Biomass is characterized as renewable organic material derived from animals and plants. As the greatest source of total annual energy consumption in the US until the mid-1800s, biomass continues to remain an essential fuel in several developing nations. As per Inkwood Research, the global biomass power market is set to record a CAGR of 6.32% in terms of revenue and 7.71% in terms of volume between 2024 to 2032.
In emerging countries, especially in
rural regions, around 2.5 billion people rely on
biomass, as per the International Energy Agency (IEA), to
meet their energy needs. These include charcoal, fuelwood, animal dung, and
agricultural waste. In several countries, these resources also account for
over 90% the household energy consumption.
Since biomass is increasingly used for heating and
energy in commercial applications, this factor plays an essential role in
positioning the commercial sector as the leading application,
progressing with a CAGR of 6.46% over the
forecast period.
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From Fossil Fuels to Biomass: Why the Shift?
Fossil fuels comprise 80% of
the current global primary energy demand, with the energy system accredited to
two-thirds of global CO2 emissions. Despite the West largely transitioning to
fossil fuels, biomass still represented the majority of the energy consumption
of the underprivileged in developing countries, including Ethiopia,
India, and others.
However, this trend is now changing,
with bioenergy regarded as the primary source of renewable energy in the
European Union (EU). Moreover, with an aim to meet climate targets, the European
Commission’s Renewable Energy Directive (RED, 2009) has encouraged a
boom in biomass production for energy use. These include solid biomass,
liquid biofuels such as
bioethanol and biodiesel, and biogas.
Accordingly, the biogas
segment, under the feedstock category, is set to grow with the highest CAGR in
terms of revenue as well as volume.
Biomass has numerous advantages, with
the principal benefit being that it cannot be exhausted like fossil fuels. With
an abundance of plants on Earth, biomass has the potential to be a key
renewable energy source used as a sustainable alternative to fossil fuels. The
use of bio-based feedstock can also improve the resilience of rural industries
while profiting the environment by sequestering carbon and replacing
fossil-based fuels.
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the Global Biomass Power Market
Global Biomass Power
Market: Regional Study
Increasing the use of biomass in
the European Union (EU) can help diversify Europe’s energy
supply, consequently encouraging growth and creating job opportunities while
lowering greenhouse gas emissions.
Biomass is also required for
electricity production in the continent in order to balance variable
renewables. The majority of bioenergy in the EU is used by the cooling and
heating industry, consuming approximately 75% of it. Although
biomass originates from various sources, wood is by far the most prevalent.
According to a report by Sandbag
Climate Campaign, the industrial wood production business has
significantly expanded worldwide, with production increasing by more than 50% since 2010.
This is mainly attributed to the substantial demand in Europe, with imports
alone accounting for around a fourth of global production. The easier
conversion of existing coal-fired power plants for burning wood has further
facilitated a sizeable demand for wood pellets.
Over recent years, most of the growth
in Europe’s biomass consumption, especially in former and current coal-fired
plants, has been recorded in Germany as well as the
United States. The industry is also expected to grow significantly as the
coal phase-out gradually accelerates across the continent, with around a
one-fourth of the future capacity projected to be added in the Netherlands,
Spain, Finland, Ireland, and Germany.
Policies in the EU are also encouraging
the use of biomass for energy production. For instance, the new EU
Forest Strategy for 2030, a flagship initiative of the European
Green Deal, contributes to the greenhouse gas emission reduction objectives
of the ‘Fit for 55 Package’. It also enables the EU to deliver on
its commitment to enhancing carbon removals by natural sinks, aligning with the
Climate Law.
As a result, these factors are expected
to provide the Europe biomass power market with
lucrative growth opportunities during the forecast period–-as per Inkwood
Research, the biomass power market in Europe is set to grow with
a CAGR of 6.50% in terms of revenue and 7.57% in
terms of volume during the forecast period, 2024 to 2032.
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Asia’s Position in
the Global Biomass Power Mix
Biomass is a viable source of energy in
Asia, primarily in Japan and Korea, with both countries importing biofuel for
the production of biomass. In addition, several small-scale projects have also
emerged across other nations in Asia-Pacific,
including Vietnam, Malaysia, and Thailand.
Biomass plays a key role in the growth
of the economy, especially in countries largely dependent on biomass for
household applications. In developing countries such as India,
biomass-to-power is also crucial in battling against the harmful process of
straw paddy burning. Aligning with this, various nations, including Australia,
China, and India, have pledged to increase their
respective shares of renewable energy in the power mix to reduce emission
levels.
Japan is also a thriving market,
fuelled by incentive schemes and regulations by the government. Although record
capacity growth is expected in the country over the upcoming years, in the
future, the market is set to undergo similar developments to the European
market, characterized by a transition to smaller projects.
In all, the presence of financial
incentive schemes for renewable power sources in the Asia-Pacific, as well as
programs for cofiring biomass with coal-based power plants, is expected to
further contribute to the overall growth of the global biomass power
market during the forecast period.
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