Southeast Asia Biomass Energy Market Growth Analysis - Forecast Trends and Outlook (2025-2034)

The Southeast Asia biomass energy market is projected to grow at a CAGR of 7.60% between 2025 and 2034. The market is being driven by the growing focus on decarbonisation in the region.

Southeast Asia Biomass Energy Market Growth

Most countries in Southeast Asia have committed to decarbonisation by 2050 and have established national energy transition frameworks. The region will require a minimum of $367 billion over the next five years to remain on track with its decarbonisation objectives. As the most populous nation in Southeast Asia, Indonesia represents 40% of the region's total energy consumption. The National Electricity Supply Business Plan for Indonesia, covering the period from 2021 to 2030, anticipates an annual growth in energy demand of 4.9%, with a notable increase in electricity requirements in both the industrial and residential sectors.

The Philippine Energy Plan for 2020-2040 sets forth ambitious targets for emission reductions over the coming decades, aiming for a 75% decrease in emissions by 2030. Additionally, Vietnam has set a target to achieve carbon neutrality by 2050, with renewable energy expected to account for 75% of its electricity generation by 2045. Singapore, the smallest yet wealthiest country in Southeast Asia, has set ambitious goals to reach net-zero emissions by 2050. It is the only Southeast Asian nation projected to achieve a reduction in emissions by 2030 compared to 2019 levels.

Biomass energy plays a crucial role in assisting these countries in meeting their sustainable energy objectives by offering a renewable and low-carbon substitute for fossil fuels. It mitigates greenhouse gas emissions, facilitates waste recycling, and bolsters energy security by utilising local resources. Through the production of electricity, heat, and biofuels, biomass enriches the energy portfolio, fostering environmental sustainability and economic growth. Its contribution to decreasing reliance on non-renewable resources is in harmony with international climate and energy goals.

Key Trends and Developments

Growing energy demand, supportive government policies, rising environmental concerns, and technological advancements and innovations are the major trends impacting the Southeast Asia biomass energy market growth.

March 2024

The officials from Tuyen Quang province in northern Vietnam, in collaboration with Japan's Erex JSC, initiated the construction of the Erex Sakura Tuyen Quang biomass fuel facility, with a total investment exceeding VND 478.8 billion (€18.7 million).

May 2023

Vietnam sanctioned the National Power Development Master Plan for the period of 2021 to 2030 (Master Plan VIII), designed to significantly enhance the development of renewable energy sources, targeting a contribution of approximately 67.5% to 71.5% of the total electricity generation by the year 2050.

Growing Energy Demand

The demand for sustainable and renewable energy sources, such as biomass, is propelled by several interrelated factors, primarily driven by swift economic expansion and rising energy consumption. As economies grow, there is an increasing need for energy to support industrial activities, transportation, and residential needs.

Supportive Government Policies

Government policies that provide support, along with subsidies and incentives for renewable energy initiatives, play a crucial role in promoting investment in biomass energy projects. These policies include financial incentives such as tax credits, grants, and low-interest loans, which lower the financial barriers for businesses and individuals looking to invest in biomass energy.

Rising Environmental Concerns

The growing awareness of climate change and its multifaceted impacts has prompted a revaluation of energy sources and practices. Biomass energy emerges as a promising alternative that not only addresses environmental concerns but also supports public health and economic resilience.

Rapid Technological Advancements

Advancements in biomass conversion technologies have significantly improved the efficiency of converting organic materials into usable energy forms, such as biofuels, biogas, and electricity. These technological innovations encompass a range of processes, including gasification, anaerobic digestion, and enzymatic hydrolysis, which have been optimised to maximise energy output while minimising resource input.

Availability of Agricultural Residues

The substantial agricultural operations in the region yield a plentiful supply of biomass feedstock, which plays a crucial role in supporting various sectors and promoting sustainable practices. This biomass feedstock includes a diverse array of materials, such as rice husks, which are the protective coverings of rice grains, and sugarcane bagasse.

Rising Investment in Renewable Energy

The growth of the market is significantly propelled by the increasing investments from both private and public sectors in renewable energy initiatives. This surge in funding is driven by a combination of factors, including the urgent need to transition away from fossil fuels, the growing awareness of climate change, and the desire for energy security.

Southeast Asia Biomass Energy Market Trends

The increased efficiency and reduced costs make biomass energy more competitive compared to traditional fossil fuels and other renewable energy sources. As biomass energy becomes more economically viable, it attracts greater investment and interest from both the public and private sectors. This, in turn, fosters further research and development, leading to a virtuous cycle of innovation and improvement in biomass conversion technologies.

Furthermore, the region's agricultural operations provide a rich and diverse supply of biomass feedstock, including rice husks and sugarcane bagasse, which can be harnessed for various sustainable applications, thereby fostering economic growth and environmental stewardship.

The biomass energy sector is experiencing significant growth, contributing to job creation, economic development, and a reduction in greenhouse gas emissions. This momentum is expected to continue as more stakeholders recognise the importance of sustainable energy solutions and the role that biomass can play in achieving a cleaner, more resilient energy future.

Southeast Asia Biomass Energy Industry Segmentation

Southeast Asia Biomass Energy Market Report and Forecast 2025-2034 offers a detailed analysis of the market based on the following segments:

Market Breakup by Source:

• Wood Chips / Pellets
• Agricultural Crops and Residues
• Animal Residues
• Municipal Solid Waste and Sewage
• Others

Market Breakup by Segment:

• Renewable
• Non-Renewable

Market Breakup by Type:

• Solid Biomass
• Liquid Biomass
• Biogas

Market Breakup by Application:

• Commercial
• Industrial
• Others

Market Breakup by Country:

• Indonesia
• Malaysia
• Philippines
• Vietnam
• Thailand
• Others

Southeast Asia Biomass Energy Market Share

Based on application, the market is segmented into commercial, and industrial, among others.

The industrial sector is projected to grow at a CAGR of 8.4% during the forecast period of 2025-2034. In the industrial sector, biomass energy serves as a source for producing steam and electricity, thereby decreasing dependence on fossil fuels, minimising operational expenses, and promoting sustainability through the conversion of waste to energy and the reduction of emissions.

Leading Companies in the Southeast Asia Biomass Energy Market

Major players are focusing on the adoption of cutting-edge technologies to gain a competitive edge in the market.

• Yokogawa Electric Corporation
• Thermax Limited
• Mitsui E&S Engineering Co., Ltd.
• Hitachi Zosen Corporation
• DP CleanTech
• Others

The comprehensive report looks into the macro and micro aspects of the market. The report gives an in-depth insight into the market by providing a SWOT analysis as well as an analysis of Porter’s Five Forces model.