India’s net-zero energy future stands at the crossroads of two transformative visions — biofuel expansion and circular economy adoption. Together, they form a pragmatic yet visionary pathway for decarbonisation, energy independence and sustainable rural revitalisation for the people in the last mile to bring in equity and developmental justice. The interplay between these two domains could define India’s trajectory towards its net-zero goal by 2070 and its aspiration for an energy-independent Viksit Bharat by 2047.
The Energy and Environmental Crossroads for the Last Mile
Even now, more than half of India’s population depends on farming. Each year, they produce over 500 million tonnes of crop residue, most of which is still burned, polluting the air and filling it with smoke. This practice recurs every winter, from October to December. People blame the stubble burning in northern India for the smog crisis in Delhi, making it almost an annual event.
The real solution, however, lies in decisively rejecting stubble burning and embracing the R-imperatives of the circular economy by turning agricultural residues into valuable resources and upcycled products, such as biofuels, that flow back into and strengthen the country’s economy. Biofuel projects support both the ideas of “Design out waste and pollution” and “Regenerate natural systems,” but they align best with the latter. This is because turning organic waste into renewable energy actively restores ecological balance and moves us towards a regenerative, circular future.
The government can transform a long-term environmental problem into an economic opportunity by encouraging farmers to follow the “R-principles” of the circular economy: refuse, reuse, recycle and repurpose. Promoting the use of crop residues as feedstock for biofuels can help make agriculture more circular and assist the country in reaching its renewable energy goals. Biofuel is no longer merely a cleaner alternative to fossil fuels, but it is fast becoming a key part of a new economic model that uses resources more efficiently. When agricultural waste is seen as a useful resource rather than a problem, and when systems and incentives are in place to extract value from it, the shift from burning to processing will not only clean the air but also help India become less dependent on foreign energy sources and create jobs for rural communities.
Biofuels: From Policy Promise to Bioeconomic Industrialisation
Today, India is actively promoting biofuels, starting with first-generation ethanol (from sugarcane), second-generation biofuels (from lignocellulosic residues like paddy straw and corn cobs), and emerging third-generation algae-based fuels, following the revised biofuel policy of 2022. The government’s Roadmap and Target for Ethanol Blending in India 2020-25 have already been achieved.
This has saved nearly USD 4 billion annually in crude oil imports and reduced emissions by 20 million tonnes of CO2 equivalent. However, it now needs to establish sustainable long-term revenue streams for farmers. Circular economy-based business model integration is the approach to achieve this. To expand such circular economy efforts, scaled-up production of compressed biogas (CBG) from organic waste streams for use in transportation and industry must be prioritised, leading India into a new era of “Bioeconomic Industrialisation” and forging a path towards a “Bioeconomic Century.”
The rise of the circular economy originates from the policy inception of “The BioE3 Policy (Biotechnology for Economy, Environment and Employment),” approved in August 2024, which marks India’s most cohesive step towards a circular bioeconomy and paves the way for the next phase of “Bioeconomic Industrialisation” in India. This new scope of “Bioeconomic Industrialisation” aims to bridge the gap between agriculture and the service sector within the Indian economy, with the circular economy playing a crucial role.
A key element of this circular economy for India’s Bioeconomic Industrialisation is the promotion of regenerative biomanufacturing, replacing chemical-based production with biobased pathways aligned with net-zero targets. Essential components will include biofoundry clusters, bio-AI hubs and local employment programmes harnessing regional biomass, especially in tier-II and tier-III cities. This integration of biotechnology, sustainability and rural industrialisation, shaping the circular bioeconomy, will promote equity in India’s development journey.
In this new pathway to bring equity to the last mile, waste streams will be turned into industrial inputs — bioethanol residues will convert into bioplastics, digestate from biogas plants will enrich soil and carbon capture from fermentation processes will feed into synthetic fuels. All of these will happen within the grassroots, led by people from the soil who will spearhead India’s new “Bioeconomic Industrialisation” and “Ecological Renewal.” Given that the primary feedstock of all these will be biomass and that the biomass market is expected to grow by 7.47 per cent between 2025 and 2033, led by Uttar Pradesh (60 million tonnes), Punjab (51 million tonnes) and Maharashtra (46 million tonnes), this “Bioeconomic Industrialisation” might not be a distant dream in the near future. Throughout this journey, new technological frontiers must be developed, harnessing torrefied biomass pellets and hybrid lignocellulosic pathways.
The scope of transforming rice straw into energy-dense pellets will demonstrate how circular design can convert waste streams into market-ready products. The economic incentives for farmers and rural entrepreneurs, utilising the circular economy as an integrator, will be key to creating India’s new-age “Bioeconomic Industrialisation” for Viksit Bharat by 2047.
The future of the circular economy as an integrator posits multiple pictures in front of us where we can see -n Agricultural residues converted to ethanol, biogas or energy pellets, closing the loop in rural waste management.
n Nutrient-rich digestate from biogas plants replacing chemical fertilisers, cutting fertiliser subsidy burdens.n Industrial by-products — glycerol, bagasse and wastewater — repurposed for biochemicals or energy cogeneration.n Urban organic waste integrated into municipal bioenergy grids, expanding the circular model to cities.All of the above will require new ways of designing landscapes for rural and urban societies, developing cultural innovations and exploring mindsets in both city and rural areas.
Such changes will bring benefits, including the creation of nearly 18 million rural jobs through circular economy-based biofuel businesses that support an integrated biofuel supply chain covering logistics, biorefinery operations and waste collection services.
This employment potential can grow further with well-managed, invested, risk-hedged and policy-stable decentralised CBG and ethanol plants, promoted by waste segregation and regional innovation clusters. In this context, the government has mandated co-firing biomass pellets in coal power plants, aiming to replace 50-60 million tonnes of coal and develop a sustainable rural biomass supply chain.
However, India must overcome barriers such as seasonal variability, supply fragmentation and cost-effective biomass collection, baling and transportation logistics.
Transitioning to 2G ethanol plants has been difficult due to high capital costs, and commercial viability remains beyond the pilot stage. Policy uncertainty, overlapping mandates and subsidy delays can weaken investor confidence; without sustained investment, sector growth stalls.
While the food-versus-fuel debate will persist, shifting from sugarcane-based ethanol to non-edible feedstocks such as agricultural residues and algae is a necessary long-term goal for India.
This shift will show the world that India can achieve a Viksit Bharat by 2047 through “Bioeconomic Industrialisation,” which promotes justice, last-mile equity, ecological and cultural renewal and revival, countering the long-term effects of Western industrialisation, which led to colonialism and a new form of capitalism.
Animesh Ghosh is PhD Scholar from IIT Kharagpur and Anandajit Goswami is CEO and Founder of TOHRI Foundation