Harnessing Wealth from Waste: India’s Programme on Energy from Urban, Industrial, and Agricultural Wastes and Residues

Policy Update
Rounak Panda

Background

India’s development trajectory—urbanization, industrialization, and agricultural intensification—has unintentionally sired a parallel crisis of waste creation. Municipal authorities struggle with over 65 million tonnes of municipal solid waste (MSW) annually, whereas agricultural residue is over 500 million tonnes. Compounding this is the generation of high-COD effluents by agro-industries such as distilleries, dairies, and food processors, which are not properly exploited for energy recovery. This waste burden, if not checked, threatens environmental sustainability, public health, and land use efficiency.

Realizing the magnitude of the issue as well as the potential for energy recovery, the Ministry of New and Renewable Energy (MNRE) initiated the “Programme on Energy from Urban, Industrial, and Agricultural Wastes and Residues” under Phase-I of the National Bioenergy Programme (2021–2026). This initiative is more than just waste management; it implies a mindful transition towards a circular economy by leveraging the practice of waste converted into renewable energy sources, minimizing greenhouse gas (GHG) emissions, and encouraging decentralized clean energy systems.

Programme Aims and Policy Background

The program falls in line with India’s broader sustainability goals, including the Swachh Bharat Mission and Nationally Determined Contributions under the Paris Agreement. The program’s purpose is to convert waste burdens into energy assets, thus presenting a convergence point for environmental, economic, and social policy objectives.

Some of its major goals are the development of bio-CNG, biogas, and thermal energy from various waste streams, extending Central Financial Assistance (CFA) to support private sector investment, and ensuring R&D and indigenous technology development in line with Indian conditions. It is also very interoperable with other programs such as GOBARdhan (organic manure and biogas from cattle dung), SATAT (Bio-CNG offtake), and SBM 2.0 (urban waste management).

Technical Architecture and Programme Design

The programme has a well-established multi-actor, multi-technology framework. It applies a “feedstock-technology matching” strategy, where waste typologies determine the optimum conversion technology. The technologies are filtered for Technology Readiness Level (TRL 6+), and performance benchmarks must be met for consideration under government support.

Table 1: Feedstock-Technology-Energy Output Mapping

This framework ensures operational efficiency and sustainability, enabling site-level customization. The alignment between feedstock and technology minimizes underutilization and system failure—a common issue in earlier WtE projects.

Institutional Framework
The programme follows a decentralized implementation model: Urban Local Bodies (ULBs) are the nodal agencies for MSW-based projects; State Nodal Agencies (SNAs) ensure facilitation of land, permission, and grid connectivity; Farmer Producer Organizations (FPOs) and cooperatives are the drivers for farm waste projects. Public–private partnerships (PPPs) and tipping-fee-based business models are promoted.

4.  Financial Architecture and Incentives

One of the most critical enablers of WtE success is financial viability. To this end, MNRE has designed a layered incentive structure.

Table 2: Central Financial Assistance under the Programme

While CFA offers upfront support, project viability still hinges on revenue from tipping fees, energy sales, and—crucially—long-term offtake agreements for Bio-CNG and power.

5. Performance (2021-25)

The program has made considerable progress in grid-connected as well as off-grid capacity. Its alignment with GOBARdhan and SBM has improved coordination and scaling.

Table 3: Key Performance Indicators

Case studies like the Indore Bio-CNG Plant demonstrate real-world impact. The plant processes 550 TPD of segregated MSW to generate 17 TPD Bio-CNG, which powers over 300 city buses and displaces 50,000 tonnes of CO₂ annually.

Environmental, Economic, and Social Impact

Environmental Benefits 

The program contributes significantly to diversion from landfills, air pollution reduction, and climate change. Biogas and bio-CNG technologies capture methane from decomposing waste and prevent open-burning of crop residues, particularly in NCR states that are known to be pollution hotspots.

Economic Multipliers

WtE plants have twin income streams from the sale of energy and tipping charges. Further, the new enterprise of organic fertilizer from Fermented Organic Manure (FOM) from digestate forms an additional layer of income. Job creation is also an additional benefit, with 8–10 direct jobs per tonne per day of WtE capacity.

Societal and Rural Implications

Rural Bio-CNG and biogas units give clean cooking fuel, eliminating drudgery and indoor air pollution for women. SHG-operated community plants increase incomes and provide local ownership. WtE integration with MGNREGS in a few states gives a livelihood-security pillar.

