Biomass Power Market Size & Insights Report [2033]

Biomass Power Market Overview

Global Biomass Power market size is projected at USD 34193.5 million in 2024 and is expected to hit USD 46676.07 million by 2033 with a CAGR of 3.5%.

The biomass power market is experiencing increasing adoption globally, with over 3,800 operational biomass plants recorded in 2023, contributing more than 130,000 MW of installed capacity worldwide. Biomass power generation harnesses organic materials such as wood pellets, forest residues, and energy crops to produce electricity and thermal energy. In the United States, approximately 60 million tons of biomass are utilized annually for power generation, which accounts for nearly 5% of the country’s total renewable electricity production. Globally, over 24 countries have implemented subsidies and incentives to encourage biomass power usage, resulting in a total biomass electricity output of 708 TWh in 2023. Countries like Germany, with 8.3 GW installed biomass capacity, and China, with over 14.5 GW, are leading contributors to the biomass power market. In 2023, Japan added 2.4 GW worth of biomass capacity as part of its renewable transition. Biomass power market expansion is driven by regulatory mandates, particularly in the EU where biomass accounted for 58% of total renewable heat in 2023. This high demand for decarbonization has triggered the construction of over 130 new biomass facilities globally within the last two years alone.

Key Findings

Top Driver reason: Increased adoption of renewable energy mandates and government support programs promoting carbon-neutral power generation.

Top Country/Region: China leads with over 14,500 MW of installed biomass capacity, driven by agricultural and forestry residue utilization.

Top Segment: Woody biomass dominates the type segment, accounting for over 45% of total feedstock used in biomass power generation globally.

Biomass Power Market Trends

The biomass power market trends indicate a significant upsurge in infrastructure development and feedstock innovation. In 2023, over 130 new biomass power facilities were constructed globally, resulting in the addition of nearly 9,200 MW in installed capacity. Across Europe, biomass contributed to 58% of renewable heating in 2023, with over 70 million tonnes of biomass fuel consumed across the region. The trend towards co-firing of biomass with coal was evident in 18 countries, enabling the use of over 22 million tons of biomass in retrofitted plants in 2023. The growth of the wood pellet market supports this trend, with global wood pellet production exceeding 38 million metric tons in 2023, 63% of which was directed to biomass power plants.

Moreover, the growing deployment of advanced gasification technologies has led to the construction of over 42 biomass gasification plants worldwide, with each facility averaging 15 MW capacity. Asia-Pacific saw a 17% increase in biomass plant startups in 2023, primarily in Indonesia and Thailand. The biomass power market has witnessed increased public-private partnerships, with 60 collaborative projects recorded in 2023 alone. Distributed biomass power systems gained popularity, especially in remote African regions where 500 decentralized biomass units were commissioned in 2023, each serving up to 1,200 households. The overall trend emphasizes investment in hybrid systems that integrate solar-biomass technologies, of which 92 pilot projects were launched globally.

Biomass Power Market Dynamics

DRIVER

Increasing demand for renewable and carbon-neutral energy sources.

The biomass power market is driven primarily by global initiatives to reduce carbon emissions, where more than 196 nations agreed under the Paris Agreement to transition towards sustainable energy. In 2023 alone, more than 43 countries implemented new bioenergy mandates. The EU invested €11.6 billion in biomass infrastructure, directly supporting the creation of 14,000 jobs. The United States Department of Energy allocated $600 million to support 20 large-scale biomass projects in 2023. These incentives, combined with increasing coal plant retirements—over 70 facilities in the last 5 years—have led to higher biomass co-firing. The conversion of the UK’s Drax Power Station to 100% biomass resulted in a 12 million tonne reduction in annual carbon emissions, showcasing how biomass fulfills dual roles in energy generation and emissions mitigation.

RESTRAINT

Limited feedstock availability and logistic inefficiencies.

Despite growing demand, biomass power development is often hindered by regional shortages of sustainable feedstock. In 2023, 16 countries reported biomass fuel deficits, collectively amounting to a 4.2 million tonne shortfall. Additionally, transportation of biomass materials involves high logistics costs, with feedstock transport accounting for up to 38% of operational costs for small biomass plants. In Brazil, approximately 30% of planned biomass power projects were delayed due to feedstock procurement issues. Furthermore, quality degradation in biomass during storage, which leads to energy content loss of 12-18% after six months, further discourages investment in long-term storage infrastructure. Feedstock competition with biofuel sectors also reduces availability for power production.

OPPORTUNITY

Integration of biomass with hybrid renewable energy grids.

The biomass power market presents massive opportunities through integration with solar, wind, and storage solutions. In 2023, over 90 hybrid renewable projects that included biomass were announced. India initiated 12 solar-biomass microgrid projects in rural states, each delivering 1.2 MW of reliable electricity to underserved areas. The African Renewable Energy Initiative endorsed a plan to deploy 3,000 MW of hybrid biomass systems by 2030. These integrated models not only optimize energy supply but also reduce dependence on a single source. Advancements in biomass-to-hydrogen technology also promise to boost market potential, with pilot units in South Korea generating 30 kg of hydrogen daily from agricultural residue gasification.

