India’s Quest To Cut Fossil Fuel And Other Cleantech Trends For 2026

A blend of bold policy moves and growing private-sector innovation drove Indian cleantech in 2025. However, the shift still faced several significant gaps.

The nationwide rollout of 20% ethanol-blended petrol (E20) clearly reflects this picture. While the government intends to cut emissions and reduce the country’s dependence on fossil fuels, the move has ignited several concerns. The implementation happened nonetheless. 

Private enterprises and academic institutions are also stepping up their game in the emerging biofuel trends, which has become a focal point for cleantech. These range from generating electricity or green hydrogen from waste to biotechnology innovation for producing cleaner gases and aviation fuels. And this is just the tip of the iceberg.

For instance, Karnataka’s Udupi now has India’s first industrial-scale biofuel and biochar carbon removal plant, established by an Indo-Danish climate tech startup, MASH Makes. The startup uses cashew waste to produce biofuel for heavy industries like shipping and biochar, a soil enhancer that improves fertility and captures carbon.

Besides, the Adani Group recently announced the successful commissioning of India’s first off-grid 5 MW green hydrogen pilot plant in Gujarat. Earlier this year, Reliance Bioenergy started the process of setting up 500 compressed bio-gas (CBG) plants in Andhra Pradesh, utilising 5 Lakh acres of wasteland for renewable energy production.

While India’s installed biopower capacity remains modest, around 11 GW of the country’s 505 GW total power generation capacity, experts see the momentum gaining pace. 

Meanwhile, they are also hopeful about green hydrogen, which is poised to see better days ahead. What else? Well, as we inch closer to 2026, we have endeavoured to trace and track India’s cleantech and energy transition trends as part of Inc42’s 2025 In Review series. Here’s what to expect…  

India’s Biofuel Transition 

Besides ethanol blending, experts are observing an increasing push for producing greener and cleaner gases. 

According to Vasudha Madhavan, founder and CEO of climate-focussed investment advisor firm Ostara Advisor, the focus is shifting towards replacing a part of the LPG, CNG, and LNG demand with clean gaseous biofuels like biomethane, produced through biodigestion of organic waste. 

“LPG, CNG, and LNG are still fossil-fuel gases, currently being bought from the Middle East and other countries.” 

She added that investors and startups are beginning to act, and this could become a major trend in India’s energy transition in 2026.

Pawan Raj Kumar, founder of ZeCa Capital, noted that new startups are emerging that work directly with farmers and farmer-producer organisations (FPOs) to collect cow dung and other agricultural waste. “They are setting up small plants to convert that into energy for small-scale usage.”

Green Hydrogen Hopes Rise

India showed some progress in the area of green hydrogen production in 2025. The country launched five pilot projects, involving 37 hydrogen vehicles (buses and trucks) and nine refuelling stations on 10 different routes. A port-based pilot project was also commissioned in Tamil Nadu to supply green hydrogen for applications, including street lighting and an EV charging station.

Prasanta Sarkar, CEO and cofounder of green hydrogen startup Newtrace, believes that although the government has done well in terms of installation of renewable assets, round-the-clock production of renewable energy is still a problem.

According to him, while there have been many announcements in areas like green hydrogen and green ammonia production, there is little ground movement beyond a few pilot activities. 

“We expect some kind of policy push to happen in the coming year to move the large-scale industrial adoption of green hydrogen and other cleaner fuels, but it should be on the commercial operations and not on a pilot level,” Sarkar said.

Notably, earlier this year, the Indian government launched the Green Hydrogen Certification Scheme of India (GHCI) to enable MSMEs to play a role in the development of the green hydrogen ecosystem.

Mobility’s Goals 

Cleantech industry experts unanimously agree that the transportation and mobility sector will continue to see major changes when it comes to curtailing emissions. 

While two and three-wheelers have led electrification so far, the EV sector is now entering its next phase of growth with e-tractors for rural agriculture, electric ambulances, and intra-state electric buses.

