How to Estimate Fuel Cost Savings from Biomass Pellets: Method and Worked Example

Industrial fuel is one of the largest controllable costs for a manufacturer, so it deserves a careful comparison rather than a headline percentage. Whether biomass pellets cost less than your current fuel depends on your coal grade, delivered prices, boiler efficiency and ash handling. This guide shows the method and a worked example built on assumed prices. Replace the assumptions with your own invoices.

Lever 1: Price per Kilogram Is Not the Right Measure

Compare fuels on cost per million Kcal of heat delivered. Divide 1,000,000 by the fuel’s GCV to get the kilograms needed per million Kcal of heat input, multiply by the delivered price per kilogram, and adjust for boiler efficiency. BBI pellets are quoted at roughly ₹8 to ₹12 per kg for bulk ex-factory orders, with a GCV of 3800 to 4200 Kcal/kg.

Lever 2: Match the Coal Grade You Actually Burn

The Ministry of Coal grades coal by GCV: for example G-12 is 3700 to 4000 Kcal/kg, G-11 is 4000 to 4300, G-10 is 4300 to 4600, and G-8 is 4900 to 5200. Higher-grade coal carries more heat per kilogram, so a tonne of G-8 coal needs about 1.26 tonnes of white coal at 4000 Kcal/kg to deliver the same heat. White coal is not a one-for-one replacement for every coal.

Lever 3: Count the Hidden Costs

• Ash handling: Indian coal ash is generally 25 to 45% according to the Ministry of Coal, while BBI briquettes and pellets are below 10%, typically 2 to 8% depending on feedstock. Lower ash means less to remove and dispose of.
• Cleaning time: Boiler cleaning intervals depend on your boiler and fuel; record them before and during a trial rather than assuming a figure.
• Moisture: Wet fuel wastes heat. Ask for the as-received moisture on the lab report.
• Tax: Biomass briquettes and solid bio-fuel pellets are listed at 5% GST and coal at 18% as of October 2026; confirm on the CBIC schedule, and note whether you can claim input credit.

Worked Example with Assumed Prices

These figures are assumptions for illustration, not quotes. Suppose coal at GCV 4000 Kcal/kg is delivered at ₹12 per kg and pellets at GCV 4000 Kcal/kg are delivered at ₹9.5 per kg, both at the same boiler efficiency.

On these assumed numbers, the items counted come to about ₹3.16 lakh less per month with pellets. If your coal is cheaper, or your boiler runs less efficiently on pellets, the result changes. Run the same arithmetic with your own figures in our fuel cost calculator.

How to Test Before You Commit

1. Record your baseline fuel use per tonne of steam for at least a week.
2. Order a trial lot of at least 25 MT, our minimum order, and ask for the batch lab report.
3. Burn the lot at normal load, record air settings, ash and cleaning events.
4. Compare cost per tonne of steam, then decide on a contract such as 50 MT per month.

For a comparison built on your plant data, contact our team.