CHALLENGE

High capital cost of biomass power plant development.

Biomass power infrastructure demands significant capital investment, often 40-50% higher than equivalent solar PV or wind installations. On average, building a 50 MW biomass plant requires investment exceeding $180 million due to equipment costs and feedstock processing facilities. In 2023, over 25 projects globally were suspended due to financial constraints. Operating and maintenance expenses, including feedstock handling, contribute an additional 25-30% of lifecycle costs. Regulatory uncertainty also adds financial risk; for instance, five projects in Southeast Asia were canceled after subsidy programs were halted. The need for emissions control technologies such as scrubbers and filters further inflates costs, adding $2 million to $3 million per facility.

Biomass Power Market Segmentation

The biomass power market is segmented based on type and application. The primary types include urban residue, biogas, agriculture & forest residues, energy crop, woody biomass, and landfill gas feedstock. Application segmentation includes the paper industry, forest industry, panel board makers, and the pulp industry. Each segment contributes uniquely to the biomass ecosystem, leveraging specific feedstock types and industrial processes to generate renewable power.

By Type

Urban Residue: Urban residue accounts for approximately 7% of global biomass power generation, with 19 million tonnes processed annually through municipal waste-to-energy plants. In countries like Japan, 1,600 urban waste incinerators support power output through residue combustion.
Biogas: Biogas from anaerobic digestion contributes to 15% of biomass electricity globally. Europe leads in biogas utilization with over 19,000 biogas plants operating in 2023, generating 62 TWh of electricity from organic waste materials.
Agriculture & Forest Residues: Agricultural and forest residues provide over 32% of total biomass power input, with India alone utilizing 120 million tons of crop residue annually. The U.S. processes 50 million dry tons of forestry by-products each year.
Energy Crop: Energy crops like switchgrass and miscanthus contribute approximately 9% of biomass energy. Over 180,000 hectares were dedicated to energy crops in the EU in 2023, producing nearly 4 million tonnes of biomass.
Woody Biomass: Woody biomass is the largest segment with 45% market share. In Canada, over 35 million tonnes of wood chips and pellets were used in biomass plants in 2023.
Landfill Gas Feedstock: Landfill gas systems captured and utilized 10 billion cubic meters of methane globally in 2023, equivalent to 200 TWh in power generation. The U.S. alone has 565 landfill gas-to-energy sites.

By Application

Paper Industry: The paper industry uses 25 million tonnes of biomass annually, especially black liquor and bark residues, powering more than 150 industrial cogeneration units globally.
Forest Industry: In 2023, over 140 forest mills integrated biomass boilers to generate electricity from sawmill waste, consuming 18 million tonnes of biomass.
Panel Board Makers: Oriented strand board and particleboard factories used over 6 million tonnes of biomass in 2023 to supply energy for drying and press operations.
Pulp Industry: The pulp industry burned over 34 million tonnes of black liquor in 2023, generating around 55 TWh of energy worldwide. Countries like Sweden and Finland rely heavily on biomass-fired recovery boilers in pulp manufacturing.

Biomass Power Market Regional Outlook

The biomass power market exhibits strong regional variations, with capacity distribution shaped by feedstock availability, regulatory frameworks, and technological integration.

North America

North America recorded over 20,000 MW of biomass capacity in 2023, led by the U.S. with 16,500 MW and Canada with 3,800 MW. The region processed over 70 million tonnes of biomass, largely from forestry operations and landfill gas. More than 580 active facilities across North America are fueled by forest residues, with 140 units upgraded in 2023 to adopt high-efficiency gasification systems.

Europe

Europe remains a global biomass power leader, with over 42,000 MW installed across 27 countries. Germany, France, and the UK contributed 63% of Europe’s biomass electricity in 2023. More than 74 million tonnes of biomass were consumed, 48% of which came from woody sources. The region has over 1,000 CHP plants running on biomass, with 230 newly commissioned in 2023.

Asia-Pacific

Asia-Pacific added 4,800 MW of new biomass capacity in 2023, bringing the regional total to over 26,000 MW. China leads with 14,500 MW, followed by India at 10,200 MW. The region processed 180 million tonnes of biomass, with agricultural waste forming 65% of the feedstock. Japan deployed 37 new commercial biomass units in 2023.

Middle East & Africa

The Middle East & Africa recorded 3,600 MW of biomass capacity in 2023, with South Africa, Egypt, and Nigeria accounting for over 70% of installations. More than 90 decentralized biomass plants were set up in off-grid regions, each serving between 800–1,200 households. The region processed 5.5 million tonnes of crop residue and municipal waste for electricity generation.

