Biomass Power Market Size, Share & Trends Analysis Report By Feedstock (Solid Biofuel, Liquid Biofuel), By Technology (Combustion, Gasification), By Region (North America, EU, APAC)- Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2024-2033

The global biomass power market size was exhibited at USD 121,340.78 million in 2023 and is projected to hit around USD 223,531.86 million by 2033, growing at a CAGR of 6.3% during the forecast period of 2024 to 2033.

Key Takeaways:

• Europe was the largest regional market in 2023 and accounted for a revenue share of more than 40.0%.
• In terms of revenue, the combustion segment dominated the market in 2023 and accounted for the maximum share of more than 88.0% of global revenue. 
• In terms of revenue, the solid biofuel segment accounted for the maximum revenue share of 88.0% in 2023.

Biomass Power Market: Overview 

In recent years, the global energy landscape has witnessed a significant shift towards sustainable and renewable sources. Among these, biomass power has emerged as a promising contender, offering a renewable energy solution with the potential to mitigate carbon emissions and reduce dependence on fossil fuels. This overview delves into the dynamics of the biomass power market, providing insights into its growth trajectory, key drivers, challenges, and future prospects.

Biomass Power Market Groth

The growth of the biomass power market is fueled by several key factors. Firstly, increasing global awareness and concern about climate change have driven a shift towards renewable energy sources, including biomass power, as a means to reduce carbon emissions and mitigate environmental impact. Additionally, supportive government policies, incentives, and subsidies have incentivized investments in biomass power projects, creating a conducive environment for market expansion. Moreover, biomass power offers enhanced energy security by diversifying the energy mix and reducing reliance on fossil fuels, thus bolstering its attractiveness as a sustainable energy solution. Furthermore, continuous advancements in biomass conversion technologies have improved efficiency and lowered costs, making biomass power more competitive in the energy market. Lastly, biomass power presents an opportunity to address waste management challenges by converting organic waste materials into valuable energy resources, further driving market growth.

Biomass Power Market Report Scope

Biomass Power Market Dynamics

• Environmental Concerns and Regulatory Support:

The dynamics of the biomass power market are intricately tied to growing environmental concerns and supportive regulatory frameworks. With increasing awareness about climate change and the urgent need to reduce greenhouse gas emissions, biomass power has emerged as a viable solution to meet sustainability goals. Governments worldwide have implemented policies, incentives, and subsidies to promote the development and deployment of biomass power projects. These supportive measures include renewable energy targets, feed-in tariffs, tax incentives, and renewable energy credits, which have incentivized investments in biomass power infrastructure.

• Technological Advancements and Cost Competitiveness:

Another significant dynamic shaping the biomass power market is continuous technological advancements and improving cost competitiveness. Over the years, significant strides have been made in biomass conversion technologies, such as combustion, gasification, pyrolysis, and anaerobic digestion, enhancing efficiency and performance. These technological innovations have resulted in higher biomass-to-energy conversion rates, improved operational flexibility, and reduced emissions, making biomass power more attractive from both environmental and economic perspectives. Additionally, economies of scale, research and development investments, and process optimization have contributed to lowering the overall cost of biomass power generation, narrowing the gap with conventional energy sources. As a result, biomass power has become increasingly competitive in energy markets, attracting investment interest from utilities, independent power producers, and renewable energy developers.

Biomass Power Market Restraint

• Feedstock Availability and Logistics Challenges:

One of the primary restraints affecting the biomass power market is the availability and logistics challenges associated with biomass feedstock. While biomass resources such as wood, agricultural residues, and organic waste hold significant potential for energy production, their availability and supply can be inconsistent and geographically dispersed. Moreover, competition for biomass feedstock from other sectors such as food, feed, and materials industries can further exacerbate supply constraints. Additionally, the logistics of sourcing, transporting, and storing biomass feedstock pose logistical challenges, particularly for large-scale biomass power plants located far from biomass sources. These logistical complexities can increase operational costs, reduce plant efficiency, and limit the scalability of biomass power projects, thereby impeding market growth.

• Technological Limitations and Conversion Efficiency:

Another significant restraint facing the biomass power market relates to technological limitations and conversion efficiency issues. While advancements in biomass conversion technologies have improved overall efficiency and performance, challenges remain in achieving optimal conversion rates and energy output. Factors such as feedstock characteristics, biomass composition, and operating conditions can impact the efficiency of biomass-to-energy conversion processes, leading to suboptimal performance and energy losses. Additionally, certain biomass conversion technologies, such as gasification and pyrolysis, require precise control and sophisticated equipment, which can increase capital costs and operational complexities. Moreover, variability in feedstock quality and moisture content can affect combustion efficiency and emissions control, further limiting the overall efficiency of biomass power plants.

Biomass Power Market Opportunity

• Circular Economy Integration and Waste Management Solutions:

An exciting opportunity within the biomass power market lies in its integration with the circular economy principles and waste management solutions. Biomass power plants have the unique ability to convert organic waste materials, such as agricultural residues, forestry residues, and municipal solid waste, into valuable energy resources, thereby addressing waste management challenges and promoting resource efficiency. By leveraging biomass power generation as a means to valorize organic waste streams, stakeholders can create closed-loop systems where waste materials are transformed into renewable energy, biofuels, and bioproducts. This integration not only reduces the environmental burden of waste disposal but also contributes to the diversification of energy sources and the creation of new revenue streams. 

