The Punjab State Power Corporation Limited (PSPCL) has deposited half of a Rs48.6 mn environmental penalty imposed by the Commission for Air Quality Management (CAQM) over alleged non-compliance with biomass co-firing norms at the Guru Hargobind Thermal Power Plant in Lehra Mohabbat, Bathinda. The corporation has also approached the National Green Tribunal (NGT) challenging the CAQM order and seeking relief on the balance of the penalty. The CAQM imposed the environmental compensation on April one, 2026 after the Bathinda plant was found to have failed to meet mandatory biomass co-firing targets. Under the norms, thermal power plants must use a specified percentage of biomass pellets made from agricultural residues, wood waste or crop stubble alongside coal to curb air pollution. The requirement is intended to reduce particulate emissions and limit seasonal smog in agricultural belts. In an additional affidavit filed before the tribunal, PSPCL stated that it deposited Rs24.3 mn as a bona fide measure and without prejudice to its legal rights, and that the payment did not constitute an admission of guilt. The corporation said the deposit followed interim orders in similar matters where the tribunal required payment of half the penalty as a condition for a stay on recovery. PSPCL placed proof of the deposit and renewed communication to the CAQM in letters dated July one and July 13. The matter is listed for hearing before the NGT on July 27 and the tribunal will determine whether the penalty order should be set aside. The case highlights tensions between regulatory enforcement and operational challenges faced by coal-fired stations required to adopt biomass co-firing. The outcome may shape how compensation orders and interim relief are applied in comparable disputes.