Biomass Power Generation Market Size, Share, Growth & Industry Analysis, By Feedstock (Woody Biomass, Agricultural Residues, Urban Waste, Animal Manure, Industrial Waste) By Technology (Combustion, Gasification, Pyrolysis, Anaerobic Digestion, Co-Firing) By Application (Electricity Generation, Heating, CHP (Combined Heat and Power), Others) By End-User (Industrial, Residential, Commercial, Rural/Off-Grid Communities), and Regional Analysis, 2024-2031

Biomass Power Generation Market: Global Share and Growth Trajectory

The global Biomass Power Generation Market size was valued at USD 93.12 billion in 2023 and is projected to grow from USD 96.86 billion in 2024 to USD 120.28 billion by 2031, exhibiting a CAGR of 3.14% during the forecast period.

The biomass power generation market is on the rise as countries switch to renewable energy to combat climate change and reduce carbon emissions. Biomass energy from organic materials like agricultural residues, wood chips and industrial waste is a clean and sustainable alternative to fossil fuels. This energy is not only renewable but also helps in waste management and energy security making it a hot favourite in the energy transition.

As countries meet their climate goals including the Paris Agreement, biomass power has emerged as a key player in achieving net zero emissions. Unlike intermittent sources like solar and wind, biomass provides a stable and dispatchable energy supply which makes it attractive to utilities and grid operators. Europe, Asia-Pacific and North America are expanding biomass capacity driven by government policies, feed in tariffs and incentives for low carbon technologies.

Technological advancements are further fuelling the growth. Innovations in conversion techniques like gasification, anaerobic digestion and co-firing are improving efficiency and reducing emissions. Decentralised energy systems and rural electrification initiatives are opening up new opportunities for biomass deployment especially in developing regions.

According to recent industry reports, the market is expected to grow significantly over the next decade. Increasing investments in sustainable energy infrastructure and the global push for cleaner alternatives will continue to drive demand for biomass power generation. With the ability to turn waste into energy, support circular economies and provide continuous power supply, biomass is a key player in the future energy landscape. So the global biomass power generation market is set to go up in the years to come.

Key Market Trends Driving Product Adoption

Several game changing trends are driving the adoption of biomass power generation technologies:

Renewable Energy Transition

As countries aim to meet the Paris Agreement targets and go net zero, there’s a rush away from fossil fuels. Biomass power is a reliable baseload energy source unlike intermittent solar or wind energy. It’s also compatible with existing power infrastructure so it’s a transitional energy source of choice for countries looking for renewable stability.

Biomass Conversion Technology

Modern biomass power plants are no longer just about combustion. Advanced conversion technologies like gasification, pyrolysis and anaerobic digestion are improving efficiency and reducing emissions. This makes biomass energy more competitive with fossil fuels and more attractive to utilities. In August 2024, Boehringer Ingelheim opened a new biomass power plant at its Ingelheim, Germany site, which will generate around 95% of the site’s energy needs from renewable biomass and reduce COâ‚‚ emissions by ~50,000 tonnes per year and on-site emissions by 70%. The €205 million investment is part of the company’s efforts to decarbonise its operations and optimise its energy supply.

Agricultural and Industrial Waste Management

Biomass energy solves two problems – energy and waste management. As industries and farms struggle with waste disposal, converting it to energy is a sustainable and profitable option. This dual benefit is driving adoption across multiple sectors.

Decentralized Energy Systems

Rural and off-grid areas benefit most from biomass power systems. Unlike large power grids that require extensive infrastructure, biomass plants can be smaller. This makes them ideal for remote electrification especially in developing regions.

Co-Firing in Coal Plants

To reduce emissions and use existing infrastructure, many countries are co-firing biomass with coal in power plants. This not only reduces greenhouse gas emissions but also extends the life of existing plants, making biomass a cost effective interim solution.

Major Players and Their Competitive Positioning

The biomass power generation market is becoming increasingly competitive as global energy players invest in sustainable solutions. Leading companies are diversifying portfolios, forming partnerships, and integrating advanced technologies to secure market leadership.

Prominent companies include: Drax Group plc, Enviva Inc., Vattenfall AB, Ørsted A/S, Babcock & Wilcox Enterprises Inc., E.ON SE, Veolia Group, Mitsubishi Heavy Industries Ltd., Thermax Limited, General Electric Company.

These players are expanding globally through strategic collaborations, capacity enhancements, and vertical integration. Their focus on innovation and circular economy models is enhancing their competitive edge in the biomass landscape.

Consumer Behavior Analysis

The biomass power market is driven by changing consumer demand and policy trends:

• Green Energy Choices: Industrial and municipal bodies are choosing renewable energy. Biomass with low lifecycle emissions is the preference of organisations focused on sustainability and carbon neutrality.
• Economic Benefits: Biomass power infrastructure has a higher upfront cost than traditional fossil fuel systems but the long term savings are compelling. Lower fuel costs (especially when using waste feedstock), government subsidies and carbon credit incentives are driving adoption.
• Growing Demand for Distributed Generation: Consumers in rural and remote areas are looking for independent energy systems. Biomass microgrids and standalone power units are becoming popular for their reliability and environmental benefits especially in areas with poor grid connectivity.
• Increased Demand for Energy Security: Geopolitical uncertainties and fuel import dependencies are forcing nations and industries to adopt domestic energy sources. Biomass offers energy self sufficiency as most feedstocks can be sourced locally – boosting national and regional energy independence.