• Biomass Co-firing and Combined Heat and Power (CHP) Applications:

Another promising opportunity in the biomass power market lies in the expansion of biomass co-firing and combined heat and power (CHP) applications. Biomass co-firing involves the combustion of biomass alongside coal or other fossil fuels in existing power plants, allowing for the utilization of existing infrastructure while reducing greenhouse gas emissions and dependence on fossil fuels. This approach offers a cost-effective and scalable pathway for integrating biomass into the energy mix, particularly in regions with abundant biomass resources and coal-fired power plants. Furthermore, combined heat and power (CHP) systems enable the simultaneous generation of electricity and useful heat from biomass feedstocks, maximizing energy efficiency and reducing overall energy costs. Biomass CHP applications are well-suited for industrial facilities, district heating networks, and community-scale energy projects, providing localized energy solutions and supporting sustainable development objectives. 

Biomass Power Market Challenges

• Feedstock Availability and Sustainability:

One of the primary challenges facing the biomass power market is ensuring consistent and sustainable feedstock availability. Biomass feedstocks, such as wood residues, agricultural residues, and energy crops, are subject to fluctuations in availability due to factors such as seasonal variability, land use competition, and biomass supply chain constraints. Additionally, sourcing biomass feedstocks in a sustainable manner presents challenges related to land use, biodiversity conservation, and ecosystem impacts. Without proper management and regulation, biomass harvesting and procurement practices can lead to deforestation, soil degradation, and habitat loss, undermining the environmental benefits of biomass power generation. Furthermore, competition for biomass feedstocks from other sectors, such as biofuels production and livestock feed, can exacerbate feedstock availability challenges, driving up costs and limiting biomass power plant operations. 

• Technological Complexity and Efficiency:

Another significant challenge in the biomass power market is the technological complexity and efficiency of biomass conversion processes. While biomass power plants utilize various conversion technologies, such as combustion, gasification, and anaerobic digestion, each technology has its unique requirements, operating parameters, and efficiency limitations. Achieving optimal performance and efficiency in biomass conversion processes requires precise control of factors such as feedstock characteristics, moisture content, and combustion conditions, which can be challenging to achieve consistently. Moreover, certain biomass conversion technologies, such as gasification and pyrolysis, require sophisticated equipment and expertise, increasing capital costs and operational complexities.

Segments Insights:

Technology Insights

On the basis of technologies, the global market for biomass power has been further categorized into combustion, gasification, and anaerobic digestion. In terms of revenue, the combustion segment dominated the market in 2023 and accounted for the maximum share of more than 88.0% of the global revenue. The trend is expected to continue in the future with the segment registering a steady growth rate over the forecast period. Biomass feedstock is directly combusted in a furnace with air, to convert water into steam. The produced steam is used to drive a steam turbine to generate electricity.

The combustion technology has a non-complex operation and operates at a lesser cost compared to other advanced biomass power technologies. This is expected to drive the demand for combustion technology in the market over other available technologies. Biomass power can be used for power generation, lighting, heating, and cooking gas applications. These factors are expected to boost the growth of the anaerobic digestion technology segment over the forecast period. However, the gasification technology segment is estimated to register the fastest CAGR over the forecast period.

Feedstock Insights

On the basis of feedstock, the global market has been further segmented into solid biofuel, liquid biofuel, and biogas. In terms of revenue, the solid biofuel segment accounted for the maximum revenue share of 88.0% in 2023. The segment will expand further at a steady CAGR retaining its leading position throughout the forecast period. The easy availability and low cost of solid biofuelshave resulted in their higher adoption over liquid biofuels and biogas for power generation applications. On the other hand, the liquid biofuel segment is projected to record the fastest growth rate during the forecast period.

The biogas segment accounted for the second-largest market share, in terms of revenue, in 2023 owing to its higher calorific value and ability to be produced and utilized in remote areas. The segment is expected to grow at a steady growth rate during the forecast period. Biogas is majorly composed of methane and carbon dioxide, which is produced by the process of anaerobic digestion and it can be also produced through the thermal process of solid biofuel. Biomass power can be utilized for various applications, such as power generation, heating, and cooking.

Regional Insights

Europe was the largest regional market in 2023 and accounted for a revenue share of more than 40.0%. The European Union, in its long-term strategy, has aimed to be carbon-neutral by 2050. This objective is in line with the European Union’s commitments as part of the Paris Agreement. According to the European Green Deal, the European Commission in March 2020 has passed the first-ever European Climate Law to achieve its 2050 climate-neutrality goal. Furthermore, the European Union member countries are required to develop and implement national long-term strategies to achieve their commitments as per the Paris Agreement.

North America also accounted for a significant share of the global market revenue in 2023. The demand for biomass power across North America is primarily driven by the U.S. and Canada. The North America region is majorly dependent on coal for power generation. The recent discovery of shale gas reserves in the region has resulted in gas-based power generation, which is gaining higher growth over coal-based power generation. On the other hand, the market in Asia Pacific is estimated to register the fastest growth rate over the forecast period.

Some of the prominent players in the biomass power market include:

Mitsubishi Heavy Industries, Ltd.

Suez

Xcel Energy Inc.

Ramboll Group A/S

Babcock & Wilcox Enterprises, Inc.

Orsted A/S

Ameresco

General Electric

Veolia

Vattenfall

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the global biomass power market.

Technology

• Combustion
• Gasification
• Anaerobic Digestion

Feedstock

• Solid Biofuel
• Liquid Biofuel
• Biogas

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)