Biomass energy in New Zealand

Biomass makes up around 7% of total primary energy use in New Zealand. 73% of this is used in the industrial sector (mainly wood product manufacturing and pulp and paper manufacturing) for process heat and some electricity co-generation.

The remaining 13% is used for heating in residential households. Use of biomass as a direct use energy source is expected to increase in New Zealand as it is a low emission and affordable renewable fuel source.

In New Zealand, biomass is primarily used as a direct fuel source rather than for electricity generation. 2021 data is sourced from MBIE. Future indications come from the Climate Change Commission and New Zealand Energy Scenarios TIMES-NZ 2.0 modelling.

  • 7 %


  • 12-14 %


How does biomass energy work?

Biomass is organic material – such as wood and wood waste, crops or animal manure – that can be used as an energy source. 

Biomass energy is when biomass derived from plants or animals is used (directly or transformed) as a fuel. Biomass energy can take many forms beyond forestry waste, such as fast-growing forests (15 years) dedicated to energy use, or short rotation crops (1 to 3 years) on flat lands.

There are many potential sources of biomass energy, including:

  • Wood and wood waste – wood chips, wood pellets, forest residues, logs, sawdust and pulp
  • Biogenic materials – paper, wool, cotton and food waste
  • Crops and waste materials – corn, sugar cane, woody plants and algae
  • Animal manure and human sewage (usually to produce biogas)

Biomass contains stored energy from the sun, absorbed by living organisms (plants or animals) through a process called photosynthesis. Like other carbon sources, when biomass is burned, the stored energy is transformed into heat energy. However, unlike carbon emitted when burning fossil fuels, the carbon emitted when burning biomass is partly or wholly equivalent to the amount of carbon captured or sequestered from the atmosphere by the plants prior to being harvested directly.  

Most commonly, the conversion of biomass into energy is done through combustion of biomass directly in a biomass boiler, but it can also be done by converting biomass into biofuel or biogas.  

Biomass boilers can be used for hot air, hot water and steam for industrial process heat and space heating in buildings. It can also be used for co-generation where steam is used first in a turbine to make electricity and then used in an industrial process.  

How climate-friendly is biomass energy?

The main difference between biomass and fossil fuel is that biomass is part of the short carbon cycle, meaning that the carbon released when the biomass is burned comes from the atmosphere, not from underground carbon deposits which have taken thousands of years to form.

If the use of biomass is sustainable, plants will recapture the same amount of carbon when growing back. Biomass is regarded renewable if it is sustainably sourced and efficiently used. Most of our forests in New Zealand are sustainably managedevidenced by certification through the Forest Stewardship Council (FSC) or the Programme for the Endorsement of Forest Certification (PEFC).

Conversely, deforestation (harvesting forests without replanting) increases carbon dioxide concentration in the atmosphere, as the trees won’t be there to recapture the carbon released.

Learn about the global carbon cycle(external link)

The future of biomass energy in New Zealand

In New Zealand, energy from biomass is typically used for space heating, steam and electricity (co-generation) or industrial process heat (steam and hot water applications). Biomass is mainly used in the wood processing and pulp and paper sectors where biomass is part of their process already. 

Biomass use in New Zealand is expected to grow due to the advantages associated with the energy source – this includes New Zealand’s well-developed successful forestry sector and good plant growing conditions with space to grow trees. In addition, it is low emissions and affordable making it a valuable part of our total energy mix. We expect to continue to see businesses shift to biomass for process heat and other industrial/commercial needs, supported through Government funding and support programmes. 

Wood pellets for the biomass boiler at Fonterra's Te Awamutu dairy factory.

Advantages and limitations of biomass energy


  • Supply and sustainabilityNew Zealand has a well-developed successful forestry sector and good plant growing conditions with space to grow trees, meaning that biomass use in New Zealand is a good option from both supply and sustainability perspectives.

  • Forest waste useForest waste can be used for biomass which means that less forest residue is left in the forest that would have decomposed into methane in a natural cycle. Methane gas has 28 times higher global warming potential than carbon dioxide over a 100-year period.

  • Low emissions and renewableBiomass can be a low emissions renewable energy source if sourced sustainably. Ministry for the Environment data shows that replacing coal with biomass in a boiler can reduce overall emissions (CO2 equivalent) up to 98%.

  • AffordableBiomass can be an affordable energy source as an increasing carbon price has little effect on biomass price due to its low emissions factor. In addition, no grid connection or electrical infrastructure upgrades are required which can make biomass decarbonisation fuel switching projects more affordable than electricity if there is limited electrical supply.


  • Life cycle impactEnvironmental life-cycle impacts need to be considered to ensure the biomass energy is from a sustainable source.
  • Storage considerationsBiomass fuel requires a large dry storage and handling area as it has a lower energy density (both by mass and volume) than coal.
  • Supply considerationsDue to the low energy density of biomass (i.e. large volumes are required), it is important to find a supply close to the end use. This can be challenging with the emerging biomass market as not every region has a large biomass supply, and therefore can lead to higher transport costs, and higher emissions if the biomass is sourced from outside the area. Biomass fuel supply is finite, and prices may fluctuate if demand and supply vary. Obtaining a firm contract price for biomass fuel supply is recommended prior to committing to a new biomass technology.

EECA and biomass energy

EECA has co-funded a series of projects to support businesses and the public sector to switch from fossil fuelled boilers to biomass boilers – such as Fonterra.

Fonterra | Coal boiler conversion

EECA’s expanded Government Investment in Decarbonising Industry (GIDI) fund now includes investment in renewable energy fuel supply infrastructure including biomass. Co-funding is one of our levers used to help us reach a low carbon future, by incentivising businesses to make the switch to clean and clever energy.

About the GIDI Fund

EECA’s Regional Energy Transition Accelerator (RETA) aims to develop and share a well-informed and coordinated approach for regional decarbonisation. The Southland RETA, for example, highlights regional opportunities for switching to biomass.

About RETA

EECA continues to work closely with MBIE and other government agencies to ensure evidence-based decision making and government policies. This includes supporting the development of the Bioeconomy Framework which will feed into the Government’s New Zealand Energy Strategy that will be pivotal in informing future bioenergy needs.

  • Find more information about biomass energy on the Science Learning Hub website.

  • In 2021, EECA commissioned Sapere to prepare an independent report to gain an overview of the role liquid biofuels could play in decarbonising New Zealand’s transport sector.

The switch to biomass

Biomass energy for business

Is solid biomass the right fuel for your business? And which type is best for you?