Biomass Power Generation Market to Reach USD 136.2 Billion by 2035, Driven by Renewable Energy Targets and Sustainable Feedstock Utilization

The global Biomass Power Generation Market (https://www.transparencymarketresearch.com/biomass-power-generation-market.html) is gaining steady momentum as countries accelerate their transition toward renewable energy while strengthening energy security and reducing greenhouse gas emissions. Biomass has emerged as one of the most reliable renewable power sources due to its ability to provide continuous baseload electricity, complementing intermittent renewable sources such as solar and wind power.

According to the latest market analysis, the Biomass Power Generation Market was valued at US$ 94.8 Billion in 2024 and is projected to reach US$ 136.2 Billion by 2035, expanding at a CAGR of 3.4% from 2025 to 2035.

The growing emphasis on decarbonization, increasing utilization of agricultural and forestry residues, supportive government policies, and rising investments in bioenergy infrastructure are key factors driving market growth. Biomass power plants enable efficient utilization of organic waste materials, helping countries reduce landfill waste, minimize open-field burning, and lower carbon emissions while producing reliable electricity and heat.

The expanding adoption of biomass-fired combined heat and power (CHP) systems, waste-to-energy facilities, and advanced biomass conversion technologies is expected to create significant opportunities for market participants throughout the forecast period.

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Rising Renewable Energy Targets Drive Market Growth

Global commitments toward carbon neutrality and clean energy transition are among the strongest growth drivers for the Biomass Power Generation Market.

Governments across developed and emerging economies continue introducing ambitious renewable energy targets aimed at reducing dependence on fossil fuels and improving long-term energy security. Biomass power generation plays a vital role in achieving these objectives by providing dispatchable renewable electricity capable of operating continuously regardless of weather conditions.

Unlike solar and wind energy, biomass power plants generate stable baseload electricity that supports grid reliability while balancing fluctuations in renewable energy supply.

Various policy initiatives including renewable portfolio standards, feed-in tariffs, carbon pricing mechanisms, renewable energy certificates, tax incentives, and government subsidies continue encouraging utilities and industrial users to invest in biomass energy projects.

As nations strengthen climate commitments and accelerate decarbonization strategies, biomass is expected to remain an essential component of diversified renewable energy portfolios.

Abundant Agricultural and Forestry Residues Support Market Expansion

The widespread availability of agricultural and forestry biomass feedstocks continues supporting strong market development.

Every year, enormous quantities of agricultural residues, forestry by-products, wood waste, municipal solid waste, energy crops, animal manure, and industrial organic waste are generated globally. Much of this material remains underutilized or is disposed of through environmentally harmful practices such as open burning or landfilling.

Biomass power generation transforms these waste materials into valuable renewable energy while supporting circular economy principles.

Agricultural residues including rice husks, wheat straw, sugarcane bagasse, corn stalks, and coconut shells provide abundant feedstock for biomass plants, particularly in agricultural economies.

Similarly, forestry residues including wood chips, sawdust, bark, logging residues, and wood pellets continue serving as important renewable fuel sources in North America and Europe.

The ability to convert locally available biomass resources into electricity reduces waste management challenges while creating additional income opportunities for agricultural and forestry sectors.

Increasing investments in biomass supply chains, pellet manufacturing facilities, and feedstock logistics are expected to further strengthen long-term market growth.

Biomass Provides Reliable Baseload Renewable Energy

One of the key advantages of biomass power generation is its ability to deliver continuous and dispatchable electricity.

Unlike solar photovoltaic and wind power systems, whose output depends on weather conditions, biomass power plants operate around the clock using stored fuel supplies.

This operational reliability makes biomass an attractive renewable energy source for utilities, industrial facilities, and district heating networks that require uninterrupted electricity and thermal energy.

Biomass-fired combined heat and power (CHP) plants further improve overall energy efficiency by simultaneously producing electricity and useful heat for industrial operations, commercial facilities, and residential heating systems.

The integration of biomass into national electricity grids enhances grid stability while supporting increasing penetration of intermittent renewable energy sources.

As electricity systems continue incorporating larger shares of solar and wind generation, biomass will play an increasingly important balancing role within modern power infrastructure.

Government Policies and Carbon Markets Create New Opportunities

Supportive government regulations continue creating favorable conditions for biomass power investments.

Many countries have introduced renewable energy incentives, emissions reduction targets, biomass sustainability standards, and carbon credit mechanisms that improve project economics.

Carbon markets further enhance biomass competitiveness by rewarding low-carbon electricity generation and carbon removal technologies.

