The Growth of the Biomass Pellet Industry in Gujarat: A 2026 Perspective

Gujarat has always been India’s industrial powerhouse — home to textile mills in Surat, ceramic clusters in Morbi, chemical belts in Ankleshwar and Vapi, and one of the busiest port networks in the country. In 2026, a quieter but equally powerful shift is running underneath all of it: industries across the state are replacing coal and furnace oil with biomass pellets — compact, renewable fuel made from crop residue like groundnut shells, cotton stalks, and agricultural waste.

At Pellexion Bio Energy, based in Kalavad, Jamnagar, we sit right at the center of this transition — sourcing agri-waste from Saurashtra’s farms and converting it into high-calorific biomass pellets and briquettes for industrial boilers across Gujarat and beyond. Here’s a deep, step-by-step look at what’s driving this growth, and where it’s headed.

Three structural advantages make Gujarat uniquely positioned to lead India’s biomass pellet industry:

This combination — feedstock, demand, and logistics all in one state — is rare, and it’s why Gujarat now hosts one of India’s densest concentrations of biomass pellet and briquette manufacturers.

India’s biomass pellet market is expanding fast. Industry estimates put the domestic market at roughly USD 552 million in 2023, projected to cross USD 1.2 billion by 2035 as thermal power plants and heavy industry scale up biomass consumption. Within this, Gujarat holds one of the largest shares of installed pelletizing capacity in the country, with dozens of manufacturing units spread across Jamnagar, Rajkot, Morbi, Junagadh, Surat, Kutch, and Banaskantha, ranging from small 30 TPH (tonnes per hour) units to large 100 TPH plants.

The state has also set an ambitious target of 100 GW of renewable energy capacity by 2030 under its “Mission 100 GW of RE in Gujarat” initiative, and biomass is a growing part of that broader clean-energy mix alongside solar and wind.

The Gujarat Pollution Control Board (GPCB) has steadily tightened emission norms for industrial units running on coal and furnace oil, particularly in high-density clusters like Morbi’s ceramic belt and Ankleshwar’s chemical zone. Coal-fired boilers face rising compliance costs, stricter monitoring, and in some cases, operational restrictions.

Biomass pellets offer industries a straightforward path to compliance:

This makes switching to biomass one of the fastest, least capital-intensive ways for a factory to bring itself into environmental compliance without shutting down operations.

Central government policy has added real momentum. Under the Ministry of Power’s revised biomass co-firing policy, thermal power plants are required to co-fire biomass pellets with coal — the mandate stood at 5% from FY 2024-25, rising to 7% from FY 2025-26, with NTPC’s own internal roadmap targeting 10% co-firing across its plants. This alone is estimated to create captive demand for several million tonnes of biomass pellets annually across India.

On the manufacturing side, the MNRE’s National Bioenergy Programme provides Central Financial Assistance for new briquette and pellet plants — currently up to ₹9 lakh per metric-tonne-per-hour of capacity, capped at ₹45 lakh per plant. The Reserve Bank of India has also classified biomass pellet manufacturing as an eligible activity under Priority Sector Lending, making bank financing easier for new and expanding units.

Gujarat’s farms generate a steady, low-cost supply of pelletizing feedstock, including:

At Pellexion Bio Energy, our own product range — including groundnut shell pellets, coriander waste pellets, and mixed agri-residue pellets — is built directly around this local feedstock advantage. It also creates a secondary income stream for farmers who previously had no commercial use for this residue.

Because coal and diesel prices are exposed to global supply shocks and import duties, industries that lock in biomass supply contracts get a more predictable input cost — an increasingly important factor for manufacturers running on thin margins.

Biomass pellets and briquettes are now used across a wide spread of Gujarat’s industrial base:

This breadth of demand is exactly why biomass has moved from a niche alternative fuel to a mainstream industrial input in the state.

Gujarat’s biomass manufacturers are increasingly export-oriented. Proximity to Kandla, Mundra, and Pipavav ports gives the state’s pellet producers a logistical edge for shipping to international buyers. Global demand is rising sharply because of the EU’s Renewable Energy Directive III (RED III), which pushes European utilities to replace coal with certified biomass fuel — creating a real opportunity for Indian, and specifically Gujarati, manufacturers who can meet international quality and traceability standards.

Based in Kharedi, Kalavad, Jamnagar, Pellexion Bio Energy manufactures and supplies biomass pellets and briquettes made from groundnut shell, coriander waste, mixed agricultural residue, and other locally sourced feedstock. Our process — from raw material selection and crushing/grinding through high-pressure pelletizing/briquetting to strict quality testing — is built to deliver consistent, high-calorific, low-ash, low-moisture fuel that industrial boilers can rely on year-round.

We currently serve a wide industry base including food processing, textiles, pharmaceuticals, chemicals, ceramics and tiles, paper and pulp, brick kilns, dairy, rubber, steel re-rolling, hotels, and power generation — helping each one cut emissions and stabilize fuel costs without disrupting existing boiler infrastructure.

With GPCB norms tightening further, national co-firing mandates rising toward double digits, and MNRE subsidies continuing to lower the barrier to entry for new manufacturers, biomass is on track to become a default industrial fuel across Gujarat rather than an alternative one. As coal and diesel remain exposed to price volatility and regulatory pressure, the industries that lock in biomass supply early — and manufacturers who invest in consistent quality now — are best positioned for the next phase of growth.

Pellexion Bio Energy is a Jamnagar, Gujarat-based manufacturer and supplier of premium biomass pellets and briquettes for industrial and commercial applications. Get a free quote or explore our products.