Global Biomass Power Market Snapshot 2035: Trends, Growth & Regional Insights

 

The global biomass power generation market was valued at US$ 94.8 Bn in 2024 and is projected to reach US$ 136.2 Bn by 2035, expanding at a steady CAGR of 3.4% from 2025 to 2035. Growth is being shaped by the dual priorities of strengthening energy security and accelerating decarbonization across global economies.

Analysts’ Viewpoint

Biomass power remains a critical component of the renewable energy mix because of its ability to provide dispatchable, baseload electricity—an advantage over intermittent sources such as solar and wind. Industrial users account for nearly 48% of global biomass power demand, leveraging it for consistent energy supply and cost stability.

Europe leads the global market with nearly 40% share, supported by progressive climate regulations and established district heating networks. Meanwhile, Asia-Pacific is expected to record the fastest growth due to abundant feedstock availability and rising energy demand. Leading players such as Drax Group plc and Ørsted A/S continue to advance biomass integration into large-scale grid systems and combined heat and power (CHP) facilities.

In the long term, supportive government incentives and monetization of carbon credits are expected to reinforce biomass as a commercially viable pillar of the clean energy transition.

Market Overview

Biomass power generation utilizes organic materials such as agricultural residues, forestry by-products, wood pellets, municipal solid waste, and industrial wastewater to produce electricity and heat. It contributes to waste reduction and supports circular economy initiatives by converting organic waste into usable energy.

Governments worldwide are encouraging biomass adoption through renewable portfolio standards, tax incentives, subsidies, feed-in tariffs, and renewable purchase obligations. Unlike wind and solar, biomass plants can operate continuously, making them reliable baseload energy sources for utilities and industrial facilities.

Emerging economies in Asia-Pacific and Latin America are rapidly expanding biomass capacity due to ample agricultural residues and increasing focus on domestic energy production.

 

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Key Market Drivers

Rising Global Focus on Renewable Energy and Decarbonization

Global commitments to achieve net-zero emissions by 2050 are significantly accelerating renewable energy deployment. Biomass complements intermittent renewables by providing dispatchable power.

The European Union’s Renewable Energy Directive II (RED II) mandates at least 32% renewable energy consumption by 2030, with strong emphasis on plant-based biomass. India has set a national target of 10 GW biomass capacity by 2030, while China generates over 140 TWh of biomass electricity annually.

Supportive policies such as feed-in tariffs and carbon credit programs continue to enhance commercial viability for industrial and utility-scale biomass projects.

Abundant Agricultural and Forestry Residues

An estimated 140 billion metric tons of biomass residues are generated annually worldwide. Much of this remains underutilized.

India produces approximately 500 million tons of crop residues each year, much of which contributes to air pollution when burned. Organized biomass power systems convert such waste into productive energy, reducing environmental impact. China utilizes nearly 60 million tons of agricultural residues annually, supporting over 35 GW of installed biomass capacity. In Europe, forestry waste and wood pellets significantly contribute to renewable heating and electricity.

End-use Insights: Industrial Sector Leads

The industrial sector accounts for nearly 48% of global biomass power installations, driven by high and continuous energy requirements.

In India, the sugar industry generates over 8,000 MW annually from bagasse-based biomass plants, serving both captive consumption and grid supply. Europe’s pulp and paper sector consumes around 55 million tons of biomass annually. Japan has commissioned more than 70 biomass projects since 2020, particularly in industrial parks.

Biomass enables industries to enhance energy security, reduce carbon footprints, and achieve cost efficiencies through localized residue utilization.

Regional Insights

Europe remains the leading region, holding nearly 40% of global biomass capacity. Countries such as Sweden and Finland derive over 20% of district heating from biomass, demonstrating large-scale integration into urban energy systems.

North America leverages abundant forestry and agricultural feedstock. Canada alone generates more than 2,000 MW of biomass electricity, particularly in British Columbia.

Asia-Pacific is the fastest-growing region. Japan added over 500 MW of biomass capacity in 2023 under its feed-in tariff scheme, while Thailand derives approximately 8% of its energy from biomass, primarily using palm oil and sugar residues.

Competitive Landscape

Major players in the biomass power generation market include Drax Group plc, Ørsted A/S, 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.

Recent developments highlight the sector’s transition toward carbon-negative solutions. Ørsted plans to initiate carbon capture at its biomass CHP stations in 2025, targeting 400,000 tonnes of CO₂ capture annually. Drax Group has submitted plans to convert biomass units into Bioenergy with Carbon Capture and Storage (BECCS) facilities capable of removing up to 8 million tonnes of CO₂ annually.

Conclusion

While growth remains moderate at 3.4% CAGR, biomass power generation continues to play a crucial role in the global clean energy landscape. With strong policy backing, industrial demand, and carbon capture advancements, biomass is positioned as a dependable and scalable renewable energy solution through 2035.