Biomass Power Generation Market to Grow Steadily Driven by Renewable Energy Policies

According to a new report published by Allied Market Research, the global biomass power generation market size was valued at $91.3 billion in 2023 and is projected to reach $124.5 billion by 2033, growing at a CAGR of 3.2% from 2024 to 2033. The market growth is supported by increasing focus on renewable energy generation, effective waste management practices, and supportive government policies aimed at reducing carbon emissions.

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Introduction to Biomass Power Generation

Biomass power generation refers to the process of producing electricity using organic materials such as agricultural waste, forest residues, animal waste, and municipal solid waste. These materials are converted into usable energy through technologies such as combustion, gasification, anaerobic digestion, and pyrolysis.

The biomass power generation market plays a crucial role in the global transition toward sustainable energy systems. Unlike intermittent renewable sources, biomass power offers reliable and dispatchable electricity, making it an attractive option for grid stability and base-load power generation.

Key Growth Drivers

One of the major growth drivers of the biomass power generation market is the rising demand for renewable and low-carbon electricity. Governments worldwide are setting ambitious renewable energy targets to reduce dependence on fossil fuels, and biomass power is increasingly being included as part of national energy strategies.

Effective waste management is another significant driver. Large volumes of agricultural, forestry, animal, and municipal waste are generated annually, and biomass power plants offer a sustainable solution by converting waste into energy while reducing landfill usage and methane emissions.

Supportive government incentives and policies further boost market growth. Programs such as renewable electricity subsidies, feed-in tariffs, and tax credits encourage utilities and independent power producers to invest in biomass power projects.

Additionally, the ability of biomass power plants to operate continuously provides a competitive advantage over wind and solar energy. This reliability strengthens the role of biomass in ensuring energy security, especially in regions with limited renewable alternatives.

Market Restraints

Despite favorable growth prospects, the biomass power generation market faces certain challenges. High capital investment and operational costs remain key restraints, particularly for advanced biomass technologies that require sophisticated equipment and feedstock processing systems.

Feedstock supply chain complexities also limit market expansion. Biomass resources are often region-specific, and transportation costs can significantly affect project feasibility. Seasonal availability of agricultural residues further adds to supply uncertainty.

Environmental concerns related to unsustainable biomass harvesting and land-use changes may hinder market growth. Improper sourcing of feedstock can lead to deforestation and biodiversity loss, prompting stricter regulations and public resistance.

Moreover, competition from rapidly declining solar and wind power costs may restrain biomass power deployment in regions where these alternatives are more economically attractive.

Emerging Opportunities

Technological innovation is creating new opportunities within the biomass power generation market. Advancements in gasification, pyrolysis, and anaerobic digestion technologies are improving efficiency, reducing emissions, and expanding the range of usable feedstocks.

The integration of biomass power with combined heat and power (CHP) systems offers significant growth potential. CHP systems enhance overall energy efficiency by utilizing waste heat for industrial processes or district heating.

Growing interest in decentralized and rural electrification projects also presents opportunities. Biomass power plants can be deployed close to feedstock sources, supporting local energy production and rural economic development.

In addition, increasing investments in carbon-neutral energy solutions and the development of biomass power projects with carbon capture technologies are expected to create long-term growth opportunities.

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Biomass Power Generation Market Segmentation

By Feedstock

Based on feedstock, the biomass power generation market is segmented into forest waste, agriculture waste, animal waste, and municipal waste.
Forest and agricultural waste dominate the market due to their abundant availability and established collection systems. Municipal waste-based biomass power is gaining traction as urban areas seek sustainable waste-to-energy solutions.

By Fuel

By fuel type, the market is categorized into solid, liquid, and gaseous biomass.
Solid biomass, including wood pellets and agricultural residues, holds the largest market share due to its widespread use in large-scale power plants. Liquid and gaseous fuels are witnessing steady growth, particularly in biogas and bio-oil applications.

By Technology

Based on technology, the market is segmented into combustion, gasification, anaerobic digestion, and pyrolysis.
Combustion technology dominates the biomass power generation market owing to its maturity and extensive commercial adoption.
Gasification and anaerobic digestion are expected to grow at a faster pace due to higher efficiency, lower emissions, and increasing adoption in distributed power generation systems.

By Region

Region-wise, the biomass power generation market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

North America holds a significant share of the global market, driven by strong policy support and abundant biomass resources. The U.S., with its vast agricultural landscape, generates substantial biomass from forest residues, agricultural waste, and dedicated energy crops. Programs such as the Biomass Research and Development Initiative (BRDI) and incentives like the Renewable Electricity Production Tax Credit (PTC) have played a vital role in fostering market growth.

Asia-Pacific presents a diverse and rapidly expanding landscape for biomass power generation. Countries such as China, India, and Japan are investing heavily in biomass energy to address air pollution, energy security, and growing electricity demand. China, in particular, has prioritized biomass power as part of its renewable energy strategy to reduce reliance on coal.

Europe continues to show steady growth, supported by strict emission regulations and strong emphasis on circular economy practices. LAMEA offers emerging opportunities, especially in regions with abundant agricultural residues and increasing energy demand.

Competitive Landscape

The biomass power generation market is moderately consolidated, with several global and regional players competing on technology, efficiency, and sustainability. Key market players include Ameresco, Babcock & Wilcox Enterprises, Inc., Mitsubishi Heavy Industries, Ltd., Drax Global, ENGIE, Vattenfall AB, Xcel Energy Inc., Sumitomo Corporation, Ørsted A/S, and Hurst Boiler & Welding Co., Inc.

These companies focus on expanding biomass power capacity, improving conversion technologies, and forming strategic partnerships to strengthen their global presence.

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Market Outlook

The biomass power generation market is expected to witness steady growth over the next decade as governments and utilities seek reliable renewable energy solutions. With continuous technological advancements, supportive regulatory frameworks, and increasing focus on sustainable waste management, biomass power generation is poised to remain a key contributor to the global renewable energy mix.

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Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

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