Biomass Power Generation Market Grows at 9.42% CAGR, Hitting USD 130.31 Billion

The global Biomass Power Generation Market is expanding steadily as countries accelerate their transition toward renewable energy sources and sustainable power infrastructure. As per MRFR analysis, the Biomass Power Generation Market was valued at USD 48.4 billion in 2024. The industry is projected to grow from USD 52.96 billion in 2025 to USD 130.31 billion by 2035, registering a compound annual growth rate (CAGR) of 9.42% during the forecast period from 2025 to 2035. This growth reflects increasing investments in clean energy technologies, rising environmental awareness, and supportive government policies promoting low-carbon electricity generation worldwide.

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Market Driver

One of the primary drivers of the biomass power generation market is the global push toward decarbonization and climate change mitigation. Governments across regions are implementing strict carbon reduction targets and renewable energy mandates. Biomass power generation plays a crucial role in reducing greenhouse gas emissions by utilizing organic waste materials such as agricultural residues, forestry waste, municipal solid waste, and dedicated energy crops.

The increasing demand for renewable and reliable baseload power is another major factor supporting market growth. Unlike some intermittent renewable sources such as solar and wind, biomass power plants can generate electricity continuously, providing stable energy supply to the grid. This makes biomass a valuable complement to other renewable technologies.

Rising concerns about waste management and environmental pollution also contribute significantly to market expansion. Biomass power generation helps convert waste into useful energy, reducing landfill usage and promoting sustainable waste disposal practices. This dual benefit of energy production and waste reduction enhances its appeal.

Additionally, growing investments in rural electrification projects are driving demand for biomass-based energy solutions. In many developing regions, biomass resources are abundant, making it a cost-effective and accessible energy source for decentralized power generation.

Government incentives, including subsidies, feed-in tariffs, renewable energy certificates, and tax benefits, further encourage biomass plant development. These policies aim to diversify energy portfolios and reduce dependence on fossil fuels.

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Technology Advancement

Technological advancements are significantly improving the efficiency, sustainability, and scalability of biomass power generation systems. Modern biomass plants incorporate advanced combustion technologies that optimize fuel utilization and enhance energy conversion efficiency.

One major innovation is the development of advanced gasification systems. Biomass gasification converts organic materials into syngas, which can be used to generate electricity or produce biofuels. This process improves efficiency and reduces emissions compared to traditional combustion methods.

Combined heat and power (CHP) systems are also gaining popularity in biomass applications. CHP technology enables simultaneous production of electricity and useful thermal energy, maximizing overall system efficiency. These systems are widely used in industrial facilities, district heating networks, and commercial complexes.

Automation and digital monitoring technologies are transforming biomass plant operations. Advanced sensors and control systems allow real-time monitoring of fuel quality, combustion efficiency, and emission levels. This enhances operational performance and ensures regulatory compliance.

Improved feedstock processing technologies are also contributing to market growth. Pre-treatment methods such as pelletization and briquetting improve fuel consistency and combustion efficiency. Standardized biomass fuels enhance plant performance and reduce maintenance requirements.

Carbon capture and storage (CCS) integration with biomass plants is emerging as a promising technology. Biomass with carbon capture can achieve negative emissions, making it a critical solution in achieving long-term climate goals.

Additionally, advancements in boiler design and turbine efficiency have enhanced overall plant productivity. Modern equipment offers higher reliability, reduced downtime, and improved energy output.

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Regional Insights

Regionally, Europe dominates the biomass power generation market due to strong renewable energy policies and sustainability commitments. Countries such as Germany, the United Kingdom, Sweden, Finland, and Denmark have well-established biomass energy infrastructure. The European Union's renewable energy directives and carbon neutrality goals continue to drive significant investments in biomass projects.

North America represents a substantial market, with the United States and Canada leading biomass adoption. The region benefits from abundant forestry resources and agricultural residues, which serve as key feedstocks. Supportive federal and state-level incentives further encourage biomass power development.

Asia-Pacific is expected to witness significant growth during the forecast period. Rapid industrialization, increasing energy demand, and abundant biomass resources in countries such as China, India, Japan, and Southeast Asian nations are driving expansion. Governments in the region are promoting renewable energy diversification to enhance energy security and reduce emissions.

In China, biomass power plants are increasingly integrated into waste management systems. India is also investing in agricultural residue-based biomass projects to address crop waste challenges and support rural electrification.

Latin America is gradually expanding its biomass energy capacity, particularly in Brazil. The country's strong agricultural sector provides ample biomass feedstock, supporting large-scale bioenergy production.

The Middle East and Africa region is also emerging as a potential market. Although fossil fuels dominate energy production, growing interest in renewable diversification and waste-to-energy solutions is encouraging biomass adoption in select countries.

Market Trends

Several key trends are shaping the biomass power generation market. One prominent trend is the increasing integration of biomass plants with combined heat and power systems to improve overall efficiency.

Another important trend is the rising adoption of advanced gasification technologies for cleaner and more efficient energy production. These systems reduce emissions and enhance fuel flexibility.

The development of sustainable supply chains for biomass feedstock is also gaining importance. Companies are focusing on reliable sourcing strategies to ensure consistent fuel availability and cost stability.

Additionally, the integration of digital technologies and automation is improving plant performance and operational efficiency. Data-driven monitoring and predictive maintenance are becoming standard practices.

The growing interest in carbon-negative energy solutions is another significant trend. Biomass combined with carbon capture technologies offers potential for reducing atmospheric carbon levels, making it an attractive long-term solution.

Outlook

The biomass power generation market is poised for steady growth over the forecast period, driven by increasing renewable energy adoption, supportive government policies, and technological advancements. Its ability to provide reliable baseload power, support waste management, and contribute to carbon reduction makes it a critical component of global energy strategies. With strong regional contributions from Europe, North America, and Asia-Pacific, and continuous innovation in combustion, gasification, and digital monitoring technologies, biomass power generation is expected to play an essential role in achieving sustainable and low-carbon energy systems worldwide.

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