Biomass Power Generation Market 2025

Biomass power generation Market Size

The global biomass power generation market reached a value of nearly $59,718.20 million in 2024, having grown at a compound annual growth rate (CAGR) of 4.83% since 2019. The market is expected to grow from $59,718.20 million in 2024 to $83,561.88 million in 2029 at a rate of 6.95%. The market is then expected to grow at a CAGR of 6.50% from 2029 and reach $114,498.02 million in 2034. Growth in the historic period resulted from the increase in energy demand and consumption, strong economic growth in emerging markets, government initiatives and rising environmental awareness. Factors that negatively affected growth in the historic period were rising security concerns in the energy sector. Going forward, growing demand for renewable energy sources, rising electricity prices, rising urbanization and increased demand for sustainable biofuel will drive the growth. Factor that could hinder the growth of the biomass power generation market in the future include significant upfront costs for biomass power plants.

Biomass power generation Market Drivers

The key drivers of the dates market include: Growing Demand For Renewable Energy Sources The growing demand for renewable energy sources is expected to propel the growth of the biomass power generation market going forward. Biomass energy, derived from organic materials such as agricultural waste, wood pellets and municipal solid waste, offers a reliable and renewable power source with lower carbon emissions. Supportive policies, incentives and renewable energy targets are encouraging investments in biomass infrastructure. For instance, in July 2024, according to GreenMatch, a UK-based online service that offers comparative green energy quotes & solutions, in 2022, renewable energy sources represented approximately 13.1% of the total primary energy consumption in the U.S. and about 21.5% of electricity generation from utility-scale sources. Moreover, by 2023, wind and solar will be projected to contribute 16% to total electricity generation, an increase from 14% in 2022. Therefore, the growing demand for renewable energy sources will drive the biomass power generation market in the forecast period.

Biomass power generation Market Restraints

The key restraints on the biomass power generation market include: Significant Upfront Costs For Biomass Power Plants Significant upfront costs for biomass power plants are anticipated to adversely affect biomass power generation in the forecast period. High capital requirements for land, equipment, compliance and grid integration elevate financial risk, discouraging investment. A long payback period and high operating costs make biomass less competitive than cheaper renewables like solar and wind. These factors may restrict capacity growth, hinder financing and slow adoption. For example, in November 2024, FinModelsLab, a Ukraine-based financial advisory firm, reported that launching a biomass power plant requires substantial capital investment across key areas. Major expenses include land acquisition, biomass processing equipment, power generation systems, and facility construction, with costs ranging from $14.3 million to $63.5 million, depending on the project scale and technology. Regulatory compliance, grid integration and operational training add further expenses. Contingency planning and project management ensure financial flexibility, while marketing supports customer acquisition. Understanding these cost components is essential for securing funding and achieving long-term sustainability in the biomass energy sector. Therefore, significant upfront costs for biomass power plants can create challenges for the biomass power generation industry, hindering its expansion and adoption in the market.

Biomass power generation Market Trends

Major trends shaping the biomass power generation market include: Investment In Biomass Energy Reinforces Long-Term Sustainability Goals Major companies operating in the biomass power generation market are focusing on investment in biomass energy to reinforce long-term sustainability goals. These investments align with global decarbonization efforts and corporate environmental, social and governance (ESG) commitments, helping companies meet regulatory requirements and achieve net-zero targets. Additionally, biomass power generation supports waste management by repurposing organic waste into energy, reducing landfill use and methane emissions. For instance, in October 2024, One Forty-One, a New Zealand-based company in the forestry sector, announced a $30 million investment in a renewable biomass power generation project at their Jubilee Sawmill in Mount Gambier, Australia. The project, which includes the installation of a new boiler and steam turbine, represents a total investment of approximately $90 million. This initiative underscores our commitment to continuous investment, demonstrating our long-term dedication to the region, sustainability and innovation. The new turbine will generate more than enough electricity to power the entire Jubilee Sawmill site. The excess renewable electricity can be returned to the grid or used to enable future electrification of forklifts, trucks and other machinery. Biomass Power Expansion In Vietnam To Reduce Carbon Footprint Major companies operating in the biomass power generation market are focusing on biomass power expansion in Vietnam to reduce carbon footprint. Companies are investing in biomass power plants, partnering with local stakeholders and leveraging government incentives that promote renewable energy development. This expansion aligns with Vietnam’s commitment to achieving net-zero emissions by 2050 and reducing dependence on imported fuels. For instance, in October 2024, Erex, a Japanese renewable energy developer, started building two 50 MW (Megawatt) biomass-fired power plants in Vietnam. Both projects are backed by Japan's subsidy scheme that supports potential projects that could contribute to its Joint Crediting Mechanism (JCM) to cut greenhouse gas emissions. Each plant will have 50 MW of generation capacity and burn around 500,000 t/yr (tons per year) of wood residue secured in northern Vietnam. Both plants are scheduled to come online in mid-2027. The construction cost of each plant is estimated at $100 million to $120 million.

Opportunities And Recommendations In The Biomass power generation Market

Opportunities – The top opportunities in the biomass power generation markets segmented by feedstock will arise in the woody biomass segment, which will gain $8,883.14 million of global annual sales by 2029. The top opportunities in the biomass power generation markets segmented by technology will arise in the combustion segment, which will gain $ 15,241.04 million of global annual sales by 2029. The top opportunities in the biomass power generation markets segmented by end-user will arise in the industrial segment, which will gain $12,009.44 million of global annual sales by 2029. The biomass power generation market size will gain the most in Brazil at $10,353.45 million. Recommendations- To take advantage of the opportunities, The Business Research Company recommends the biomass power generation companies to focus on long-term sustainability through biomass investments, focus on biomass power expansion, focus on biogas utilization in wastewater treatment, focus on biogas and energy crops for higher growth, expand in emerging markets, continue to focus on developed markets, focus on expanding distribution through strategic partnerships, focus on competitive and flexible pricing models, focus on digital outreach and educational content, focus on industry partnerships and policy advocacy and focus on industrial end-user engagement.