GHANAUR, India — THE hulking power plant set against the green countryside of Punjab state in northwest India does not look like a source of renewable energy. Yet filling its stockyard, instead of mounds of coal, are bales of rice straw. Machines break up the heavy straw cubes as men with pitchforks hoist fibrous mounds onto a conveyor belt leading to the power plant. Handkerchiefs cover their faces to protect them from dust swirling in the air.

This is Punjab Biomass Power, a plant near the village of Ghanaur that collects the straw collected from farmers tilling the lush fields of the surrounding countryside. After harvest, they would normally burn this agricultural waste, inedible to people and animals, to clear fields for wheat crops, as farmers across India do, and in that way contribute to the country’s dire air pollution. But at Punjab Biomass, 120,000 tons of rice straw a year are instead burned to generate 12 megawatts of electricity for the state’s power grid.

The plant produces emissions, although its filters reduce the amount that outdoor burning would generate. But such biomass energy in theory is considered carbon-neutral because of what these plants use as fuel — like sugar cane pulp and nut shells that took carbon dioxide out of the atmosphere as it grew. Biomass power plants are eligible for carbon credits that translate into cash, and Punjab Biomass hopes to eventually earn hundreds of thousands of dollars a year from the plant.

Yet biomass is far from a solution to the enormous energy needs of India and its 1.2 billion people. Alternative energy, like wind, biomass and solar, accounted for less than 8 percent of India’s power generation in 2009. Still, because India imports about 70 percent of its oil and natural gas and relies on coal for more than half of its electricity generation, it must consider all options for energy.