Chandigarh, Feb 11 (IANS): In a bid to check stubble burning and boost the renewable energy sector in the state, the Punjab government on Monday signed a memorandum of understanding (MoU) with Virgo Corporation for a Rs 630-crore bio-fuel project.

Technology will be provided for the project by the US tech-giant Honeywell International.

"Virgo will use the technology to extract bio jet fuel from rice husk to set up a rapid thermal processing plant, which will provide over 150 direct and 500 indirect jobs," a state government spokesman said here.

The MoU was signed in the presence of Chief Minister Amarinder Singh and US Ambassador to India, Kenneth I. Juster. Virgo's Managing Director Kanav Monga was also present.

The Chief Minister said the project would go a long way in containing environmental pollution due to stubble burning, besides supplementing the income of farmers by helping turn the unmanageable agro-waste into raw material for producing bio-fuel.

"Every paddy season, the state generates nearly 20 million metric tonnes of paddy straw, which would be scientifically utilised for manufacturing bio-fuel."

Ambassador Juster said the project was of critical importance as it demonstrated how collaboration towards a common vision could bring sustainable solutions and positive change.

"When companies and governments are willing to come together, share resources and expertise, and develop new and innovative approaches, the potential benefits to the society can be truly phenomenal," he said.

With air pollution levels remaining high at several places in north India, especially Delhi, authorities in Punjab are targeting to bring down stubble burning cases by 90 per cent this year.

Paddy is grown on 65 lakh acres of land in agrarian Punjab. After harvesting paddy, about 20 million tonnes of paddy straw is left in the fields to be managed by farmers before sowing the next Rabi crops.

An estimated 15 million tonnes of paddy straw is burnt by farmers for early and easy clearance of the fields, which leads to air pollution and smog over the region.