Biomass Pellets, How to Start, How to Select Place, Equipment’s / Things / Staff / Material & Cost, License or Permit Required, Marketing Areas and Ideas, Packaging, Overall Investment, Profit, Risk
Biomass Pellets
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| Biomass Pellets |
Biomass
pellets are renewable fuel made from compressed organic waste such as sawdust,
rice husk, sugarcane bagasse, wheat straw, and other agro-residues. These small
cylindrical pellets (6mm–8mm) are eco-friendly alternatives to coal, offering
high calorific value, low ash content, and consistent burning efficiency.
Widely used in industrial boilers, commercial kitchens, biomass-based power
plants, and pellet stoves, biomass fuel pellets are in high demand. With rising
global energy needs, government incentives for green energy, and export
opportunities, starting a biomass pellet manufacturing business in India can be
highly profitable, sustainable, and future-ready.
How to Start
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| How to Start |
- Research local and
international demand for biomass fuel pellets.
- Arrange raw materials like
sawdust, rice husk, bagasse, and crop residues.
- Select a suitable location
near raw material sources.
- Purchase a biomass pellet
machine and supporting equipment.
- Hire skilled staff for
operations and packaging.
- Get licenses from the Pollution
Control Board and factory authorities.
- Begin small-scale pellet
production and ensure quality standards (ENplus A1, ISO 17225-2).
- Market to industries,
exporters, and renewable energy projects.
How to Select Place
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| How to Select Place |
- Choose areas close to
sawmills, agro-industries, or farms for easy biomass pellet raw material
supply.
- Prefer industrial zones or
rural areas with lower land costs.
- Ensure good road or rail
connectivity for bulk transportation.
- Availability of stable
electricity and water supply is essential.
- The site must comply with Pollution
Control Board guidelines and fire safety norms for biomass storage.
Equipment’s / Things / Staff / Material & Cost
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| Equipment’s / Things / Staff / Material & Cost |
- Pellet Mill (Ring Die / Flat
Die) – ₹5–15 lakhs.
- Crusher / Hammer Mill – ₹2–4
lakhs (for grinding raw material).
- Rotary or Flash Dryer – ₹3–8
lakhs (to maintain 10–12% moisture).
- Pellet Cooler & Screening
System ₹2–4 lakhs.
- Packaging Machine ₹1–2 lakhs
(for 20–25 kg bags or jumbo bags).
- Raw Materials ₹5,000–20,000
per ton (sawdust, rice husk, bagasse).
- Staff Requirement 5–10 workers
(machine operators, helpers, supervisor).
- Other Costs land/rent, power,
transport, and maintenance.
License or Permit Required
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| License or Permit Required |
- Company registration (Private
Ltd, Partnership, or LLP).
- Pollution Control Board clearance (mandatory).
- Factory license.
- Fire and safety certificate
for biomass storage.
- GST registration for trading
and export.
- If exporting, additional compliance with HS Code for biomass pellets.
Marketing Areas and Ideas
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| Marketing Areas and Ideas |
- Supply to industries using
boilers (paper mills, textile units, food processing plants).
- Sell to biomass-based power
plants under NTPC’s cofiring policy.
- Export to Europe, South Korea,
and Japan where wood pellets demand is very high.
- Sell in bulk bags (500–1000
kg) to wholesale buyers.
- Digital marketing via trade
portals, LinkedIn, and B2B platforms.
- Participate in renewable
energy expos and collaborate with boiler manufacturers.
Packaging (If Required)
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| Packaging |
- Loose bulk supply for large
industries.
- 20–25 kg laminated bags for
commercial kitchens, hotels, and households.
- Jumbo FIBCs (500–1000 kg) for
exporters and distributors.
- Packaging must ensure low
moisture and minimal pellet fines.
Overall Investment
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| Overall Investment |
- Small-scale plant: ₹25–40
lakhs (machinery, land, raw materials, working capital).
- Medium-scale unit: ₹50
lakhs–₹1.5 crore (higher capacity with automated pellet line).
Profit
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| Profit |
- Production cost per ton:
₹6,000–8,000.
- Selling price per ton:
₹10,000–12,000 in India (higher in export markets).
- Net profit margin: 25–35%.
- A small plant can earn ₹3–6
lakhs monthly profit with steady supply and contracts.
Risk
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| Risk |
- Fluctuations in biomass pellet
raw material price (sawdust, husk, bagasse).
