The Disadvantages of Biomass—and How to De-Risk Them in Contracts

Disadvantages of biomass are often overlooked when businesses decide to replace fossil fuels. While biomass energy is renewable, it can bring hidden costs, supply risks, and environmental trade-offs. For C-level executives, understanding these disadvantages is crucial before signing new boiler contracts.

What Is Biomass Energy and How Does It Work?

Before analyzing its drawbacks, leaders need to understand how biomass energy functions.

Types of Biomass

Biomass fuel comes from diverse sources, and each has different characteristics.

• Agricultural residues – rice husks, bagasse, sawdust. Energy density 12–14 MJ/kg.
• Wood pellets and chips – more stable, higher density (16–18 MJ/kg).
• Advanced biofuels – biodiesel or biogas, used in cogeneration or liquid-fired boilers.

These variations affect boiler efficiency and CO₂ emissions significantly.

Is Biomass Renewable or Nonrenewable?

Biomass is considered renewable when sourced sustainably. But it can quickly turn nonrenewable if:

• Logging is unsustainable.
• Crop residues are overused, disrupting soil fertility.
• Supply chains lack reforestation commitments.

The IEA warns that without proper governance, biomass projects risk becoming environmentally harmful.

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Main Disadvantages of Biomass Energy

High Operating and Fuel Costs

Is biomass energy expensive compared to fossil fuels? In many cases, yes. While coal prices are more volatile, biomass prices can increase due to seasonality, transportation, and storage. 

In Vietnam, biomass fuel price fluctuations can raise operating expenditure (OPEX) by 10–15% annually. CFOs must factor in long-term contracts and storage infrastructure to stabilize cost.

Carbon Emissions and Air Pollution

Does biomass release carbon dioxide? Yes. Burning one ton of wood pellets emits approximately 1.8 tons of CO₂ (IEA data). While theoretically carbon neutral, emissions at the stack include not only CO₂ but also particulate matter, SOx, and NOx. For industries in urban or export-driven areas, failing to meet QCVN 19:2024 emission standards can result in penalties or even order cancellations.

Supply Chain and Storage Risks

Fuel quality and supply stability are recurring concerns. Moisture content above 15% reduces boiler efficiency significantly. Storage also poses risks—biomass absorbs moisture easily and is prone to biological decay. 

In Bac Ninh, textile factories lost contracts when fuel supply delays prevented them from transitioning away from fossil fuels on time. This underlines why procurement teams must audit suppliers thoroughly.

Technology and Efficiency Limitations

Biomass boilers are typically less efficient than natural gas systems. Average efficiency ranges from 80–87%, compared to 92–95% for gas-fired boilers. More frequent maintenance is needed to manage slagging, fouling, and ash buildup. Without predictive maintenance, downtime risk increases and disrupts production schedules.

Negative Effect on the Environment

Although renewable, biomass can still harm the environment. Unsustainable harvesting of wood residues can lead to deforestation. Overuse of rice husks and bagasse can distort local agricultural markets. Improper ash disposal can pollute waterways. For ESG-focused manufacturers, these risks must be addressed in both procurement and reporting.

>>> Get your free consultation now to assess biomass risks in your factory.

Comparing Biomass with Other Energy Sources

Biomass must be weighed against both fossil fuels and renewables.

Biomass vs Fossil Fuels

• Price stability – biomass contracts can be locked long-term, unlike volatile coal.
• Cost competitiveness – cheaper when sourced locally, but expensive if imported.
• Carbon advantage – lower CO₂ emissions than coal, though higher than gas.

Biomass vs Other Renewable Energy

• Cleanest option – wind and solar produce zero direct emissions.
• Reliability – biomass provides baseload steam, unlike intermittent solar/wind.
• Industrial fit – only biomass offers both steam and power through cogeneration.

How to De-Risk Biomass in Industrial Projects

Despite its disadvantages, biomass can be a viable solution if risks are managed properly.

Smart Contracting

The first step is fuel contracting. Enterprises should secure multi-month supply agreements to avoid seasonal shortages. Contracts should mandate Certificates of Analysis (COA), ensuring each batch meets agreed standards for moisture, ash, and calorific value. This reduces disputes and guarantees performance.

Technology Choices in Boiler Design

Investing in the right boiler technology is critical. Fluidized bed boilers can reach up to 87% efficiency and handle varied fuels. Integrating SCADA and IoT allows real-time monitoring, fault detection, and predictive maintenance. 

These features reduce unplanned downtime and optimize operations. Factories applying digital monitoring reduce OPEX by 5–8% annually.

ESG and Compliance Alignment

ESG is no longer optional. Aligning projects with QCVN 19:2024 emission regulations ensures compliance. Transparent emission reporting also supports ESG disclosures, giving companies an edge in export markets where buyers increasingly demand low-carbon supply chains. Companies with strong ESG practices enjoy a 10–20% valuation premium.

Outsourcing Steam Supply

Another solution is outsourcing. Instead of investing in boiler CAPEX, enterprises can purchase steam directly from providers. For example, NAAN Group supplies steam in Bac Ninh and Hai Duong, allowing clients to focus on production without managing fuel, operations, or maintenance. This model transfers risk from manufacturers to energy specialists while guaranteeing compliance.

>>> Get your free consultation today to explore steam outsourcing models.

FAQ – Biomass Energy in Manufacturing

Is biomass carbon neutral?

Biomass can be carbon neutral if sourced sustainably, because regrowth offsets combustion emissions. However, if fuel is not replanted or harvested responsibly, neutrality is lost.

How much CO₂ is produced by biomass?

Burning one ton of biomass fuel such as pellets produces about 1.8–2.0 tons of CO₂, according to the International Energy Agency. This is lower than coal but higher than wind or solar.

Is biomass energy expensive for factories?

Not always. If sourced locally with stable contracts, biomass can cut costs versus coal. However, reliance on imported pellets or poor-quality fuel often makes it more expensive. Outsourcing steam can mitigate this risk.

About NAAN Group – Your Biomass Partner

NAAN Group is Vietnam’s leading ecosystem for biomass energy solutions.

• Boiler systems: Design, supply, and installation of fluidized bed, chain grate, and cogeneration systems.
• Fuel supply: Biomass fuel from sustainable and certified sources.
• Steam supply services: Long-term outsourcing in Bac Ninh and Hai Duong, reducing CAPEX for clients.
• Operation & maintenance: Professional teams ensuring safe, efficient boiler operation.

By partnering with NAAN, enterprises reduce cost volatility, secure compliance, and accelerate their transition to a Net-zero future.

Conclusion

The disadvantages of biomass—from cost fluctuations to emissions—cannot be ignored. Yet with strong contracting, modern boiler design, ESG integration, and outsourcing models, manufacturers can de-risk their energy strategy. Biomass remains a powerful enabler of Net-zero when managed with precision and expertise.

>>> Contact NAAN today to secure a low-carbon steam solution tailored to your factory.