Global Biomass Power Market Outlook to 2030

Global Biomass Power Market Overview

• The global biomass power market reached a valuation of USD 133.97 in 2023, driven by the increasing demand for renewable energy sources as nations aim to reduce carbon emissions. Biomass power is fueled by organic materials, including wood waste, agricultural residues, and dedicated energy crops. Its adoption is propelled by government policies encouraging a transition from fossil fuels to cleaner alternatives, reducing dependence on coal and natural gas.

• Prominent players in the global biomass power market include Drax Group (UK), Engie (France), E.ON (Germany), Babcock & Wilcox (USA), and Vattenfall (Sweden). These companies are leading the development of biomass power generation and are focused on increasing capacity and efficiency. Drax Group, for instance, has successfully converted coal plants into biomass power stations, while Engie is expanding its biomass projects across Europe and Brazil.
• In 2023, Drax Group announced plans to invest an additional USD 2 billion to expand its biomass capacity, focusing on enhancing carbon capture and storage (CCS) technology. This initiative is part of its broader strategy to reduce carbon emissions. Similarly, Engie has partnered with Brazil to develop several biomass projects, further solidifying its presence in the renewable energy sector globally.
• Cities like Drax (UK), So Paulo (Brazil), and Stockton (USA) emerged as dominant players in biomass power generation due to their strategic positioning near agricultural and forestry hubs, which ensure a steady biomass feedstock supply. For example, So Paulo benefits from its vast sugarcane industries, which provide abundant biomass material, while Drax's proximity to woodlands supports its operations.

Global Biomass Power Market Segmentation

The Global Biomass Power Market is divided into the following segments:

By Feedstock Type: The global biomass power market is segmented by feedstock into wood and woody biomass, agricultural residues, and energy crops. In 2023, wood and woody biomass indeed dominated the market, primarily due to the abundant availability of sustainable wood waste from logging and sawmill operations. This trend is supported by advancements in bioenergy conversion technologies, which have enhanced the utilization of wood as a primary feedstock for biomass power generation.

By Region: The biomass power market is segmented regionally into North America, Latin America, Europe, Asia-Pacific, and the Middle East & Africa (MEA). In 2023, Europe dominated the market, driven by strict environmental regulations, significant government support, and technological innovations in biomass power generation. Countries like the UK, Sweden, and Germany are at the forefront of biomass adoption, with policies focused on reducing greenhouse gases and increasing renewable energy capacity.

By Technology Type: The global biomass power market is segmented by technology into combustion, gasification, and anaerobic digestion. In 2023, combustion technology dominated the market due to its simplicity, efficiency, and scalability, making it the preferred choice for large-scale biomass power generation. Gasification, although gaining popularity, remains less prominent due to the higher costs associated with installation and operational complexity.

Global Biomass Power Market Competitive Landscape

• Drax Group Recent Developments: In September 2024, Drax welcomed over 100 businesses, prospective suppliers, and local communities to an event for the planned expansion project at its Cruachan Pumped Storage Hydro Power Station in Scotland.The expansion project, which secured development consent in 2023, aims to provide an additional 600MW of generation capacity, more than doubling the current site's generating capacity.
• Engie Recent Developments: In 2023, Engie announced plans to invest USD 800 million in new biomass power plants, strategically focusing on regions with high agricultural output, particularly sugarcane plantations. This approach is intended to secure a sustainable supply of biomass feedstock, aligning with the company's commitment to renewable energy sources.

Global Biomass Power Market Analysis

Global Biomass Power Market Growth Drivers

• Increasing Focus on Renewable Energy by Governments: Governments globally are prioritizing renewable energy over fossil fuels, pushing for biomass as a reliable energy source. In 2023, the U.S. did allocate significant funding for renewable energy, including approximately USD 6 billion towards subsidies aimed at expanding renewable energy production, with a notable focus on biomass energy in rural areas. This funding is part of broader efforts to transition from fossil fuels to sustainable energy sources, aligning with global trends towards renewable energy adoption.
• Availability of Biomass Feedstock: A growing agricultural sector in major biomass-producing countries like Brazil and India is a crucial driver. In 2023, Brazil's agricultural sector produced 640 million tons of biomass waste, which significantly contributed to the country's biomass power production. This availability of feedstock ensures a stable supply, especially in regions with abundant agricultural and forestry activities.
• Carbon-Neutral Goals and Corporate Initiatives: Corporations are increasingly setting ambitious carbon-neutral goals, driving the adoption of biomass energy. In 2023, major companies invested heavily in biomass projects as part of their sustainability efforts, accelerating the growth of biomass power. This corporate momentum continues to push more investments into biomass energy initiatives globally, aligning with environmental targets.

Global Biomass Power Market Challenges

• High Operational Costs and Infrastructure Needs: Despite its growth, biomass energy faces challenges related to operational costs. In 2023, the cost of setting up a biomass power plant was reported to range between USD 3,000 to 4,000 per kilowatt, which is indeed higher than conventional fossil fuel plants. This reflects the significant initial investment required for biomass energy infrastructure. Additionally, these costs are compounded by the need for specialized facilities to store, process, and transport biomass materials, which presents operational challenges that can hinder adoption, especially in cost-sensitive regions.
• Competition with Other Renewable Energy Sources: Biomass energy competes with more established renewable energy sources, such as solar and wind. In 2023, global investments in wind energy surpassed USD 200 billion, dwarfing biomass investments, which only received USD 30 billion. The competition for government subsidies and corporate investment in renewables makes it challenging for biomass to secure necessary funding.

Global Biomass Power Market Government Initiatives

• European Unions RED II Framework: In 2023, the European Union strengthened its Renewable Energy Directive the RED II framework aims to enhance the share of renewable energy within the EU's overall energy mix, with a significant emphasis on biomass as a key component. Member states such as Sweden and Finland, which have robust forestry industries, are actively implementing subsidies to support the development of biomass power technologies. This initiative is part of a broader strategy to transition towards more sustainable energy sources.
• Indias National Bioenergy Program: Indias Ministry of New and Renewable Energy launched the National Bioenergy Program in 2022, aiming to add 5 GW of biomass energy capacity by 2025. The program provides financial incentives for the construction of biomass plants in rural areas, leveraging the countrys significant agricultural sector to supply feedstock. It also includes USD 500 million in government support for research and development in advanced biomass technologies.

Global Biomass Power Market Outlook

The global biomass power market is set for substantial growth by 2028, driven by regulatory pushes for clean energy and technological innovations. Governments worldwide are enforcing stricter environmental regulations and incentivizing renewable energy adoption to meet carbon reduction goals.

Future Trends:

• Expansion of BECCS Technology: The adoption of Biomass Energy with Carbon Capture Storage (BECCS) is expected to increase as countries focus on meeting carbon neutrality targets. BECCS technology is becoming a critical factor in helping nations reduce emissions while generating renewable energy, making it a key growth area for the biomass power market in the coming years.
• Increasing Role of Agricultural Residue: Agricultural residue as a biomass feedstock is expected to see increased utilization, especially in regions like Latin America. Countries are focusing on using agricultural waste as an environmentally sustainable solution for biomass power generation, contributing to waste management and renewable energy goals.