Biomass Briquette Manufacturing Business Plan:

Briquetting technology presents an innovative solution for converting agricultural and forestry waste into solid fuel. With the application of high mechanical pressure, these wastes are transformed into cylindrical logs known as briquettes, all without the need for chemicals or binders. These eco-friendly briquettes offer a sustainable alternative to traditional fossil fuels and find applications in various industries such as boilers, furnaces, and kilns. By harnessing this technology, we can reduce pollution, promote a greener environment, and save valuable foreign exchange.

The concept of briquetting revolves around the idea of “Wealth from Waste.” Farmers can generate income by using their agricultural residues to produce briquettes, effectively turning waste into a valuable resource. The advantages of this approach extend beyond financial benefits. Briquettes provide a renewable and efficient energy source, making them a viable solution for our fuel needs.

In countries like India, where arable land covers approximately 141 million hectares and agricultural output reaches around 800 million tons, a significant amount of waste is generated—approximately 750 million tons. Even after deducting the portion used as fodder (450 million tons), we are left with a staggering 300 million tons that could be used for biomass generation. Crop residues, including cane trash, paddy straw, coconut stalks, branches, and mustard waste, contribute an additional 75 million tons per year.

To utilize this abundant waste, biomass and wood residues are collected and processed in large storage units. These materials are then transformed into high-density fuel briquettes without the need for binders. This process not only provides a sustainable energy source but also helps reduce pollution and contributes to a cleaner and greener environment.

The benefits of biomass briquetting go beyond industrial applications. In many developing countries, where a significant portion of the population relies on biomass for cooking and heating, briquettes have played a crucial role in improving energy access. Projects focused on distributing improved stove technologies, promoting better cooking practices, and introducing briquettes as an alternative fuel source have positively impacted households. By replacing traditional fuels such as wood or charcoal with biomass briquettes, families can enjoy cleaner and more efficient energy for their daily needs.

Biomass briquettes and pallets are renewable sources of energy that are made from agricultural and forestry waste. The aim of this project is to establish a biomass briquettes and pallets plant in India that produces high-quality fuel products for domestic and industrial use.

Market Potential of Biomass Briquettes:

The market potential for biomass briquettes is significant, driven by increasing demand for renewable and sustainable energy sources. Biomass briquettes offer numerous advantages over conventional fuels, making them an attractive option for various sectors and industries. Let’s explore the market potential of biomass briquettes in more detail:

• Growing Demand for Renewable Energy: As global awareness of climate change and environmental sustainability increases, there is a growing demand for renewable energy sources. Biomass briquettes, derived from agricultural and forestry waste, are considered carbon-neutral since the carbon emitted during combustion is equivalent to the carbon absorbed by the plants during their growth. This environmentally friendly attribute positions biomass briquettes as a preferred alternative to fossil fuels.
• Industrial Applications: Biomass briquettes find extensive applications in industrial sectors such as boilers, furnaces, and kilns. These sectors require a consistent and efficient energy source to meet their heating and power generation needs. Biomass briquettes provide a reliable fuel option with high calorific value and low ash content, making them suitable for various industrial processes. Industries such as food processing, textiles, paper, and cement can benefit from the use of biomass briquettes.
• Residential and Commercial Heating: The residential and commercial sectors also present a significant market for biomass briquettes. As individuals and businesses seek to transition away from fossil fuels, biomass briquettes offer a viable alternative for heating homes, offices, schools, and other establishments. The consistent heat output, ease of use, and environmental benefits make biomass briquettes an appealing choice for heating applications.
• Agricultural and Rural Areas: In agricultural and rural areas, where agricultural residues are abundant, biomass briquettes provide a valuable opportunity to monetize agricultural waste. Farmers can convert crop residues such as straw, husks, and stalks into briquettes, creating an additional income stream. Moreover, biomass briquettes can be used for cooking and heating purposes in these areas, addressing energy needs while reducing reliance on traditional fuels like wood or charcoal.
• Government Initiatives and Incentives: Many governments worldwide are implementing policies and providing incentives to promote the use of renewable energy sources. Biomass briquettes, being a sustainable fuel option, align with these initiatives. Governments may offer subsidies, tax benefits, or favorable regulations to encourage the production and consumption of biomass briquettes. These supportive measures contribute to the market potential and attractiveness of biomass briquettes for both producers and consumers.
• International Market Opportunities: The market potential for biomass briquettes extends beyond domestic boundaries. Countries that lack sufficient domestic biomass resources may rely on imports to meet their renewable energy targets. Export opportunities exist for biomass briquette manufacturers to supply international markets where biomass resources are scarce but demand for sustainable energy remains high.

