Industry Bottlenecks
Raw material supply is highly seasonal, concentrated in harvest months, making year-round stable supply challenging. Shortage of baling and collection equipment is common. Local farmers are accustomed to open straw burning, and the biomass collection, storage and transportation chain remains underdeveloped. Raw material gathering cost is the biggest bottleneck for pellet projects.
2. National & Provincial Support Policies for Biomass & Biomass Pellets
Regulatory Authority: AEDB (Alternative Energy Development Board) in charge of national renewable energy policy implementation. The Ministry of Climate Change and provincial agriculture & environmental protection bodies manage straw control and demonstration projects.
2.1 Federal-level National Policies (Applicable to biomass energy projects including pellet-fired heating & power plants)
Renewable Energy Policy 2019 (Updated 2020)
- Applies to biomass power generation and biomass heating projects (pellet-supported facilities qualify).
- Core incentives: Custom duty exemption for imported project equipment, income tax holiday & tax reductions. Registered projects can sign PPA (Power Purchase Agreement) with NEPRA for grid-connected biomass power with feed-in tariff.
- National target: Biomass is included in the 2030 renewable energy power share goal.
Note: The federal government offers no direct cash subsidies solely for pellet manufacturing factories. Incentives mainly target power generation assets instead of standalone pellet production lines.