List of Top Biomass Power Market Companies

DONG Energy A/S
Wilcox Company
Forth Energy Ltd.
Ameresco Inc.
Drax Group plc Co.
Enviva LP
MGT Ltd.
Alstom SA
Helius Energy Plc.
Vattenfall AB
The Babcock & Wilcox Company

Top 2 Companies with Highest Share

Drax Group plc Co.: Operates over 3,900 MW of biomass capacity, with 8 million tonnes of biomass pellets consumed in 2023.

Enviva LP: Supplied 6.2 million tonnes of biomass pellets globally in 2023, supporting utilities across North America and Europe.

Investment Analysis and Opportunities

In 2023, global investments in biomass power projects exceeded $32 billion, with over 210 large-scale projects either approved or under development. Europe alone contributed over $11.6 billion to new biomass projects, primarily in Germany, the UK, and Sweden. More than 14,000 jobs were created as a direct result of biomass power infrastructure expansion across 23 countries. The Asian Development Bank financed $800 million in biomass projects across Southeast Asia, funding more than 1,500 MW in new generation capacity.

In North America, over $3.5 billion in new capital flowed into biomass upgrades and expansions. The U.S. Department of Agriculture disbursed $200 million in grants for community-scale biomass installations in rural regions. Canada announced a new program worth $600 million over five years, targeting waste wood recovery and energy conversion. In India, over 95 biomass projects received funding totaling ₹3,000 crore in 2023, translating to more than 2,000 MW of additional capacity.

Emerging markets like Nigeria and Kenya launched $240 million worth of biomass rural electrification programs. Private sector involvement also surged, with 18 new companies entering the biomass supply chain sector. Investment in research and development hit $1.3 billion globally, with over 270 patents filed related to biomass combustion and feedstock enhancement technologies. The integration of biomass in green hydrogen and synthetic fuel projects is expected to attract more than $5 billion in combined investments by 2026, with 15 pilot projects already underway.

New Product Development

Innovation in the biomass power market has accelerated, especially in gasification, pellet production, and hybrid integration. In 2023, over 45 new product lines were introduced in the biomass boiler segment alone. Leading companies launched high-efficiency gasification units with thermal efficiency reaching up to 92%. A Japanese manufacturer unveiled a modular biomass-to-electricity system with 1.2 MW capacity, deployable in under 60 days.

Enviva LP introduced a new line of engineered wood pellets with 5% higher energy density and 8% lower ash content, improving combustion performance in co-fired plants. Drax Group implemented a proprietary pellet drying system, reducing moisture content by 4%, thereby enhancing calorific value to over 18.4 MJ/kg. Alstom developed a biomass turbine retrofitting solution capable of converting coal-fired systems within 180 days, reducing conversion downtime by 30%.

Automation in biomass feed handling advanced with robotic feeders that reduced labor by 28% and improved consistency of feed delivery by 15%. Sensor-integrated combustion chambers were introduced to optimize burn rates, leading to 10% higher power yield per ton of biomass. Additionally, bio-oil derived from fast pyrolysis gained traction with 12 industrial-scale trials conducted in 2023, producing over 9 million liters of renewable oil. More than 20 biomass-to-liquid fuel conversion plants began operations across the U.S. and Europe, each producing an average of 25,000 liters per day.

Five Recent Developments

Drax Group plc Co.: completed its fourth unit conversion to biomass at its UK facility in September 2023, increasing its biomass-fired generation capacity to over 3,900 MW.
Enviva LP: announced in January 2024 the commissioning of its 13th wood pellet production facility in Mississippi, with an annual capacity of 1.1 million metric tons.
Ameresco Inc.: launched a $150 million biomass gasification project in California in March 2024, which will process over 480,000 tons of agricultural waste annually.
Vattenfall AB: signed a 10-year biomass fuel supply agreement with a forestry group in Finland in August 2023, ensuring 2.5 million tons of feedstock annually for their northern plants.
Wilcox Company: introduced an ultra-low emissions biomass boiler in December 2023, achieving nitrogen oxide emissions below 30 ppm during commercial trials.

Report Coverage of Biomass Power Market

The biomass power market report provides comprehensive coverage across generation capacity, feedstock sources, applications, technologies, and regional deployment. Over 3,800 operational biomass power plants worldwide were assessed, with detailed analysis across more than 50 countries. The report examines over 120 types of feedstocks including agricultural residue, urban waste, woody biomass, and biogas sources, analyzing their combustion efficiencies, calorific values, and regional availability.

In terms of technology, the report includes coverage on direct combustion, gasification, anaerobic digestion, co-firing, and pyrolysis, with detailed metrics on thermal efficiency, emission profiles, and energy conversion ratios. The market applications are reviewed across industrial sectors including pulp, paper, forest processing, municipal power utilities, and off-grid rural systems, supported by usage data and capacity deployment records.

The report evaluates policy impacts from more than 30 national subsidy frameworks, investment incentives, and renewable portfolio standards that directly influence biomass project feasibility. Over 210 ongoing and upcoming investment projects were profiled with insights on project size, commissioning timelines, and expected power output. Additionally, the report highlights over 45 biomass technology providers and developers, giving readers insights into product offerings, innovations, and supply chain positioning.