Objectives:

The objectives of the project are as follows:

• To produce high-quality biomass briquettes and pallets for domestic and industrial use in India.
• To create job opportunities for the local community.
• To contribute to the reduction of greenhouse gas emissions by promoting the use of renewable energy sources.
• To generate profit for the investors.

Why to use Biomass Briquettes ?

• High Calorific Value- 3400-4000 Kcal/Kg
• Lower Ash Content- 6% – 10%
• Lower Moisture- 3% – 10%
• Cost Effective- Cheaper than Coal
• Easy Handling- Easy to store & Transport.
• Low Pollution- Sulphur Less
• Longer Burning Duration
• Wastage/Loss- 8% – 10%

Steps to Start a Biomass Briquette Manufacturing Business:

• Conduct Market Research: Evaluate the demand and potential market for biomass briquettes in your target area. Identify the industries and sectors that can benefit from biomass briquettes as an energy source.
• Make a Business Plan: Create a detailed business plan outlining your objectives, target market, production capacity, pricing strategy, marketing approach, and financial projections. This plan will serve as a roadmap for your business.
• Secure Funding: Determine the investment required for setting up the business and arrange the necessary funds. Explore options such as personal savings, bank loans, investors, or government schemes that support renewable energy projects or small businesses.
• Establish the Manufacturing Facility: Acquire or lease a suitable space for your manufacturing facility. Ensure it meets the requirements for production, storage, and safety standards. Set up the necessary infrastructure and utilities, such as power supply, water, and waste management systems.
• Purchase the Machinery and Equipment: Purchase or lease the appropriate biomass briquette production machinery, including crushers, dryers, briquette machines, and packaging equipment. Consider the production capacity, automation level, and quality standards while selecting the equipment.
• Secure a Reliable Supply of Biomass Feedstock: Establish partnerships with suppliers or develop collection systems to ensure a consistent supply of biomass feedstock. This can include agricultural residues, wood waste, or other organic materials.
• Set Up the Production Process: Install and configure the machinery according to the production process. Develop standard operating procedures (SOPs) for quality control, briquette formation, drying, and packaging.
• Obtain Necessary Licenses and Permits: Research and obtain the required licenses, permits, and certifications for operating a biomass briquette manufacturing business. Ensure compliance with environmental, safety, and labor regulations.
• Implement Marketing and Sales Strategies: Develop a marketing plan to promote your biomass briquettes to potential customers. Utilize online and offline channels, industry associations, and trade shows to raise awareness and generate sales leads.
• Monitor Operations and Adapt: Regularly monitor production, quality control, and customer feedback. Continuously improve processes, adjust pricing strategies, and explore opportunities for diversification or expansion as the business grows.

Requirements for Biomass Briquette Manufacturing:

To establish a biomass briquette and pallets plant in India, several requirements must be fulfilled. These include:

• Land Area: A suitable piece of land with an area of 2500 sqmtr to 5000 sqmtr is necessary. This land should provide ample space for the plant infrastructure and storage of raw materials.
• Equipment: Modern equipment and machinery are essential for the efficient production of biomass briquettes and pallets. This includes briquetting machines, drying equipment, crushers, and other related machinery.
• Raw Materials: A reliable and sufficient supply of raw materials is crucial. Sources of agricultural and forestry waste, such as sawdust from sawmills, jute dust from jute mills, agro residues (e.g., rice husk, mustard husk, straw, paddy straw, groundnut shell), and forestry waste, should be identified and secured.
• Skilled Labor: The operation of the equipment and machinery requires skilled laborers and technicians who are familiar with briquette manufacturing processes. They should have the necessary expertise to handle the equipment and ensure smooth production.
• License and Permits: Obtaining the appropriate licenses and permits from local and national authorities is essential for the legal operation of the biomass briquette manufacturing plant. Compliance with environmental regulations and other regulatory requirements is vital.

Required Raw Materials:

The biomass briquette manufacturing process relies on specific raw materials, including:

• Sawdust: Collected from sawmills, sawdust serves as a valuable raw material for biomass briquette production.
• Jute Dust: Collected from jute mills, jute dust is another important component used in the manufacturing of biomass briquettes.
• Agro Residues: Various agro residues can be utilized, including rice husk, mustard husk, straw, paddy straw, groundnut shell, sugarcane bagasse or trash, tur, chana husk, and corn stalk. These residues are by-products of agricultural activities and can be effectively utilized in biomass briquette production.
• Forestry Waste: Residues and waste generated from forestry operations, such as branches, wood chips, and other forestry waste, can be valuable raw materials for biomass briquettes.

