Biomass and Renewable Energy



Biomass is a renewable energy source that is derived from plant and animal materials such as crops, forestry residues, and agricultural waste. The global biomass power market size will have reached USD 31.92 billion by the end of 2022 on robust wood chips and pellets sales, partly owing to higher gas prices resulting from the Russian-Ukrainian war. As a result, the total market size is forecast to reach USD 39.3 billion by 2028.

Global Biomass Power Generation Market By Region

Biomass for power generation provides a low-carbon, sustainable alternative to fossil fuels while allowing local communities to use domestic biomass resources. In addition, it makes productive utilization of wood manufacturing wastes, the unused portion of urban waste and crop residues.


In 2021, the global biomass power plant assets increased by around 120 plants with a combined capacity of almost 2.9 GWel. Following the trend of recent years, Asia is the strongest region, with capacity growth of 1.6 GWel in 2021, followed by South and Central America and Europe. For the forecast period of 2021-2030, Ecoprog expects more than 1,500 plants with a combined capacity of approximately 23.2 GWel to become operational worldwide.      

Around 1.1 GWel of additional capacity was installed in China and India alone. In both countries, ecoprog expects the growth rates to remain high due to existing support schemes and the agricultural biomass potential. In India, biomass-to-power also plays a role in fighting against harmful straw paddy burning. In this context, the co-incineration of biomass in coal-fired plants will be supported. China plans to increase the competitiveness in its support scheme, which is why a more dynamic development is expected in the coming years.        

Japan is a ‘booming’ market, triggered by the attractive incentive scheme implemented in 2021. As a result, Japan expects record capacity growth for the next five years. Japan depends heavily on biomass imports. In addition to the supply of agricultural biomass through Southeast Asian countries, US pellet producers have also entered the market in Japan to meet the growing demand.


Malaysia, with its abundant agricultural resources, has the potential to become a significant producer of biomass-based energy. Malaysia also generates a substantial amount of biomass waste as a prominent player in the palm oil industry, which presents a great potential for this biomass to be commercialized in a wide range of biomass-based products. Hence, in recent years, there has been a growing interest in the business potential of biomass in Malaysia due to its various economic and environmental benefits.

One of the primary benefits of biomass is its ability to provide a sustainable and cost-effective source of energy. Malaysia’s biomass resources are diverse, ranging from oil palm biomass to rice husks and sawdust. This diversity of feedstock allows for the production of a wide range of biomass-based products, including biofuels, biogas, and biomass pellets. With the rising global demand for renewable energy, Malaysia’s biomass industry has the potential to become a key player in the global bioenergy market.

Another advantage of the biomass industry is its potential to create new jobs and drive economic growth. The Malaysian government has recognized this potential and has implemented policies to encourage the development of the biomass industry. The National Biomass Strategy 2020 aims to create a sustainable biomass industry that contributes to economic growth while promoting environmental sustainability and enhancing the competitiveness of the Malaysian biomass industry in the global market. The strategy includes various measures such as financial incentives and regulatory frameworks to support the development of the biomass industry.

In addition to its economic benefits, biomass also offers significant environmental advantages. The use of biomass-based energy reduces greenhouse gas emissions and helps to mitigate climate change. Malaysia’s biomass industry can play a crucial role in reducing the country’s reliance on fossil fuels and promoting sustainable energy production.


The growth of the industrial biomass boiler industry and the growing focus on sustainable development will also continue to support the growth of the Asia Pacific biomass energy industry. As a result, the Asia Pacific industrial biomass boiler market is projected to be up-surging due to the growing adoption of biomass-based energy sources.

This growing adoption is due to the depletion of fossil fuel supplies and increasing energy demand across countries such as China, India, and others. In addition, the favourable government policies enabling thermal power plants to move from coal to cleaner fuels, such as biomass, are projected to play a crucial role in demand growth over the future.

Bioenergy decreases reliance on fossil fuels, mitigate greenhouse gas (GHG) emissions, and increases the reliability of the energy supply. Moreover, the decrease in coal use and the increasing use of wood biomass for distributed electricity generation is anticipated to impact the industry landscape positively. Developing economies are the major countries indulged in adopting energy-efficient fuels, which drive market development. Furthermore, the growing demand for energy-efficient fuels like biomass would also lead to the increasing acceptance of biomass energy, propelling the demand for biomass energy in the coming era.


In conclusion, the business potential of biomass in Malaysia is significant, with its abundant resources and favourable policies, coupled with a rising demand for biomass as a renewable energy source. The biomass industry has the potential to provide a sustainable and cost-effective source of energy while creating new jobs and driving economic growth. The industry can also contribute to mitigating climate change by reducing greenhouse gas emissions.

On the domestic front, measures to promote and increase the share of renewable energy (“RE”) in line with the Five-Fuel Diversification Policy have been developed since 2000. These measures will collectively reduce overall energy sector emissions intensity and enhance domestic energy self-sufficiency as imported non-renewable sources of energy are substituted with indigenous sources of renewable energy in the primary energy mix. Likewise, the implementation of the National Biomass Strategy 2020 is expected to contribute significantly to the country’s economic growth, reduce dependence on fossil fuels, and mitigate the impacts of climate change.

Moreover, global trends in fuel switching, such as the transition from internal combustion engine vehicles to electric vehicles (which will result in decreased demand for petroleum products and increased demand for electricity) are also expected to permanently influence the global primary energy mix and contribute to enhanced demand for biomass within the energy sector.

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