Biomass Power in the US: Market Size, Businesses & Forecast 2026

The US biomass power industry generates electricity by burning organic materials such as wood waste, agricultural residues, and dedicated energy crops. The sector is experiencing moderate growth driven by renewable energy policies and waste-to-energy initiatives, with approximately 14.2 billion kilowatt-hours of electricity generated from biomass in 2022 (EIA). The industry is transitioning toward more sustainable feedstock sources and integrating with other renewable technologies.

Industry snapshot

Key public data points

Historical & forecast

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What does the Biomass Power in the US industry cover?

Biomass power in the US involves converting organic materials into electricity through combustion, gasification, or anaerobic digestion. The industry encompasses facilities that use wood waste, agricultural residues, landfill gas, and dedicated energy crops as fuel sources. Biomass power is classified as renewable energy under federal policies due to its carbon-neutral lifecycle when managed sustainably.

• •In 2022, biomass accounted for 1.4% of total US electricity generation (EIA)
• •The industry operates approximately 350 biomass power plants nationwide with combined capacity of over 6,400 MW (Biomass Power Association)
• •Feedstocks include wood waste (70%), agricultural residues (15%), landfill gas (10%), and energy crops (5%) (DOE)

Who operates in the industry and how is it structured?

The US biomass power sector consists of independent power producers, utility-owned facilities, and industrial cogeneration plants. Market participants range from large energy companies to small-scale biomass facilities serving local communities. The industry has seen consolidation in recent years as larger companies acquire smaller biomass facilities.

• •Approximately 65% of biomass capacity is owned by independent power producers (EIA)
• •Co-generation plants that provide both heat and power represent about 30% of biomass capacity (DOE)
• •The sector employs approximately 18,000 workers directly and indirectly (Biomass Power Association)

What drives demand in the industry?

Demand for biomass power is primarily driven by renewable portfolio standards in multiple states and federal tax incentives. The industry benefits from utilizing waste streams that would otherwise be disposed of, creating additional economic value. Corporate sustainability commitments and carbon reduction targets are increasingly supporting biomass demand.

• •29 states have renewable portfolio standards that include biomass (DSIRE)
• •The federal Production Tax Credit provides $1/MWh for biomass electricity through 2024 (IRS)
• •Industrial demand for process heat from biomass cogeneration represents a significant market segment (DOE)

Who are the notable companies in the industry?

The US biomass power market features several major companies operating across different segments of the value chain. Market participants include traditional power companies, specialized biomass developers, and forestry companies with biomass divisions. The competitive landscape is characterized by moderate concentration in generation but fragmentation in feedstock supply.

• •Dominion Energy operates multiple biomass facilities in Virginia and other states ( Dominion Energy)
• •NextEra Energy has biomass power generation assets as part of its renewable portfolio (NextEra Energy)
• •Veolia Environnement operates biomass-to-energy facilities across the US (Veolia)
• •Duke Energy utilizes biomass in some of its renewable generation facilities (Duke Energy)

What are the recent trends and outlook?

The biomass power industry is evolving toward more efficient and sustainable technologies. There is growing interest in converting biomass facilities to co-fire with hydrogen or to develop advanced biofuels. The sector is also exploring carbon capture and storage technologies to further reduce emissions and enhance environmental credentials.

• •Biomass co-firing with coal facilities has declined as coal plants retire, but new opportunities exist for co-firing with natural gas (EIA)
• •In 2023, the Department of Energy announced $30 million in funding for biomass research and development (DOE)
• •The industry is exploring torrefaction and pelletization technologies to improve biomass transportation economics (Biomass Power Association)

How is the industry regulated?

Biomass power facilities are subject to environmental regulations including the Clean Air Act and state-level air quality standards. The Renewable Fuel Standard program indirectly supports biomass through its renewable energy components. Recent regulatory developments have focused on ensuring sustainable sourcing of biomass feedstocks to prevent deforestation and land-use conflicts.

• •EPA regulates biomass facilities under the Clean Air Act's New Source Performance Standards (EPA)
• •The IRS administers the Section 45 Production Tax Credit for biomass electricity (IRS)
• •The Biomass Crop Assistance Program (BCAP) provides financial incentives for sustainable biomass feedstock production (USDA)

Government, statistical and trade sources used for this Claight analysis.

• EIA Annual Energy Outlook 2023 ·
• DOE Biomass Program 2023 Report ·
• Biomass Power Association Industry Overview 2023 ·
• IRS Energy Incentives Information ·
• DSIRE Renewable Portfolio Standards Database ·
• EPA Clean Air Act Regulations