Pankaj Mohindroo
India’s rise as a global economic powerhouse is celebrated for its growth and ambition, yet a silent structural weakness quietly undermines our sovereignty: crippling dependence on imported fossil fuels.
India’s fossil fuel imports represent a massive macroeconomic drain, funneling national wealth straight into foreign coffers. In FY 2024-25, Crude Oil, LPG and LNG import value exceeds 165 billion dollars; crude oil imports of 244 million tonnes costed over 137 billion dollars at 88 percent dependence, while LPG imports of 20.67 million tonnes added 13 billion dollars, further LNG imports got billed at 15 billion dollars, acting as a recurring haemorrhage that weakens forex reserves, pressures the rupee, inflates household and industrial costs, and starves fiscal space.
Every external geopolitical tremor trigger convulsion, temporary fixes, then reset waiting for next shock. This dependence mocks Aatmanirbhar Bharat. The ultimate paradox? India is not starved of energy resources it is simply squandering the vast domestic wealth lying untapped at its disposal.
Biomass-based Energy: India’s untapped arsenal for energy self-reliance
India generates more than 750 million metric tonnes of agricultural biomass annually, with a surplus exceeding 230 million metric tonnes readily available for energy use. At a conservative 14 megajoules per kilogram average calorific value, these surplus harbours 3.22 exajoules, equivalent to nearly 77 million tonnes of oil, or 31 per cent of India’s annual crude oil imports in energy terms. Harnessing it can slash import dependence, save tens of billions in foreign exchange, eliminate stubble burning, and generate large-scale rural employment in the biomass fuel sector.
The difference lies in the origin of supply. Crude oil, LPG, and LNG are predominantly imported from countries such as Saudi Arabia, Qatar, and the UAE, with supply chains exposed to geopolitical risks. In contrast, compressed biogas, ethanol, and biomass pellets are derived from agricultural residue generated perennially within India’s farms. This makes bioenergy inherently domestic, stable, and insulated from global volatility, ensuring a predictable and secure energy supply once scaled.
Bioenergy revolution slashes India’s fossil dependence
India has viable, technologically mature and commercially deployable substitutes for major fossil fuels. Biodiesel from used cooking oil and non-edible oilseeds displaces diesel, while ethanol blending has achieved E20 with second-generation ethanol from residue gaining traction, requiring policy boost for flex-fuel vehicles like Brazil’s model. Compressed biogas replaces LPG and natural gas with high methane purity and biofertiliser byproduct. Biomass pellets counter coal via co-firing in industrial boilers and thermal power plants.
Despite this progress, current strategy barely packs a punch. For instance, as on date, under the SATAT initiative, more than 1000 projects have received approvals, but only about 100 compressed biogas plants are operational, far short of the target of 5000 plants with an annual production capacity of 15 million metric tonnes by 2023-24. This gap highlights that the constraint is not technology, but lack of assured market offtake.
Biomass pellets: India’s most affordable, scalable and sustainable energy alternative
Among all biomass-based solutions, biomass pellets stand out as the most immediate and cost- effective opportunity. Produced from agricultural residue, these pellets can directly replace LPG and other fossil fuels in commercial cooking and several small industrial heating applications. Their advantage becomes clear when comparing cost and emissions across fuels.
Biomass pellets clearly emerge as the most affordable option, delivering heat at just 2 to 3 rupees per kilowatt hour around 60% cost savings over LPG, PNG or CNG while maintaining among the lowest net emissions across all fuel types. Ease of storage, logistics and distribution of pellets provide a ready package for market expansion and scale-up in comparison to higher logistics and infrastructure requirements to procure from the CBG and Ethanol plants built at distributed decentralised locations across the nation.
This combination of low cost, low emissions, and domestic availability makes positions them as a highly practical and scalable replacement for fossil fuels especially across industrial and commercial segments.
India’s energy reckoning: Seize biomass or bleed on
Incrementalism will not break the fossil trap. India needs a decisive national strategy: enforce greater binding mandates for biomass pellets, CBG and ethanol, fast-track approvals, guarantee off take and unleash capital incentives for mass industrial and commercial adoption. Without this coordinated push, vulnerability and forex hemorrhage will continue. It is time our revered Annadata rises as Urjadata. The farms that feed us must now fuel us. The only missing ingredient is resolve. Will policymakers seize this crisis boldly today or wait for the next shock to force their hand and bleed the economy further?
(The author is President, Centre of Sustainability for Pure Earth)
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.