Biomass Market (Japan vs US 2025): Growth & Key Differences | Major Players - Sumitomo Corporation, Tokyo Gas, Toho Gas, Renov, JFE Engineering

Japan has aggressively expanded biomass power as part of its post-Fukushima shift toward renewables and carbon neutrality goals by 2050. Biomass provides stable, baseload-like power (unlike variable solar or wind) and fits well in a country with limited land for large-scale solar or wind farms.

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• In 2024, biomass accounted for approximately 5.9% of Japan's total electricity generation, a slight increase from 5.7% the previous year, contributing to renewables reaching about 26.7% overall (including hydro, solar, etc.).

• The 7th Strategic Energy Plan (finalized in 2025) targets renewables at 40-50% of the power mix by 2040, with biomass projected to hold steady at around 5-6%.
Japan relies heavily on imported woody biomass (e.g., wood pellets from Canada, the US, and Southeast Asia) due to limited domestic supply. Imports have grown, with concerns over sustainability, forest impacts abroad, and supply-chain emissions.

• Dedicated biomass plants and co-firing in coal plants have driven growth, supported by the Feed-in-Tariff (FiT) and Feed-in-Premium (FiP) schemes. Small-scale biomass FiT/FiP prices remained unchanged at ¥24/kWh for 2025-2026.

• Recent developments include large plants coming online, such as a 112 MW facility in Aichi Prefecture (2025) and others like 50 MW plants in Tomakomai and Gobō. The market added significant capacity in 2025, with projections for over 3 GW more by the mid-2030s, though growth may slow post-2030 amid policy shifts (e.g., excluding new large-scale woody biomass from FIT starting FY2026).

• The biomass market (power, steam, fuel) is growing, with estimates of USD 6.0 billion in 2025, heading toward USD 10.9 billion by 2034 at a 6.86% CAGR.

• Japan views biomass as essential for grid stability and regional revitalization, but debates persist over its true carbon neutrality given import emissions.

• Biomass in the United States: Diverse Uses with Stable but Declining Power Role

• The US has abundant domestic biomass resources (e.g., wood residues, agricultural waste, energy crops), making it a leader in overall bioenergy production. Biomass contributes to electricity, biofuels, heating, and more.

• In recent data (2024 baseline), biomass power generation was around 50.5 billion kWh, but projections from the EIA show a slight decline to 20.3 billion kWh in 2025 and 20.2 billion kWh in 2026, reflecting limited new capacity additions and competition from cheaper renewables like wind/solar.

• Biomass accounts for a small share of renewable electricity (2% in recent years), with capacity stable at 4.9 GW (split between wood and waste biomass).

• Broader biomass consumption is rising in some areas: wood biomass expected to increase to 1.95 quads in 2025 and 2.05 quads in 2026, while waste biomass dips slightly.

• The US has 184 dedicated solid-biomass power plants (many idled but operable), plus strong biofuel sectors (e.g., biodiesel, renewable diesel, ethanol). The Billion-Ton Report highlights potential to triple biomass production sustainably.

• Policies like the Renewable Fuel Standard drive liquid biofuels, while power generation sees less growth due to economics and incentives favoring other renewables.

• The US emphasizes domestic feedstocks and integration across sectors (e.g., densified biomass exports, heating), contrasting with Japan's import dependence.

• Biomass energy continues to evolve in both Japan and the United States, with Japan seeing robust project additions in 2025 amid policy shifts, while the US focuses on stable operations, niche innovations, and broader bioenergy applications. Sustainability debates, import reliance (Japan), and competition from other renewables persist.

Recent Projects in Japan

✅ Japan added significant capacity in 2025, with over 3 GW projected globally in biomass-to-energy but strong contributions from Japan despite potential slowdowns post-2030 due to FIT exclusions for new large-scale woody biomass starting FY2026.

✅ Sendai Port Biomass Power Plant (Miyagi Prefecture): One of Japan's largest dedicated facilities (112 MW), commenced commercial operations in November 2025. Jointly developed by Sumitomo Corporation, Tokyo Gas, Hokuriku Electric Power, and others; uses certified wood biomass for 800,000 MWh annually (powering 260,000 households).

✅ Tahara Biomass Power Plant (Aichi Prefecture): 112 MW facility started operations in 2025 (commercial commencement around April 2025), led by JFE Engineering with partners like Tokyo Century, Chubu Electric Power, and Toho Gas; primarily fueled by imported wood pellets, generating ~770 million kWh/year.

