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The Uttar Pradesh Cabinet on Tuesday cleared the bioenergy policy in an attempt to attract big-ticket investments and increase agriculture income in the state. The policy aims at supporting and promoting production of compressed biogas, bio-coal, ethanol and biodiesel in the state. The Cabinet also gave the go-ahead to the MSME (small and medium enterprises) policy that seeks to open and promote such units in all districts.

“The bio-energy policy will help increase farm income by making better use of stubble and agricultural and sugar mill waste and promote rural employment by using organic waste for energy generation. Besides, it will also help make better use of urban waste,” the government said in a statement.

The policy has three components — compressed biogas plants, bio-diesel and bio-coal. The policy duration will be for five years to provide incentives on production. Subsidy of Rs 75 lakh per tonne (maximum Rs 20 crore) will be provided on compressed biogas production. In case of bio-coal production, a subsidy of Rs 75,000 per tonne (maximum Rs 20 crore) will be given. For biodiesel, a subsidy of Rs 3 lakh per kilolitre (maximum Rs 20 crore) will be provided.

In all these cases, the subsidy would be 15 per cent of the total incurred cost. Applications would be sought at the district level for opening plants on land given by the government on a lease of 30 years, against a token amount of Rs 1. A committee will also be formed for aggregation of raw material or bio material from farmers, producer organisations or mandi samitis etc.

In case of those engaged in aggregation work, the government will provide a 30 per cent subsidy on the purchase of machinery for collection, transportation and storage of the material.

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Stamp duty and power duty on such units will be exempted. Also, in case of units with an investment of Rs 50 crore or more, the government will construct at least 5-km approach road to the unit. A daily target of 1,000 tonne production has been set for compressed biogas with an approved subsidy of Rs 750 crore, the same is 4,000 tonne a day for bio-coal with a subsidy of Rs 30 crore. For bio-ethanol and bio-diesel, daily production target will be 2,000 with Rs 60 crore subsidy.

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