Plant Machinery & its Price:

Total Investment to start Biomass Briquette Manufacturing:

To start a biomass briquette manufacturing business, the total investment required can range from 82 lakh to 117 lakh (8.2 million to 11.7 million rupees). Here is a breakdown of the investment costs:

License Required:

• Registration of company.
• Factory License.
• GST Registration.
• Pollution Consent
• Trade License.
• Establishment Act License
• Power Connection.
• Trademark (if required)

Notification of Ministry of Power’s Policy:

The Ministry of Power has implemented a policy regarding the utilization of biomass for power generation through co-firing in coal-based power plants. This policy, which was issued in October 2021, mandates that all thermal power plants in the country must incorporate 5% to 7% biomass briquettes in conjunction with coal for power production. The initial results of this policy have been promising, as the utilization of biomass briquettes in coal co-firing has significantly increased since the introduction of the SAMARTH (Sustainable Agrarian Mission on use of Agro residue in Thermal Power Plants) initiative.

It is worth noting the following statistics regarding the usage of biomass briquettes:

• Till 24th July 2022, a total of 80,525 metric tons of biomass briquettes were used in 35 thermal plants.
• The current daily requirement for biomass briquettes stands at 95,000 metric tons.
• The current manufacturing capacity for biomass briquettes is 7,000 tons per day.

These figures clearly indicate a substantial gap between the demand and supply of biomass briquettes, thereby creating a significant business opportunity in India.

Revenue & Profits in Biomass Briquette Manufacturing:

Firstly, we will calculate here production cost for 1kg of biomass briquettes.

In cost of production, we included –

1. Raw material (sawdust, agriculture waste) = Rs 3
2. Other Overhead expenses=Rs .75
3. GST 5% =0.60 paise

Total cost of production will come INR 4.30 – INR 4.35

Average Costing= Rs 4.30 = Rs 4300/Ton

Consider, Production capacity of plant is 10 ton/day

let’s assume that the plant produces 300 tons of biomass briquettes per month, with a production cost of INR 4.30 per kg, and the selling price of the briquettes is

INR 5.70 – INR 6 per kg.

The revenue generated from the sale of biomass briquettes will be = 300,000 kg x INR 5.70 per kg = INR 17,10,000 per month.

The total production cost for 300,000 kg of biomass briquettes will be = 300,000 kg x INR 4.30 per kg = INR 12,90,000 per month.

The monthly profit for the plant can be calculated as follows:

• Profit = Total Revenue – Total Production Cost
• Profit = INR 17,10,000 – INR 12,90,000
• Profit = INR 4,20,000 per month
• Average profit will be 20% – 25%

Therefore, if the plant produces 300 tons of biomass briquettes per month, the estimated monthly profit can be INR 4,20,000, subject to variation based on the actual production and market conditions.

Loan Scheme & Subsidy Benefits:

Agriculture Infrastructure Fund:

• Interest subsidy of 3% for a term loan up to INR 2.00 Crore for a period of 7 years.
• CGTMSE Guarantee Cover eliminates the need for collateral security.
• Easy bank finance provided within 60 days.

MNRE (Central Financial Assistance):

• Financial assistance of INR 9 lakh per MT/hr production capacity, maximum up to INR 45 lakh.
• IPA (Interconnection Procedure Approval) required before commissioning the project.

State Level MSME Subsidy:

• Stamp duty refund on land purchase.
• CLU (Change of Land Use) fee refund.
• State capital subsidy on fixed capital expenditure (building and plant).
• Electric duty exemption.
• Employment generation subsidy.
• State interest subsidy.
• State GST refund.

Income Tax Exemption:

• Under section 80JJA of the Income Tax Act, 100% of the profit from the biomass briquettes business is exempt for 5 years from the year of commencement of business.

Central Pollution Control Board (CPCB) Subsidy:

• One-time grant for setting up a pellet unit using paddy straw (notification on October 14th, 2022).
• Application is on a first-come, first-serve basis.
• Subsidy of INR 14.00 lakh per ton/hr production capacity, maximum up to INR 70 lakh.
• Applicable for the NCR area (Delhi, Haryana, Punjab, Rajasthan & UP).