Pricing Trends

The cost structure of biomass power is driven by feedstock availability, plant size and technology type:

• Feedstock Costs: Feedstock costs vary depending on local agricultural output, transport and processing requirements. Waste based feedstocks (e.g. municipal solid waste or wood chips) are cheaper and often subsidised.
• Technology Cost: Technologies like direct combustion are more mature and cheaper. More advanced technologies like gasification and anaerobic digestion require more capital but offer more efficiency.
• Ongoing Operating Costs: Maintenance, labour and supply chain logistics contribute to overall cost of electricity generation. But operating costs are decreasing with automation and digital monitoring systems.

Government policies like feed in tariffs, carbon credits and renewable energy certificates are helping reduce net costs for investors and developers, making biomass more economic than ever.

Growth Factors

Several macro, environmental and technological factors are driving the biomass power market:

• Climate Policy and Carbon Rules: Governments are going big on carbon reduction. Biomass power is getting support through tax incentives, green energy credits and carbon offset programs. It’s considered carbon neutral under many frameworks.
• Renewable Portfolio Standards (RPS): Many countries have introduced RPS. Biomass is a dispatchable and reliable source to help utilities meet their RPS targets.
• Technological Advancements: Breakthroughs in thermal and biological conversion are improving efficiency, reducing waste and expanding feedstock. These innovations are lowering barriers to entry and opening up new markets.
• Industrial Applications and Co-Generation: Biomass is being used not just for power generation but also for combined heat and power (CHP) in industries. These integrated systems increase overall efficiency and create new growth opportunities.
• Rural Electrification Initiatives: International programs to electrify underserved areas are using biomass for its affordability and flexibility. Public private partnerships are making it easier to deploy scalable biomass units in rural areas.

Regulatory Landscape

The biomass power generation market operates within a complex regulatory framework that ensures environmental safety and energy efficiency:

• Environmental Permits: Biomass plants must adhere to local and international emissions standards, including limits on COâ‚‚, NOx, and particulate matter.
• Renewable Energy Mandates: Governments are offering production tax credits, investment grants, and priority grid access to biomass producers.
• Feedstock Sustainability Criteria: Regulations require biomass to come from sustainable and traceable sources, especially in the EU, to prevent deforestation and protect biodiversity.
• Waste-to-Energy Policies: Countries are increasingly viewing biomass as a viable waste management solution. This dual-use is incentivized through municipal partnerships and zero-waste initiatives.

Recent Developments

• Expansion of Biomass Infrastructure: Japan, India and Brazil are scaling up biomass projects to reduce dependence on imported fossil fuels. India has launched the National Bio Energy Mission to promote biomass energy. In September 2024, Georgia Power received government approval to add 77.9 MW of new biomass power through three PPAs, a major expansion of its renewable portfolio. This project combines woody biomass and paper mill waste feedstocks and will deliver clean, dispatchable energy under long-term contracts.
• New Technology Integrations: Companies are using AI and IoT in biomass plant operations to optimise process, predictive maintenance and emissions control. Digital twins are being used for performance modelling.
• Strategic Acquisitions: Big energy companies are buying local biomass developers to expand their renewable portfolios. Ørsted has expanded its biomass operations across Europe through acquisition growth.
• Government Backed Projects: Government backed biomass projects are rising, especially in Southeast Asia and Sub-Saharan Africa. These initiatives focus on rural electrification, employment generation, and carbon reduction.

Current and Potential Growth Implications

Demand-Supply Analysis

The biomass power market is witnessing robust demand driven by industrial decarbonization and renewable mandates. However, challenges such as feedstock supply chain inefficiencies and seasonal availability must be managed to ensure steady output.

Gap Analysis

Despite the growth, the market still faces barriers like high upfront capital, limited awareness in emerging markets, and regulatory uncertainties. Addressing these gaps through education, financial incentives, and policy clarity can unlock the market’s full potential.

Top Companies in the Biomass Power Generation Market

• Drax Group plc
• Enviva Inc.
• Vattenfall AB
• Ørsted A/S
• Babcock & Wilcox Enterprises Inc.
• Veolia Group
• E.ON SE
• Thermax Limited
• General Electric Company
• Mitsubishi Heavy Industries Ltd.

Biomass Power Generation Market: Report Snapshot

High Growth Segments

• Anaerobic Digestion: Growth is expected due to ability to convert organic waste to both electricity and biogas with low emissions.
• CHP Systems: Industrial users are adopting combined heat and power for energy efficiency and cost savings.
• Agricultural Residue Feedstock: In developing countries this segment is growing fast due to abundant crop waste and government support.

Innovations

• Gasification Units with Carbon Capture: New systems that produce cleaner energy and capture carbon are game changers.
• AI-Integrated Biomass Plants: Digital platforms help operators fine tune and maximize efficiency.
• Mobile Biomass Units: Compact, portable power units are changing energy access in remote areas.

Growth Opportunities

• Emerging Markets: Africa, Southeast Asia and Latin America are hot growth areas due to agricultural economies and growing energy demand.
• Smart Grid Integration: Biomass plants with smart metering and automation are gaining popularity for grid resilience.
• Waste-to-Energy Urban Solutions: As cities struggle with waste, biomass power is an eco-friendly disposal and energy generation solution.

Extrapolate says:

The biomass power generation market is set to grow. Countries are moving towards cleaner energy. Biomass is becoming part of the global renewable energy mix. This growth is driven by better technology, policy support and growing environmental awareness. So more regions are investing in biomass power. Looking ahead new innovations will drive further growth. These are improved feedstock use, AI powered operations and better waste-to-energy systems. Together these will deliver clean power for the future.