Global Biomass Market Outlook to 2030

Global Biomass Market Overview

• The global biomass market was valued at USD 58.8 Mn in 2023. This growth is primarily driven by increasing demand for renewable energy sources, government incentives for sustainable energy, and advancements in biomass conversion technologies. The market's expansion is also supported by the rising awareness of climate change and the need to reduce greenhouse gas emissions.

• Prominent players in the global biomass market include Enviva Partners, Drax Group plc, Valmet, Siemens AG, and ABB Ltd. These companies are leading the development and implementation of biomass technologies. Enviva Partners, for example, is the worlds largest producer of wood pellets, a critical biomass feedstock, while Drax Group plc is known for its advanced biomass power generation facilities. Valmet, Siemens, and ABB are significant contributors with their cutting-edge technologies and solutions for biomass energy production and optimization.
• In 2023, Enviva announced a restructuring plan and filed for Chapter 11 bankruptcy, which included securing $500 million in debtor-in-possession financing. This financing is intended to support the company's operations during the restructuring process, rather than for expanding biomass production facilities.
• Cities such as Atlanta, Berlin, and Beijing are pivotal in the global biomass market due to their strategic roles and advanced infrastructure. Atlanta is a key player due to its proximity to extensive biomass resources and state-of-the-art processing facilities. Berlin stands out with its robust sustainability policies and significant investments in renewable energy technologies. Beijing is central to the market due to China's large-scale adoption of biomass energy as a cornerstone of its national energy strategy.

Global Biomass Market Segmentation

By Product Type: The biomass market is segmented by product type into wood pellets, agricultural residues, and municipal solid waste (MSW). In 2023, wood pellets led the market due to their high energy density, ease of handling, and widespread use in both residential and industrial applications. Leading manufacturers like Enviva Partners have bolstered the wood pellet segment through extensive production and distribution networks.

Table: Biomass Market Share by Product Type (2023)

By Region: The biomass market is segmented regionally into North America, Europe, APAC, Latin America, and MEA. In 2023, North America, particularly the U.S., holds a dominant position in the biomass market due to its abundant biomass resources and favorable government policies. The U.S. leads with its extensive biomass production and utilization facilities, and recent increases in biomass power generation projects further reinforce its leading role in the market.

Region Market Share (%)

By Application: The biomass market is categorized into power generation, heating, and transportation. In 2023, power generation was the largest application segment, driven by significant investments in biomass power plants and a growing shift towards renewable energy sources for electricity. Companies such as Drax Group plc have advanced biomass power technology, enhancing the efficiency and scale of biomass-based power generation.

Table: Biomass Market Share by Application (2023)

Global Biomass Market Competitive Landscape

• Enviva Partners: In 2023, Enviva Partners announced significant plans todouble its wood pellet production capacityfrom 6.2 million metric tons per year to13 million metric tons per yearover the next five years. This expansion will involve the construction ofsix new plantsin the U.S. South at a total cost exceeding$1 billion.
• Drax Group plc: Drax Group opened its new pellet plant in Demopolis, Alabama, in 2023. This facility represents a significant investment of over $100 million and has the capacity to produce 360,000 tonnes of sustainable biomass pellets annually from sawmill residues like sawdust and wood chips. The plant is part of Drax's strategy to bolster its biomass production capabilities and meet the increasing demand for low-carbon fuels in Europe and Asia.

Global Biomass Market Analysis

Global Biomass Market Growth Drivers

• Government Incentives for Renewable Energy: Governments worldwide are increasingly offering financial incentives and subsidies for renewable energy projects, including solar, wind, and biomass. For example, in the Union Budget 2023-24, India extended customs duty exemption to the import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles up to 31 March 2024.
• Advancements in Biomass Conversion Technologies: Innovations in biomass conversion technologies are enhancing the efficiency and cost-effectiveness of biomass energy production. For example, advancements in gasification and anaerobic digestion techniques are making it easier to convert organic waste into energy. The U.S. Department of Energy reported that these technologies are expected to improve biomass conversion efficiency by 2025. This improvement is anticipated to attract more investments in biomass energy, driving market growth.
• Rising Energy Demand: The global energy demand is projected to rise, driven by population growth and industrialization, particularly in developing countries. According to the International Energy Agency (IEA), global energy demand is expected to increase in 2024, with renewable sources, including biomass, playing a crucial role in meeting this demand. As conventional energy sources become less viable due to environmental concerns, biomass is positioned as a sustainable alternative, further propelling its market growth.

Global Biomass Market Challenges

• High Initial Investment Costs: One of the primary challenges facing the biomass market is the high capital expenditure required for setting up biomass facilities. In 2023, the initial cost to build a biomass power plant was indeed estimated at around USD 4,000 per installed kW, which is significantly higher than conventional energy sources. This high capital expenditure poses a challenge for potential investors, potentially slowing down market expansion despite the long-term cost savings associated with biomass energy production.
• Environmental and Regulatory Compliance: Adhering to environmental regulations and achieving regulatory compliance is a significant challenge for biomass energy projects. In 2023, biomass facilities faced increased scrutiny over their environmental impact, including air quality and land use concerns. Compliance with stringent regulations, such as those enforced by the Environmental Protection Agency (EPA) in the U.S., requires additional investments in monitoring and mitigation technologies. These compliance costs can affect the overall profitability of biomass projects and pose a barrier to market growth.

Global Biomass Market Government Initiatives

• U.S. Biomass Research and Development Initiative (BRDI): The BRDI is jointly administered by the U.S. Department of Agriculture (USDA) and the U.S. Department of Energy (DOE). This initiative aims to support research and development in advanced biomass technologies and improve biomass feedstock quality. The federal share of Biomass Research and Development Initiative (BRDI) awards, which is expected to range from USD 250,000 to USD 2,000,000, with a minimum non-federal share of 20% of the total project cost required, is applicable for thefiscal year 2023.
• Chinas Renewable Energy Development Fund: Instead, China's renewable energy strategy is primarily guided by its 14th Five-Year Plan (2021-2025), which emphasizes a substantial increase in renewable energy generation and consumption. The plan targets a 50% increase in renewable energy generation from 2.2 trillion kWh in 2020 to 3.3 trillion kWh by 2025, and aims for renewable sources to contribute 33% of electricity consumption by 2025. In 2023, China has made significant strides in its clean energy sector, investing approximately $890 billion in renewable energy infrastructure, which includes solar, wind, and biomass projects.

Global Biomass Market Outlook

The global biomass market is poised for significant growth over the next five years, driven by continued advancements in technology, supportive government policies, and increasing corporate investments. As the world moves towards more sustainable energy solutions, the biomass sector is set to benefit from innovative technologies, expanded industrial applications, and heightened adoption in emerging markets.

Future Trends:

• Emergence of Next-Generation Biomass Technologies: By 2028, the biomass market is expected to see the widespread adoption of next-generation technologies, such as advanced gasification systems and integrated biomass conversion processes. These technologies are anticipated to further enhance energy efficiency and reduce costs. Market forecasts suggest that these innovations could significantly improve the overall efficiency of biomass energy production compared to current technologies.
• Expansion of Biomass Energy Integration in Industrial Processes: The integration of biomass energy into industrial processes is projected to expand significantly by 2028. With growing emphasis on sustainability, more industrial sectors are likely to adopt biomass energy for heating and power generation. This trend is driven by regulatory pressures and corporate sustainability goals.