BY AGLAÉ BANGE
Biomass power is approaching a post-subsidy test. The feed-in tariff, introduced after the Fukushima disaster to accelerate renewable energy investment, helped make biomass projects bankable.
More than a decade later, many assets are midway through their FIT support periods, and operators are weighing how the sector can remain viable once tariffs expire.
This matters because biomass is no longer marginal. It accounted for 4.1% of Japan’s energy mix in 2023, while METI’s latest Basic Energy Plan sees that share rising to 6% by 2040. But with many plants still dependent on subsidy-backed revenue to offset high fuel, logistics and operating costs, the post-FIT era could bring contraction rather than growth.
That concern is more acute since METI abolished FIT support for woody biomass assets above 10 MW this fiscal year. Industry participants report stagnation, and even declining activity, as inflation and rising fuel costs weigh on project economics. The result is a sector caught between policy targets and commercial uncertainty: the mechanisms that supported biomass power growth are being withdrawn before a clear post-FIT model has emerged.
For now, large woody biomass plants still dominate installed capacity. But the more relevant question for the sector’s next phase may be whether smaller, domesticfeedstock projects can develop into a durable alternative. Sewage sludge, municipal waste, agricultural residues and biogas offer an advantage that imported biomass doesn’t: locally sourced fuel.
That makes these projects attractive in an uncertain geopolitical and energy-security environment. Sludge-based plants and farm-scale biogas systems can turn domestic waste streams into power, heat or self-consumed energy, while supporting local economies. But they also show the limits of Japan’s biomass opportunity. Projects are typically small, difficult to scale and often dependent on lengthy subsidy application processes.
Over the next few years, Japan’s biomass sector will need more than broad policy targets. To hold onto existing capacity – and expand toward METI’s 2040 goal – it will need clearer post-FIT support, more workable subsidy frameworks and business models suited to smaller domestic-resource projects. Without that, biomass risks remaining a useful but constrained complement to solar, wind and other renewable energy sources.