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Jul 1, 2025
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While solar and wind technologies often dominate the conversation around renewable energy, another resource continues to play a critical (yet underestimated) role in the global energy mix: bioenergy.
Biomass energy is all about turning organic materials – think crop residue, wood chips, even municipal waste – into usable power. In fact, this under-the-radar resource is the largest source of renewable energy worldwide, accounting for roughly 55% of all renewable energy consumption ****(excluding traditional firewood use). Surprised? Many are. It currently supplies over 6% of the global primary energy demand, supporting electricity generation, heating, and biofuel production across diverse sectors and geographies.
Source: Hydrogen estimates from IEA Global Hydrogen Review (2024) (https://www.iea.org/reports/global-hydrogen-review-2024), IEA (forthcoming), World Energy Outlook 2023.
Why Biomass Energy Matters More Than Ever
Reliable, Round-the-Clock Power:
In the push for a cleaner energy future, why should anyone care about bioenergy? For starters, bioenergy uniquely complements other renewables. Solar and wind are fantastic but intermittent – the sun doesn’t always shine, and the wind doesn’t always blow. Biomass, on the other hand, can generate power on demand. Feed a biomass boiler fuel and it will produce electricity or heat regardless of the weather, day or night. This capability makes it a valuable reliable backbone in a renewable energy grid.
Take the example of the UK’s Drax Power Station, which converted from coal to biomass. It now operates four massive 645 MW biomass turbines, becoming the single largest renewable power plant in Britain – enough to power around 5 million homes come rain or shine. Biomass offers a level of grid stability that helps balance out the variability of wind and solar by providing steady baseload power and flexible backup when needed. In an era of energy uncertainty, dispatchable renewable sources like biomass are a boon for utility planners and energy investors alike.
Transport Sector:
Beyond electricity grids, bioenergy fills niches other renewables can’t. One big area is transportation and industry. While electric cars and hydrogen are on the rise, airplanes and ships cannot yet run on batteries for long-haul journeys. Here, biofuels step in: sustainable aviation fuels derived from biomass and biodiesel for ships or heavy trucks can cut emissions in sectors where electrification is tough. In fact, countries worldwide are pushing biofuels – by 2023, 64 countries had adopted mandates requiring a share of biofuels in fuel mixes. Thanks to such policies, biofuels have become the largest source of renewable energy in the transport sector, providing about 3.94 EJ (exajoules) of energyin 2022.
Turns Waste into Energy:
Biomass tackles waste management and energy security by converting organic waste and agricultural residues into useful energy, reducing pollution and reliance on landfills. Instead of burning or dumping waste, regions can use local materials (like farm byproducts and green waste) to generate clean power, boosting local energy independence.
Biomass is potentially carbon neutral because the CO₂ released when burned equals what plants absorbed while growing. With sustainable practices and emerging tech like bioenergy with carbon capture and storage (BECCS), biomass can even become carbon negative, removing CO₂ from the atmosphere—like a Swedish project aiming to capture 7 million tons over 10 years.
Boosts Local Economy & Energy Security:
Biomass uses local feedstocks like crop residues and wood chips, supporting farmers, foresters, and rural jobs. Countries like Brazil show its impact, with nearly 1 million biofuel jobs. Biomass also reduces dependence on fossil fuel imports, improving energy independence.
Policy Tailwinds and Stable Demand:
From a policy and investment standpoint, biomass benefits from renewable energy incentives such as subsidies and green credits. This creates a stable market for biomass projects, which often secure long-term contracts, making them appealing infrastructure investments. Globally, biomass power capacity hit 150 GW in 2023 and continues to expand as a reliable, sustainable energy source.
⚠️ The Challenges and Considerations
Like every energy source, biomass is not without challenges. It’s important to acknowledge and address these to truly reap biomass energy’s benefits sustainably:
Sustainable Sourcing is essential: Biomass is only renewable if feedstocks are managed responsibly. Unsustainable harvesting (e.g., clear-cutting forests) can increase emissions and harm ecosystems. Use residues, fast-growing crops, or certified sources to ensure real climate benefits. Many governments and certification bodies now enforce sustainability criteria for biomass (e.g., requiring proof that wood pellets come from responsibly managed forests) to prevent “renewable energy” from inadvertently causing environmental harm.
Food vs. Fuel: Using crops like corn or soy for biofuels can compete with food supply and drive up prices. Shifting to second-generation biofuels from waste or non-food crops helps avoid this trade-off. Policies in many regions now put caps on first-generation (food-based) biofuels and set targets for advanced biofuels. The goal is to decouple bioenergy growth from food markets.
Emissions and Pollution Control: Biomass can be carbon-neutral, but burning it still releases air pollutants like particulates and NOx. Without proper controls, large-scale use may harm air quality. Modern plants often use filters and scrubbers to reduce emissions, and biogas burns cleaner than coal or oil. However, burning certain types like municipal waste can release toxins if poorly managed. These challenges are solvable but add cost and complexity.
Logistics: Biomass is bulky and less energy-dense than fossil fuels, making transport and storage costly. Siting plants near local feedstocks and using densified forms (like pellets) helps keep supply chains efficient.
Public Perception & Policy Risk: Biomass faces criticism if it’s seen as environmentally harmful. Transparency, sustainable practices, and community benefits are key to maintaining public and regulatory support. Demonstrating carbon savings, responsible sourcing, and community benefits will help keep biomass a welcomed part of the renewable family. In short, the sector must continuously earn its “clean energy” badge through genuine sustainable operation.
What’s Next?
As the world races toward net-zero emissions, every renewable solution has a role to play, and biomass is poised to keep growing (the International Energy Agency foresees bioenergy use needing to roughly double by 2030 to align with climate goals).
For policymakers and investors alike, this offers a chance to diversify and strengthen green energy strategies. The clean energy transition needs every sustainable option - and biomass is ready to play its part.
The question now is: how will you engage with this opportunity?
About Penomo
Penomo is a digital asset infrastructure platform specializing in tokenized energy and AI infrastructure financing. By transforming physical infrastructure into compliant digital securities, we connect private capital markets with institutional-grade renewable energy and AI investments. Through tokenization, Penomo is streamlining capital access, enhancing liquidity, and enabling efficient financing for the global energy transition and AI expansion.
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