Biomass Electricity Market Size, Share, and Industry Analysis, By Feedstock (Solid Biomass, Biogas, Liquid Biomass, and Municipal Solid Waste), By Technology (Direct Combustion, Gasification, Anaerobic Digestion, and Others), By End User (Residential, Commercial, and Industrial), and Regional Forecast, 2025-2032

Biomass electricity, also called bioenergy, refers to the generation of electricity using organic materials as feedstock. These organic materials come from a variety of sources, such as agricultural waste, animal waste, industrial byproducts, and others.

The carbon emission reduction goals and waste management are among the significant drivers proliferating the market growth. The rising carbon emissions across the globe have been a major concern globally. According to the International Energy Agency, Global carbon dioxide (CO2) emissions from energy combustion and industrial processes increased by 0.9% or 321 Mt in 2022, reaching a record high of 36.8 Gt. Thus, the United Nations and the governments of the countries have taken various steps for the reduction of carbon emissions, with biomass electricity being one of them. Additionally, converting wastes into energy reduces the volume of waste sent to landfills, subsequently mitigating associated environmental problems, such as methane emissions and groundwater contamination.

However, deforestation and biodiversity loss from excessive biomass harvesting can negatively impact the biomass electricity market. Harvesting trees or other plant materials at unsustainable rates can lead to deforestation, disrupt ecosystems, and reduce carbon sequestration capacity. 

The COVID-19 pandemic had a mixed impact on the market. The pandemic caused widespread disruptions in global supply chains, which led to transportation delays and logistical challenges in biomass fuel sources, such as wood pellets, agricultural waste, or municipal solid waste. Consequently, the pandemic heightened awareness of environmental issues, leading to increased interest in renewable energy sources, including biomass, as part of a cleaner source.

KEY INSIGHTS

The report includes the following key findings:

• Recent Advances in the Biomass Electricity Market


• Key Industry Trends


• Regulatory Landscape for the Biomass Electricity Market


• Key Industry Developments (Mergers, Acquisitions, and Partnerships)

SEGMENTATION

ANALYSIS BY FEEDSTOCK

Based on the feedstock, the market is divided into solid biomass, biogas, liquid biomass, and municipal solid waste. The solid biomass segment holds the dominant share in the market due to its wide availability, ease of use, and established technology i.e., direct combustion for converting it into electricity. Biogas is the second leading segment in the market, driven by the growing adoption of anaerobic digestion for waste management and energy production, as well as its ability to produce electricity in smaller-scale settings.

The liquid biomass segment accounts for a relatively low share of the market due to its low availability. It is derived from plant oils, animal fats, and other organic sources. While primarily used in transportation, some liquid biomass is used to generate electricity in dedicated biofuel power plants or as a supplement in conventional power plants. Municipal solid waste is growing at the fastest rate owing to its wide availability in the market. In addition, it supports the waste management organic portion of city waste, including paper, food scraps, and other organic materials.

ANALYSIS BY TECHNOLOGY

Based on technology, the market is segmented into direct combustion, gasification, anaerobic digestion, and others. Direct combustion is the leading segment in the market due to the large availability of feedstocks, such as wood chips and agricultural waste, that are utilized as feedstock in this technology. In addition, its vast utilization in large-scale power plants and smaller cogeneration facilities also results in a higher market share for direct combustion.

Gasification is the fastest-growing segment as it produces cleaner energy with lower emissions than the direct combustion technique. The impurities are filtered out during the gasification process. Anaerobic digestion is also projected to grow steadily due to its fewer emissions features compared to direct combustion. The digestate (solid byproduct) can be used as fertilizer, providing additional environmental benefits.

ANALYSIS BY END USER

Based on the end user, the biomass electricity market is segmented into residential, commercial, and industrial. Industrial is the most dominating segment in the market owing to the significant requirement of energy for manufacturing and processing. Biomass electricity provides a renewable energy source that can be used in combined heat and power (CHP) systems, reducing energy costs and emissions.

Commercial is anticipated to grow significantly in the market due to the rising requirement for power for heating, lighting, and other operational needs. Additionally, the rising inclination toward controlling carbon emissions from the building sector is also attributed to the segment growth in the market. Residential use of biomass electricity is generally lower due to infrastructure constraints and the predominance of other energy sources, such as natural gas or conventional electricity. However, there's a growing rise in biomass for residential use, particularly in rural areas and communities focused on renewable energy and sustainability.

REGIONAL ANALYSIS

The biomass electricity market has been studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Europe holds the major share of the market due to the stringent regulations and ambitious targets for reducing carbon emissions set by the European Union. Countries, such as Sweden, Germany, and the U.K. have made significant investments in biomass energy. In addition, the E.U.'s Renewable Energy Directive has contributed to the rapid growth of the biomass sector.

North America is the second-leading region in the market due to the presence of leading countries, such as the U.S. and Canada, which are the leaders in biomass electricity due to strong renewable energy policies, significant agricultural and forestry waste, and the presence of advanced biomass technologies.

Asia Pacific is projected to grow at the fastest rate in the market over the forecast period due to increasing energy demand, government initiatives to reduce dependence on fossil fuels, and a large agricultural sector generating substantial biomass waste.

Latin America's share would also rise in the coming years owing to the strong development in the bioenergy derived from sugarcane and other agricultural products in Brazil and other nations.

The Middle East & Africa holds a low share in the market compared to other regions due to its reliance on fossil fuels, especially oil and natural gas, and the slower adoption of renewable energy technologies. However, there is growing interest in biomass electricity in regional countries, driven by sustainability goals and a need for decentralized energy sources.

KEY PLAYERS COVERED

Key players in the global biomass electricity market are Xcel Energy Inc., Mitsubishi Heavy Industries, Ltd., Ramboll Group A/S, Suez, Orsted A/S, Ameresco, Veolia, General Electric, Engie, EPH, and Babcock & Wilcox Enterprises Inc.

KEY INDUSTRY DEVELOPMENTS

• In April 2023, Marubeni Corporation and Taisei Corporation, via their special purpose company "Ishikari area Biomass Power Corporation," are building a wood-based biomass power plant in Japan. The plant, named Ishikari Area Biomass Power Plant, will have a power generation capacity of 9,950 kW and is located at the Ishikari Bay New Port Area in Ishikari City, Hokkaido.


• In October 2022, SRP approved a 10.5-year contract to purchase renewable energy from the Snowflake biomass plant, which will deliver reliable power and help reduce the risk of wildfires in northern Arizona in the U.S. The agreement with Novo BioPower uses wood chips from forest thinning in the SRP watersheds, primarily the East Clear Creek watershed and White Mountain Apache Tribal lands. The plant's output will support thinning across 80,000 acres over the next decade and provide renewable power for over 3,000 SRP customers.