The last straw: India’s burning fields turn into an energy opportunity

Each year, northern India's skies are cloaked in smoke after the rice harvest, releasing greenhouse gases and aggravating air pollution. Talwandi Sabo Power Limited (TSPL), a subsidiary of Vedanta Limited, saw an opportunity to collaborate with farmers and entrepreneurs to build a supply chain that transforms agricultural waste into a valuable industrial resource, Gaurav Sarup, Chief Sustainability Officer at Vedanta Limited explains.

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Each year after the rice harvest, large parts of northern India are cloaked in smoke. Farmers, pressed for time between cropping cycles, often burn the leftover straw to clear their fields quickly. This practice, known as stubble burning, releases massive amounts of greenhouse gases and particulate matter, aggravating air pollution and contributing to climate change.

The problem isn't lack of awareness - it's lack of alternatives. For farmers, paddy straw has little market value and collecting or transporting it is expensive. The result is a recurring environmental crisis that peaks every autumn.

At Talwandi Sabo Power Limited (TSPL) in Punjab, we saw an opportunity to address this challenge from a different angle - not by focusing only on what happens on the farm, but by working to stitch together the broken supply chain between agricultural residues and industries that can use them, creating value for farmers and delivering a cleaner, more cost-effective fuel mix for our power plant boilers.

Closing the gap between farm residues and bioenergy

India has abundant biomass resources - organic resources derived from plants or animals - but the link between farmers, aggregators, processors and energy users remains fragmented. Transport distances are long, residue density is low making collecting and transporting the biomass inefficient and expensive and storage is cumbersome. Even when industries are willing to co-fire biomass in boilers or gasify it for energy, consistent supply becomes a major barrier.

The question for us was clear: Can we create a dependable, local biomass ecosystem that benefits both farmers and energy producers?

Building a circular supply chain from the ground up

The effort began with something simple - listening. Farmers were keen to find alternatives to burning but needed guaranteed buyers and timely payments. Entrepreneurs wanted to set up pelletisation or briquetting units - technologies for compressing loose biomass into denser, easier to handle forms - but faced uncertainty about long-term demand.

To bridge these gaps, TSPL began collaborating with multiple stakeholders - local entrepreneurs, equipment suppliers, logistics providers and state agencies - to design an ecosystem where everyone had a role and a return.

Here's how the pieces fit together:

1. Farmers collect and sell paddy straw and residues to local biomass processing units.

1. Local biomass processing entrepreneurs process these residues into compact, energy-dense forms that are easier to store and transport.

1. We, at Talwandi Sabo Power Limited, purchase these compact pellets to co-fire in our 1,980-MW power plant boilers, allowing us to partially substitute coal with a carbon-neutral alternative.

Through this, an informal, unorganised waste stream evolved into a structured, value-driven supply chain.

From pilot to fully integrating biomass into our energy mix

What started as a limited trial has now become an operational part of our fuel mix. TSPL has developed the capacity to co-fire up to 5% biomass in its boilers, equivalent to tens of thousands of tonnes of paddy straw diverted from open burning every year.

This is not just about fuel substitution - it's about systems integration. Every link in the chain needed coordination: aligning procurement timelines with harvest periods, designing contracts flexible enough to account for monsoon variability and creating a price discovery mechanism that's fair to both farmers and processors.

By tackling key bottlenecks in biomass supply and utilisation, the initiative has prevented the burning of thousands of tonnes of crop residue and avoided significant CO2 emissions, while generating employment and income opportunities in rural Punjab. To put this into perspective, replacing just 5% of coal with biomass in a 1,980 MW power plant can avoid around 0.7 million tonnes of CO2 emissions annually - equivalent to taking over 150,000 cars off the road each year.

Lessons from the field

Building a biomass supply chain is not a technical challenge alone, it's a logistical and behavioural one. Some key lessons emerged along the way:

1. Aggregation matters more than availability. India doesn't lack biomass; it lacks mechanisms to collect and channel it efficiently. Local entrepreneurs are the essential link that makes this system work.

1. Policy alignment accelerates progress. Supportive government policies - such as transport subsidies or mandates for biomass co-firing - can make the economics work for all players.

1. Consistency builds confidence. Once farmers and processors saw assured demand from the power plant, participation grew rapidly. Trust and predictability are as important as price.

A new perspective on agricultural residue

While the project contributes to emission reduction, its broader impact lies in transforming how we view agricultural waste. Instead of seeing paddy straw as a problem, it is now being recognised as a resource that can feed local energy systems.

This shift supports rural industrialisation - encouraging the growth of micro-enterprises that process and supply biomass. It also strengthens climate resilience by diversifying income for farmers and reducing pollution-related health impacts in nearby communities.

The model is inherently replicable. Whether for cement kilns, industrial boilers or other thermal applications, the underlying principle remains the same:

Connect the dots between waste generation and energy demand.

The next challenge is scaling up

Expanding co-firing beyond 5% will require further technological adaptation, improved pellet quality and expanded storage capacity. But the most critical task remains expanding the network of local suppliers and entrepreneurs to ensure year-round availability.

What began as an operational necessity - reducing dependence on coal - has evolved into a platform for collaboration between farmers, innovators and industry. Each stakeholder plays a part:

• Farmers gain income and cleaner fields.
• Entrepreneurs establish new rural businesses.
• Industries cut carbon emissions without sacrificing reliability.

By weaving these strands together, we are slowly transforming one of India's most stubborn environmental problems into a circular economy opportunity.

The journey is far from over, but one thing is clear: solving climate challenges in developing economies often depends not on radical new technologies, but on the quiet work of connecting existing ones - linking people, processes and possibilities into a functional whole.

2025 is a critical year for the Paris Agreement. Ten years on, we need to rethink how we frame the challenge. And seeing challenges differently is what business and we are all about.

ICC is committed to securing what businesses need at the upcoming climate negotiations, COP30, in Belém, Brazil. Learn more about our Opportunity of a Lifetime climate campaign and how to get involved.

*Disclaimer: The content of this article may not reflect the official views of the International Chamber of Commerce. The opinions expressed are solely those of the authors and other contributors.