Bihar Biofuels Production Promotion Policy, 2023


In recent years, Bihar has been striving to create an investor-friendly environment in the state, aiming to attract investments, generate employment, and improve the welfare of its people. Building upon the success of the Ethanol Production Promotion Policy, 2021, the Government of Bihar has introduced the Bihar Biofuels Production Promotion Policy, 2023.

This policy expands the scope of biofuels production by including Compressed Bio-Gas (CBG)/bio-CNG manufacturing units. The policy not only emphasizes the utilization of agricultural residues, animal dung, food waste, Municipal Solid Waste (MSW), and sewage water to generate renewable automotive fuel but also aims to provide additional income to farmers and create employment opportunities.


The Government of India has been actively promoting sustainable and alternate fuels to reduce dependence on fossil fuel imports. Several interventions, such as the National Policy on Biofuels, 2018, the Ethanol Blended Petrol (EBP) Programme, and the reduction in Goods & Service Tax (GST) for biofuels, have been implemented. These initiatives address environmental concerns, reduce import dependency, and provide a boost to the agriculture sector.


The Bihar Biofuels Production Promotion Policy, 2023, aims to achieve the following objectives:

  1. Enable the production of Ethanol and Compressed Bio-Gas (CBG)/bio-CNG from various feedstocks permitted under the National Policy on Biofuels, 2018.
  2. Promote and incentivize investment in fuel-grade standalone new/green-field Ethanol and CBG manufacturing units in Bihar.
  3. Increase the income of farmers producing feedstock/raw material for biofuels production.
  4. Create local employment opportunities through the establishment of new Ethanol and CBG industries.

Coverage and Scope

The policy defines the eligibility criteria for different types of units and feedstocks. Standalone distilleries producing 100% fuel-grade Ethanol and CBG/bio- CNG manufacturing units are eligible for incentives under this policy. The production of Ethanol and CBG/bio-CNG from approved feedstocks mentioned in the National Policy on Biofuels, 2018, and subsequent permissions granted by the National Biofuel Coordination Committee are allowed in Bihar.

Incentives to Ethanol and CBG Manufacturing Units

To attract investments and promotethe biofuels sector in Bihar, the policy provides certain incentives to eligible units. Theguiding principles include the commencement of commercial production before availing
incentives, additional benefits under the Bihar Industrial Investment Promotion Policy, 2016, and the inclusion of ZLD-based Ethanol units. Special incentives are also offered to entrepreneurs from Scheduled Castes, Scheduled Tribes, Extremely Backward Castes, women, differently-abled individuals, war widows, acid attack victims, and the third gender.

Dovetailing with Central and State Government Policies and Schemes

The policy allows dovetailing with relevant Central and State Government policies and schemes, provided the units do not avail subsidies against the same assets under multiple policies. The coordination of incentives ensures an efficient utilization of resources and promotes holistic development. Special Incentive Package for Special Class Entrepreneurs: In recognition of the importance of promoting entrepreneurship among marginalized communities, the policy offers additional subsidies to Scheduled Castes, Scheduled Tribes, Extremely Backward Castes, women, differently-abled individuals, war widows, acid attack victims, and the third gender. However, these entrepreneurs must hold 100% stake in the company or firm promoting the manufacturing unit.

Submission of Application and Incentive Availability

Eligible units must submit their applications in stages to avail the incentives under this policy. The incentive availability is on a first-come, first-serve basis, with a deadline for submitting the stage-1 application. Units that have already received stage-1 clearance prior to the policy’s notification will also be covered.


The Bihar Biofuels Production Promotion Policy, 2023, is a significant step towards promoting sustainable energy and reducing dependency on fossil fuels. By expanding the coverage to include CBG/bio-CNG manufacturing units and incorporating various feedstocks, the policy creates a favourable environment for investment, empowers farmers, and generates employment opportunities. With the right implementation and collaboration between the government, industries, and stakeholders, Bihar can emerge as a leader in the production of biofuels and contribute to a greener future for the state and the
nation as a whole.

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