PMEGP (Prime Minister’s Employment Generation Programme) Subsidy:

• Applicable for projects with a cost up to INR 50 lakh (small projects).
• Capital subsidy up to 25% for general category and 35% for SC/ST/Women category.

Biomass Briquette Users Industries:

1. Textiles Mills
2. Brick Kiln
3. Food Industry.
4. Leather Industry.
5. Dyeing House.
6. Chemical Plants.
7. Thermal Plants.
8. Food Processing Units.
9. Rubber Industry.
10. Pharmaceuticals Industry.
11. Paper Mills.

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Risk of this Business:

The biomass briquette business carries certain inherent risks that should be considered. Market fluctuations, including changes in energy prices and government policies, can impact the demand for biomass briquettes. Supply chain challenges such as seasonal availability of biomass feedstock and competition for resources may affect the availability and cost of raw materials.

Additionally, there is competition within the industry, requiring efforts to differentiate and attract customers. Technological advancements in renewable energy sources could also pose a risk to the long-term demand for biomass briquettes. Managing these risks through market research, robust business planning, efficient supply chains, and staying informed about industry developments is crucial for the success of the business.

Conclusion:

Biomass Briquette business is a good opportunities, it is important to be aware of the associated risks. Market fluctuations, supply chain challenges, competition, and technological advancements are some of the key risks that need to be carefully managed. By conducting thorough market research, developing a solid business plan, maintaining reliable supply chains, and staying up-to-date with industry trends, the risks can be mitigated. A proactive approach to risk management, coupled with a focus on sustainability and environmental compliance, can help ensure the long-term success and profitability of the biomass briquette business.

FAQ(Frequently Asked Question):

Q: What are biomass briquettes ?

Ans: Biomass briquettes are compressed blocks or logs made from agricultural residues, wood waste, or other organic materials. These briquettes serve as a renewable and eco-friendly alternative to traditional fossil fuels and can be used for heating, cooking, and power generation.

Q: What are the advantages of using biomass briquettes ?

Ans: Biomass briquettes are a sustainable energy source as they utilize agricultural residues and organic waste, reducing the need for fossil fuels. They have a higher energy density than raw biomass, making them more efficient and convenient to handle. Biomass briquettes also produce lower emissions of greenhouse gases and particulate matter compared to traditional fuels, contributing to environmental conservation and improved air quality.

Q: How can one start a biomass briquette business ?

Ans: Starting a biomass briquette business requires careful planning and execution. Some key steps include conducting market research to assess demand and competition, securing reliable sources of biomass feedstock, investing in appropriate briquette production equipment, ensuring compliance with environmental regulations, and developing a marketing strategy to attract customers. It is essential to create a comprehensive business plan and secure necessary funding to establish and operate the business successfully.

Q: What are the investment to start a biomass briquette manufacturing business ?

Ans: The investment required to start a biomass briquette manufacturing business can vary depending on various factors such as scale of operations, location, machinery, and infrastructure. But to start a biomass briquette manufacturing business, the total investment required can range from 82 lakh to 117 lakh (8.2 million to 11.7 million rupees).

Q: What is the expected profit in Biomass Briquette manufacturing business ?

Ans: The expected profit in a biomass briquette manufacturing business varies depending on factors such as production capacity, market demand, cost management, and operational efficiency. While it is challenging to provide a specific figure, businesses typically aim for a profit margin of 10% to 20% of total revenue.

Q: What are the loan Scheme & Subsidy available for this business ?

Ans:

• Agriculture Infrastructure Fund.
• MNRE (Central Financial Assistance)
• State Level MSME Specific Subsidy and Incentive.
• Income Tax Exemption.
• Central Pollution Control Board (CPCB) Subsidy.
• PMEGP (For project up to 50 Lakh.)

Q: Can biomass briquette businesses contribute to environmental sustainability ?

Ans: Yes, biomass briquette businesses play a significant role in promoting environmental sustainability. By utilizing agricultural residues and organic waste as feedstock, they help reduce the reliance on fossil fuels and minimize waste disposal. Biomass briquettes have lower carbon emissions compared to fossil fuels, contributing to the mitigation of greenhouse gas emissions and combating climate change. Furthermore, the use of biomass briquettes helps in reducing deforestation and promotes the efficient utilization of agricultural by-products.

We hope that you would have liked reading this blog post on How to start Biomass Briquette Manufacturing Business in India ? For more such informative articles, keep visiting YMW Solution.

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