only China and the United States. We are also among the world’s largest waste generators. Most countries have one of these problems. We have both, and that is precisely why the opportunity is uniquely ours.
A country that consumes enormous amounts of energy and produces enormous amounts of organic waste does not need to look far for its next fuel source. The feedstock is distributed across every district. The demand exists in every industrial cluster. What has been missing is the bridge between the two.
This is why I often say that biofuel is the best fit for India, and India is the best fit for biofuel. Europe built its biofuel industry on imported feedstock and policy-driven demand. India has the feedstock at home, growing back every harvest season, and an energy appetite that is only accelerating. Few countries in the world have this alignment of supply and demand within their own borders.
One solution, three problems
What makes biofuel unusual as a policy and business opportunity is that it does not solve one problem. It solves three problems simultaneously.
The first is waste. Every tonne of agricultural residue converted into fuel is a tonne that is not burned in the open, not sent to a landfill, and not left to emit methane. Waste management stops being a cost centre and becomes a value chain.
The second is sustainability. Biofuels displace fossil fuels directly, in sectors where solar panels and wind turbines cannot reach. Heavy transport, industrial boilers, thermal power, and process heat still run on coal, diesel, and furnace oil. Biofuels slot into these applications today, using existing engines and existing infrastructure, without waiting for a technological breakthrough.
The third is energy security. India imports the bulk of its crude oil, and the import bill crossed ten lakh crore rupees in a single year. Every unit of energy we produce from domestic waste is foreign exchange saved and strategic dependence reduced. In a world where energy has repeatedly become a geopolitical weapon, a fuel source that grows in our own fields is not just an environmental choice. It is a national security asset.
No other energy intervention available to India today addresses waste, sustainability, and security in one stroke. That is the case for treating biofuel not as a supplementary programme but as a central pillar of the country’s energy strategy.
Decentralised production, decentralised consumption
At Buyofuel, having built India’s first pan-India marketplace for biofuels and biomass, we have seen the industry from the inside for six years. Our conviction, formed transaction by transaction, is this: the future of biofuel in India is decentralised production feeding decentralised consumption.
Biomass does not travel well. It is bulky, seasonal, and low in energy density compared to coal or oil. The economics break down when feedstock is hauled across long distances to a handful of centralised mega-plants. What works is the opposite: thousands of processing units located close to where the waste is generated, supplying fuel to consumers located close to where it is processed.
This model mirrors how India’s waste is actually distributed—across millions of farms and thousands of towns, rather than concentrated in a few locations. It keeps logistics costs viable, keeps rural value addition in rural hands, and builds resilience into the supply chain. A decentralised network has no single point of failure.
The role of platforms and aggregators in this model is to provide what decentralisation otherwise lacks: price discovery, quality standards, trust between counterparties, and scale in the aggregate. That is the ecosystem India should be building, and it is the one we have committed ourselves to.
Mandates work: the co-firing proof point
If anyone doubts whether policy can move this market, the evidence is already in.
The Ministry of Power’s revised biomass policy mandates 5 per cent biomass co-firing in coal-based thermal power plants from FY 2024-25, rising to 7 per cent from FY 2025-26. The result has been the fastest demand creation this industry has ever seen. Thermal plants that had never bought a tonne of biomass are now signing long-term pellet contracts. The mandate also has teeth: regulators recently levied penalties of over sixty crore rupees on thermal plants near Delhi that missed their blending targets. Compliance has moved from aspiration to obligation.
The same logic is now being applied to gas. A mandatory compressed biogas blending obligation has begun at 1 per cent of CNG and PNG consumption, scaling to around 5 per cent by FY 2028-29.
These mandates prove a simple truth about the Indian market: demand follows regulation, and supply follows demand. But 5 or 7 per cent co-firing is a beginning, not a destination. India needs to go beyond, extending mandates across industrial fuel consumption, transport, and process heating, with clear escalation timelines that give investors the confidence to build capacity ahead of demand. Every percentage point of mandated adoption unlocks thousands of crores of private investment across the value chain.
The premium question: will India pay for sustainability?
Here is the honest challenge. In Europe and other mature markets, biofuels command a premium over coal and fossil alternatives because buyers there price in sustainability. India, by contrast, has always been a price-driven market. For most Indian buyers, green is welcome only when it is also cheap.
Biofuels should eventually earn a premium over coal in India too, reflecting their true value: lower emissions, domestic sourcing, and rural livelihoods embedded in every tonne. We are not there yet. But the trend is changing, and changing fast.
A new generation is moving into decision-making roles across the Indian industry. These are professionals who grew up with climate change as a lived reality, who answer to global customers with net-zero commitments, and who see sustainability as strategy rather than charity. Procurement conversations that were once only about landed cost now include carbon intensity and traceability.
The old ways are changing, for the good
The energy transition in India will not be won by imported ideas or imported fuels. It will be won by looking at what we already have in our fields, our cities, and our industries, and refusing to call it waste any longer.
The old ways are changing. Buyers are changing, policy is changing, and an industry that did not exist a decade ago is now supplying some of the largest companies in the country. The fuel India needs has been here all along. It is time we stopped throwing it away.
Author Bio
Kishan Karunakaran is a veteran of India's biofuel industry with nearly two decades of experience across the biofuel value chain, spanning production, feedstock sourcing, and distribution. He established Tamil Nadu's first biodiesel plant in 2008 and is the Founder and CEO of Buyofuel (buyofuel.com), India's first pan-India online marketplace connecting waste generators, biofuel manufacturers, and industrial fuel consumers. Under his leadership, Buyofuel has grown into a trusted supply partner for some of India's largest enterprises. Kishan writes and speaks on waste-to-energy, energy security, and the future of India's clean fuel transition.