Bioenergy with Carbon Capture and Storage (BECCS) has emerged as one of the most promising technologies capable of generating renewable electricity while removing carbon dioxide from the atmosphere.

Governments increasingly recognize BECCS as an important solution for achieving net-zero emissions, creating substantial opportunities for biomass power producers.

Growing investments in carbon capture infrastructure, green hydrogen production, sustainable aviation fuels, and bio-based industrial processes are expected to further expand biomass utilization beyond conventional electricity generation.

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Industrial Sector Remains the Largest End-use Segment

Based on end use, the Industrial segment accounted for approximately 48% of the global Biomass Power Generation Market in 2024.

Industrial facilities require large quantities of reliable electricity and process heat, making biomass an attractive alternative to conventional fossil fuels.

Industries including sugar processing, pulp and paper, food processing, chemicals, cement, textiles, and wood products increasingly utilize biomass-fired power plants to improve energy security while reducing greenhouse gas emissions.

Sugar mills extensively utilize bagasse generated during sugar production to produce electricity for internal consumption while exporting surplus power to national grids.

Similarly, pulp and paper manufacturers utilize wood residues and black liquor to generate renewable electricity and steam for manufacturing operations.

Industrial biomass systems offer long-term operational savings while improving sustainability performance and supporting corporate environmental commitments.

Growing industrial decarbonization initiatives are expected to sustain strong demand for biomass energy solutions throughout the forecast period.

Europe Leads the Global Biomass Power Generation Market

Europe accounted for nearly 40% of global Biomass Power Generation Market capacity in 2024, making it the largest regional market.

The region benefits from comprehensive renewable energy policies, advanced district heating infrastructure, strong waste-to-energy capabilities, and ambitious carbon reduction targets.

Countries including Sweden, Finland, Denmark, Germany, and the United Kingdom have successfully integrated biomass into electricity generation and district heating systems.

Large-scale biomass-fired CHP plants, sustainable wood pellet supply chains, and supportive government incentives continue driving regional market expansion.

North America represents another significant market due to abundant forestry resources, well-developed biomass supply infrastructure, and favorable clean energy policies.

Meanwhile, Asia Pacific is projected to register the fastest growth during the forecast period as countries including China, India, Japan, and Thailand continue investing heavily in biomass-based electricity generation to enhance energy security and reduce agricultural waste.

Growing availability of agricultural residues, expanding industrialization, and supportive government initiatives are expected to accelerate biomass deployment throughout the region.

Competitive Landscape

The global Biomass Power Generation Market remains moderately consolidated, with leading companies investing in capacity expansion, carbon capture technologies, sustainable biomass sourcing, and advanced conversion technologies.

Major companies operating in the market include Ørsted A/S, Drax Group plc, ACCIONA, RWE, MGT Teesside Ltd, Babcock & Wilcox, Vattenfall AB, Ameresco, Inc., Engie SA, E.ON Global, Xcel Energy Inc., Energetický a průmyslový holding (EPH), RENOVA, Inc., and EDF.

These organizations continue strengthening their competitive positions through strategic partnerships, technology innovation, biomass-fired combined heat and power projects, sustainable feedstock procurement, and investments in carbon capture and storage technologies.

Recent Industry Developments

The Biomass Power Generation Market has witnessed several notable developments that reinforce its long-term growth potential.

Ørsted announced plans to begin carbon capture operations at its biomass-fired combined heat and power facilities beginning in 2025, targeting annual capture of approximately 400,000 tonnes of CO2 while developing integrated carbon management and green fuel infrastructure.

Drax Group advanced its Bioenergy with Carbon Capture and Storage (BECCS) initiative after submitting a Development Consent Order to the UK government in 2024 for the conversion of two biomass generating units at Drax Power Station. Upon completion, the project is expected to remove approximately 8 million tonnes of CO2 annually, making it one of the world's largest negative-emissions energy facilities.

Future Outlook

The future of the global Biomass Power Generation Market remains promising as governments intensify efforts to achieve climate neutrality while maintaining secure and reliable electricity supplies.

Increasing deployment of biomass-fired combined heat and power systems, expanding utilization of agricultural and forestry residues, growing investments in Bioenergy with Carbon Capture and Storage, and favorable renewable energy policies will continue driving market expansion.

Advancements in biomass gasification, anaerobic digestion, pyrolysis, and carbon capture technologies are expected to improve efficiency while reducing environmental impact.

As countries seek balanced renewable energy portfolios that combine reliability, sustainability, and carbon reduction, biomass power generation will remain a critical pillar of the global clean energy transition through 2035.

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