✅ Yonezawa Biomass Power Plant (Yamagata Prefecture): Became operational in December 2025, fueled mainly by woodchips; developed with involvement from Takuma.

✅ Other notable 2025 completions: 50 MW plants in Tomakomai and Gobō.
Upcoming: Hiroshima Gas's Onoura biomass plant (construction started 2025, eyeing July 2026 COD); smaller projects like a 7.1 MW woody biomass plant in Tochigi (Kansai EPCO-led, with virtual PPA to Tokyo Metro).

✅ Companies like Renova operate multiple plants (e.g., 445 MW biomass capacity by early 2026) and accelerate fuel procurement (targeting 2 million tons in FY2025-26).

Recent Projects in the United States (2025-2026 Focus)

=> US biomass power generation remains stable but projected to decline slightly (from 50.5 billion kWh in 2024 to 20.3 billion in 2025 and 20.2 billion in 2026 per EIA), due to limited new additions and competition. Focus shifts to integrated uses, BECCS potential, and repurposing.

=> 184 dedicated solid-biomass power plants operational or idled (total >6,400 MW capacity), many using wood residues, ag waste, etc.
Emerging trends: Links to wildfire risk reduction via forest thinning (e.g., California projects moving south for biomass markets); potential growth in BECCS and modular units.

=> Notable activity: Acquisitions like NewYork GreenCloud's Buena Vista facility (2025/2026) for carbon-negative AI applications; DOE funding for wood heater innovation and algal systems (up to $10M+ in 2025).

=> Broader bioenergy: Emphasis on biofuels, RNG, and untapped potential via executive actions promoting timber/bioenergy.

Mergers & Acquisitions (M&A) and Investments (2025-2026)
Japan:

🔹 Limited direct biomass M&A highlighted, but strong renewable/infrastructure activity (e.g., ENEOS's past renewable acquisitions). Policy shifts (FIT changes) prompt reappraisals; financial institutions revise woody biomass policies amid sustainability concerns.

🔹 Outbound focus: Japanese firms heavily invest in US energy (e.g., gas/LNG upstream), indirectly supporting biomass via energy security. Breakthrough Energy (Bill Gates-linked) partnered with Japan in 2025 for biomass/hydrogen acceleration.
United States:

🔹 Biomass-specific M&A quieter; examples include facility acquisitions for innovative uses (e.g., carbon-negative power).

🔹 Massive Japan-US deals: $550B investment framework (2025 agreement) targets US energy/LNG/infrastructure, with Japanese firms like Mitsubishi ($5.2B Haynesville acquisition), JAPEX ($1.3B tight oil/gas), Jera ($1.5B investment) - more gas-focused but tied to broader energy transition.

Overall investments favor diversified renewables, with biomass as a dispatchable bridge.

Key Players

Japan:

• Utilities/developers: Sumitomo Corporation, Tokyo Gas, Hokuriku Electric Power, JFE Engineering, Chubu Electric Power, Toho Gas, Renova (multiple plants, strong fuel procurement), Takuma.

• Others: Mitsubishi Heavy Industries, IHI Corporation, Japan Renewable Energy Corporation (JRE), ENEOS (renewables incl. biomass).
United States:

• Operators: Drax Group, Enviva Partners LP (pellets/supply), Covanta Energy, Engie North America, Georgia Biomass LLC.

• Others: Ameresco, DTE Biomass Energy; emerging innovators like Carba, Erg Bio; associations like American Biomass Energy Association and California Biomass Energy Alliance.

Comparison and Outlook

✦ Japan treats biomass as a core renewable for reliable power in a resource-constrained island nation, leading to higher electricity share (5-6%) despite imports and sustainability questions. The US leverages vast domestic resources for diverse applications, but biomass power is a smaller, stable-to-declining part of its massive renewable mix (dominated by wind/solar/hydro).

✦ Both face challenges: sustainability concerns (e.g., emissions from woody biomass), competition from cheaper renewables, and policy evolution. Japan continues strong additions in 2025-2026, while US power output edges down but overall bioenergy potential remains high.

✦ Biomass remains a bridge fuel in the energy transition for both regions, supporting decarbonization while addressing grid reliability.

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