Challenges and Technical Bottlenecks

Despite its achievements, the programme faces several operational and systemic issues:

• Feedstock Inconsistency: Seasonality and poor segregation remain major hurdles. Unsegregated MSW lowers conversion efficiency and raises O&M costs.
• Capital Intensity: High upfront costs and uncertain offtake agreements deter private investment.
• Technology Mismatch: Imported tech not designed for Indian waste streams often underperforms.
• Public Resistance: Concerns around pollution and “Not in My Backyard” attitudes affect project siting.
• Regulatory Friction: Delays in power evacuation, PPA approvals, and grid integration slow progress.

These issues can be addressed. The solutions are to strengthen IEC campaigns, enforce source segregation, and provide public-sector R&D for indigenously developing technology.

Strategic Recommendation and Way Forward 

To transition from a program to a national waste-to-wealth movement, there needs to be a systems-level transformation.

Promote Policy Convergence:

MNRE, MoHUA, Ministry of Petroleum and Natural Gas, and Department of Fertilizers policies need to align WtE with urban waste management, transport decarbonization, and fertilizer subsidies.

Simplify financial arrangements:

Create Bio-Energy Investment Trusts (BEITs) and float Green Municipal Bonds. Modify Viability Gap Funding (VGF) to cover small and medium-sized projects. Carbon credit markets can also be used to enhance financial returns.

Speed Up R&D and Domestic Innovation

Facilitate enzyme-catalysed digestion, co-digestion guidelines, and thermal process efficiency under “Make in India.” Collaborate with IITs, CSIR, and foreign labs to drive innovation to TRL 9 deployment.

Enhance Data Systems

Use AI and IoT for plant diagnostics, emission monitoring, and predictive maintenance. Develop platforms such as SBM Dashboard and Unified GOBARdhan Portal to offer real-time public access to performance data.

Conclusion: Facilitating a Circular and Resilient India

India’s effort to tap energy from urban, industrial, and farm residues and wastes is not merely a technological or financial initiative . It is a structural response to the interrelated issues of energy insecurity, waste management, and rural-urban development imbalance. In the ability to harness institutional coordination, engineering ingenuity, and citizen participation, this effort reflects the philosophy of sustainable development.

But the journey ahead needs unyielding innovation, responsibility, and responsiveness. The mission is clear: to redefine waste from a burden to a pillar of India’s sustainable energy future. If executed in full with equity and strategic foresight, this project can become the foundation of India’s circular economy and a model for the Global South.

References 

1. Ministry of New and Renewable Energy. (2023). Annual report 2022–23. Government of India.
2. Ministry of New and Renewable Energy. (2022). National Bioenergy Programme – Phase I guidelines (2021–2026). Government of India.
3. Ministry of Jal Shakti. (2024). Unified GOBARdhan portal: Data summary reports. Government of India.
4. Ministry of Housing and Urban Affairs. (2024). Swachh Bharat Mission – Urban (SBM-U 2.0): Annual updates and dashboard data. Government of India.
5. Press Information Bureau. (2023–2025). Press releases on GOBARdhan, SATAT, and waste-to-energy projects. Government of India.
6. Ministry of New and Renewable Energy. (2024). Physical progress report: Cumulative installed capacity (April 2024). Government of India.
7. Ministry of Finance. (2023). Economic survey of India 2022–23. Government of India.
8. Ministry of Power. (2024). Annual report 2023–24. Government of India.
9. Department of Fertilizers. (2022). Fertilizer Control Order (FCO) amendments: Fermented organic manure recognition. Government of India.
10. Comptroller and Auditor General of India. (2015). Performance audit report No. 34 of 2015: Renewable energy sector. Government of India.
11. The Energy and Resources Institute. (2021). Policy brief: Waste-to-energy in India – potential, policy, and challenges. TERI.
12. Ministry of Statistics and Programme Implementation. (2024). Renewable energy statistics 2023–24. Government of India.
13. Ministry of Petroleum and Natural Gas. (2023). SATAT scheme guidelines and implementation updates. Government of India.
14. Department of Drinking Water and Sanitation. (2023). GOBARdhan scheme operational manual (2023 edition). Ministry of Jal Shakti, Government of India.
15. Ministry of Housing and Urban Affairs. (2023). SBM 2.0: Annual progress report. Government of India.

About the Contributor: Rounak Panda, Research Intern, IMPRI.  Currently pursuing B.Sc (Hons) Economics at Dr. B R Ambedkar School of Economics – University, Bengaluru.

Acknowledgement: The author extends his sincere gratitude to the IMPRI team and Ms. Aasthaba Jadeja for her invaluable guidance throughout the process.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.

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