The global biomass power generation market is poised for substantial growth, with projections indicating an increase from USD 103.62 billion in 2025 to USD 159.54 billion by 2035, representing a compound annual growth rate (CAGR) of 4.41%. This growth trajectory is underpinned by a confluence of factors, including heightened government support for renewable energy, advancements in biomass conversion technologies, and a burgeoning demand for waste-to-energy solutions.
Asia Pacific currently dominates the market, holding over 40% of the market share, while North America is expected to witness significant growth. The forest waste segment leads in terms of feedstock, although the agriculture waste segment is anticipated to grow at the fastest rate. Technologically, combustion remains the dominant method, but gasification is gaining traction with a strong CAGR. Solid fuels are currently the most prevalent, yet liquid fuels are expanding at a solid pace.
The integration of artificial intelligence (AI) into the biomass power generation sector is revolutionizing operational efficiency and fuel optimization. AI-driven analytics enable plant operators to monitor combustion processes and control equipment, ensuring stable energy production and cost reduction. Furthermore, AI aids in environmental compliance by detecting emission anomalies and recommending corrective actions.
Government incentives and policy frameworks are driving investment in biomass power plants, particularly in regions with robust agricultural and forestry sectors. The growing demand for waste-to-energy solutions is propelled by increasing municipal and agricultural waste generation, which is fostering the adoption of biomass technologies for sustainable electricity and heat production.
The global landscape of biomass power generation is marked by significant contributions from key nations. China, Brazil, Japan, and the U.S. are leading producers, leveraging diverse feedstocks such as forestry residues, agricultural waste, and municipal waste. Investment in bioenergy technologies is also on the rise, with global investments reaching approximately USD 16 billion in 2025, indicating a growing financial commitment to biomass and related bioenergy technologies.
Looking ahead, the biomass power generation market is set to expand rapidly, driven by renewable energy transitions and waste-to-value strategies. Sustainability initiatives and stricter emission standards are prompting investments in cleaner combustion systems and high-efficiency digesters. The market is also witnessing global expansion, with Asia-Pacific emerging as a primary hub for biomass power deployment.
Investment activity is increasing, with private equity firms, development banks, and strategic energy companies targeting biomass assets for stable, long-term returns. The startup ecosystem is growing, with innovators developing compact digesters, advanced gasification reactors, and next-generation pelletization technologies. These developments are poised to shape the future of the biomass power generation sector, driving growth and innovation in the years to come.
The implications for the market are profound. The shift towards biomass power generation is not only a response to the need for renewable energy but also a strategic move to reduce reliance on fossil fuels and cut pollution. The integration of AI and the focus on sustainability are set to enhance the efficiency and environmental performance of biomass power plants. As governments and corporations increasingly prioritize decarbonization and waste management, the biomass power generation market is well-positioned to play a pivotal role in the global energy transition.