- Seasonal unavailability of
crop residues.
- High initial investment in
pellet machines and dryers.
- Quality issues like high ash
or moisture can reduce demand.
- Dependence on local demand;
competition from briquettes.
- Strict compliance with Pollution
Control Board norms and fire safety.
More Profitable Business:-
Frequently Asked Questions (FAQ) on Biomass Pellets Business
1. Are biomass pellets profitable in India?
Yes, biomass pellets are considered a profitable business in India. With rising demand for renewable fuel in industries, commercial kitchens, and biomass-based power plants, the market is expanding rapidly. The production cost of biomass pellets usually ranges between ₹6,000–8,000 per ton, while the selling price is around ₹10,000–12,000 per ton. This allows entrepreneurs to maintain a profit margin of 25–35%, making the biomass pellet business financially rewarding.
2. What is the ideal size of biomass pellets?
The most commonly used pellet sizes are 6mm and 8mm. Pellets of 6mm are preferred for household heating, pellet stoves, and small boilers, while 8mm pellets are typically used in industrial boilers and biomass-based power plants. The size selection depends on the end-use requirement and the type of combustion system being used.
3. What raw materials are used for biomass pellet manufacturing?
Biomass pellets can be manufactured using a variety of agricultural and forestry residues. Common raw materials include sawdust, wood chips, rice husk, sugarcane bagasse, wheat straw, and mustard husk. These materials must be properly dried to maintain a moisture level of around 10–12% before being compressed into pellets, ensuring durability and high calorific value.
4. What is the calorific value of biomass pellets?
The calorific value of biomass pellets generally falls between 3,500–4,500 kcal/kg. This energy value varies depending on the raw material used for production. For example, wood pellets usually offer a higher calorific value compared to rice husk pellets. Since they produce lower ash content than coal, biomass pellets are considered a cleaner and more efficient energy source.
5. How much does a biomass pellet plant cost in India?
The cost of setting up a biomass pellet plant in India depends on the scale of operations and the type of machinery installed. A small-scale biomass pellet unit can be established with an investment of ₹25–40 lakhs, whereas a medium-scale plant with higher capacity and automation may require an investment of ₹50 lakhs to ₹1.5 crore. Factors such as pellet mill price, dryer selection, and packaging systems influence the overall cost.
6. What licenses are required for biomass pellet manufacturing?
To start a biomass pellet manufacturing business in India, several licenses and approvals are needed. Entrepreneurs must register their company as a Private Limited, Partnership, or LLP. A clearance from the Pollution Control Board is mandatory since biomass processing involves emissions and dust control. Additionally, a factory license, GST registration, and fire safety approval are essential. For export businesses, compliance with HS Code regulations and international quality certifications like ENplus A1 may also be required.
7. What is the difference between biomass briquettes and pellets?
Biomass briquettes and pellets differ mainly in size, density, and application. Briquettes are larger in size, usually 50–100mm, and are commonly used in large industrial furnaces. Biomass pellets, on the other hand, are smaller in diameter (6–8mm) and have higher density, making them suitable for pellet stoves, boilers, and export markets. Pellets also have better combustion efficiency and higher energy density compared to briquettes, which makes them more versatile for both domestic and industrial use.
8. Where can biomass pellets be sold in India?
Biomass pellets in India have a wide range of buyers, including industries that operate boilers such as textile mills, paper plants, and food processing units. They are also supplied to NTPC and other biomass cofiring projects, where coal is replaced with renewable fuel. Export opportunities are significant, with Europe, Japan, and South Korea being major markets. Additionally, biomass pellets are sold to commercial kitchens, hotels, and renewable power plants, making the marketing scope very broad.
9. What is the GST rate on biomass pellets in India?
The current GST rate on biomass pellets in India is 5%. This relatively low tax rate helps in keeping biomass pellets affordable for industries and households, making them a cost-effective alternative to coal and fossil fuels. The GST benefit also encourages more companies to adopt biomass fuel, boosting overall demand in the market.
10. Can biomass pellets be exported from India?
Yes, biomass pellets can be exported from India, and the export potential is increasing every year. Countries in Europe, Japan, and South Korea have a high demand for certified wood pellets and agro-residue pellets. Exporters must comply with international quality standards such as ENplus A1 certification and proper packaging requirements, including 20–25 kg bags or jumbo bags for bulk supply. With growing interest in renewable energy worldwide, Indian biomass pellet exporters are seeing excellent business opportunities.
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