Essar to Invest ₹5,100 Crore in Gujarat Bio-Fuel Project, Targets Operations by 2029
By Axel Miller | 13 Jan 2026
Essar Future Energy Limited has announced a strategic investment of ₹5,100 crore to establish a large-scale greenfield bio-fuel complex in Gujarat’s Devbhumi Dwarka district. Located near Kajurda village in the Khambhaliya region, the project marks a significant step in the Essar Group’s shift toward cleaner energy infrastructure, aligning with India’s expanding low-carbon fuel roadmap.
The company formalised the commitment by signing a Memorandum of Understanding (MoU) with the Government of Gujarat during a Vibrant Gujarat-linked regional investment event held in Rajkot. Essar said the facility is expected to generate around 350 direct jobs, with commercial operations targeted to begin by 2029.
Strategic scope and project outputs
Designed to process 1 million tonnes of feedstock annually in its initial phase, the complex will utilise biogenic waste streams including used cooking oil (UCO) and palm oil mill effluent (POME).
The facility is planned as an export-oriented unit, strengthening Gujarat’s ambition to become a manufacturing base for advanced green fuels that can serve both domestic blending requirements and global demand.
The complex will focus on three primary products:
- Sustainable Aviation Fuel (SAF): to support aviation decarbonisation
- Hydrotreated Vegetable Oil (HVO): a renewable diesel alternative for road transport and shipping
- Bio-naphtha: a greener feedstock for petrochemical and refining applications
Leadership and government vision
Commenting on the development, Vibhav Agarwal, CEO of Essar Future Energy Limited, said the project aligns with Gujarat’s long-term industrial and sustainability priorities.
“This initiative is aligned with the vision of ‘Viksit Gujarat – Viksit Bharat @ 2047’,” Agarwal said. “We are proud to partner with the state to develop future-ready, low-carbon energy solutions that support both industrial growth and global sustainability.”
The MoU was exchanged in the presence of senior Gujarat government leaders and officials from the Energy & Petrochemicals Department, signalling strong backing for the state’s growing clean-fuels ecosystem.
Summary
Essar Future Energy will invest ₹5,100 crore to develop a 1 MTPA greenfield bio-fuel complex in Devbhumi Dwarka, Gujarat, targeted for commercial operations by 2029. The project will convert waste-based feedstocks such as UCO and POME into high-value clean fuels including SAF, HVO, and bio-naphtha, and is expected to generate around 350 direct jobs, according to the company.
Frequently asked questions (FAQs)
Q1: What is the total investment and scale of the project?
Essar has announced an investment of ₹5,100 crore for a facility designed to process 1 million tonnes of feedstock per year in its initial phase.
Q2: Where is the project located?
The facility will be set up in Devbhumi Dwarka district in Gujarat, near the Khambhaliya region, close to Kajurda village.
Q3: What products will the complex manufacture?
It will produce Sustainable Aviation Fuel (SAF), Hydrotreated Vegetable Oil (HVO), and bio-naphtha.
Q4: What feedstock will the plant use?
The plant will process biogenic waste streams, including used cooking oil (UCO) and palm oil mill effluent (POME).
Q5: When will the project begin operations?
Commercial operations are targeted to begin by 2029, subject to approvals and construction timelines.
Q6: How many jobs will the project create?
Essar said the project is expected to generate around 350 direct jobs, along with additional indirect employment through supply chains.
Q7: Why is this project significant for Gujarat?
It strengthens Gujarat’s positioning as an energy transition hub, supporting investments in clean-fuel manufacturing, logistics, and export capability.
Q8: How does it align with national goals?
It supports India’s long-term clean fuel strategy and aligns with national goals for lower-emission energy systems, including India’s Net Zero 2070 commitment.