Jaideep Saraswat, the associate director of clean power, electric mobility and emerging technologies at Vasudha Foundation, notes that besides the Centre-level policy moves, state-level electrification policies will be a major area to look out for. The recent announcement by the Maharashtra government to support the development of e-trucks and allied infrastructure is a case in point.

“A big push is expected to come on the battery and energy storage system side. The transport sector will see medium- and heavy-duty trucks and such other vehicles transition towards zero emissions. Even battery circularity will gain a lot of traction in 2026,” he said.

Just Transition In Focus

As the world focusses on transitioning its energy system to renewables, the importance of doing it in a manner that doesn’t do injustice or adversely impact the workforce, communities and economies is crucial.

A World Economic Forum report suggests India’s green transition will impact fossil fuel-dependent sectors, such as coal mining, thermal power, cement, steel and automobiles, with consequences acutely visible in regions like Jharkhand, Chhattisgarh and Odisha.

Amid the changes, just transition initiatives are set to gain momentum in the coming years in the country. Therefore, there is a significant focus on developing skills, upskilling, and reskilling the existing workforce in the energy ecosystem as India transitions to renewables.

“We are training over 10,000 small organisations across about 15 states in India to help them learn and design some of the best solar rooftop solutions and deploy them. Also, many electrical contractors are looking to transition and become empanelled vendors under PM Surya Ghar… they require upskilling, and we are helping them,” said Saraswat.

Industrial Decarbonisation To Be In Focus

Emission scopes and goals are multifold. So, even when there is a push to adopt energy transition, that is not enough. With time, ensuring overall industrial decarbonisation is becoming a major area of focus for large corporations to comply with the ESG norms.

For instance, decarbonisation in the textile industry is now becoming crucial to adhere to the EU regulation of CBAM (Carbon Border Adjustment Mechanism) as the country increases its exports to European nations. Organisations are trying to adopt and enable the adoption of heat pumps used in the textile industry to replace fossil-fuel-based heating systems. 

ZeCa Capital’s Kumar said new startups are working on burners that allow industries to retrofit their existing boilers to run on agricultural waste, as traditional boilers are designed to burn LPG or coal.

On the other hand, while the concept of carbon credits still remains highly nascent in India, startups are emerging in this area too, allowing corporations to either track their carbon footprint or help generate carbon credits. 

Recently, Bengaluru-based Equilibrium raised $3 Mn from Kalaari Capital, Peak XV Partners and Avaana Capital to build projects that work with farmers to generate high-quality carbon credits through agroforestry, regenerative agriculture, organic farming and biochar.

New Frontiers To Shape Cleantech In 2026

India’s path to net-zero by 2070 hinges on two pillars – technological innovation and R&D. However, over-consumption of goods is another key aspect that must change to build a cleaner environment. 

D2C brands are emerging as a key lever in this consumption shift, with recycled, upcycled and sustainable products gaining traction across textiles and household goods.

Startups like Akshayakalpa Organic and Two Brothers Organic Farms are attracting private capital, narrowing the gap between consumers of sustainable food products and farmers. Beyond food, VCs are increasingly factoring ESG mandates, often driven by European limited partners, into their investment theses, accelerating capital flow toward sustainable alternatives.

AI is also quietly becoming a critical enabler across the cleantech ecosystem, improving everything from carbon tracking to predictive maintenance. 

Kolkata-based FloraCarbon AI, for instance, runs agroforestry and afforestation projects with farmers to generate carbon credits, while using AI to help users navigate carbon standards and answer technical queries. 

Going forward, AI is going to play a major role across all the sub-segments of cleantech innovation and become an underlying theme, just like it is becoming in most other industries.

While energy transition is expected to lead the cleantech narrative in 2026, the need for a collective effort and smarter government policies across industries remains more urgent. 

Creating a level playing field between incumbents and emerging players, especially in areas such as green hydrogen, nuclear fusion and biofuels, is also crucial. 

Without policy clarity and support infrastructure tailored to these frontier technologies, the transition risks remaining fragmented and slow. The window for systemic change is narrow, yet only a coordinated effort across innovation, capital and policy can unlock it.

Edited by Shishir Parasher