BackBy Manuel Barros, CEO at Centrais de Biomassa do Norte (CBN), a Marguerite portfolio company
Energy from biomass is now a key part of Portugal’s modern renewable energy strategy, evolving from a traditional, decentralised resource to a key player in the nation’s push for reduced carbon emissions and energy independence.
This shift began in the early 2000s, driven by government policies and subsidies that encouraged the construction of dedicated biomass power plants. Today, the sector is primarily powered by the industrial forestry and pulp and paper industries, which use leftovers like bark and wood waste to generate heat and electricity, often selling excess energy back to the national grid.
The expertise of companies like CBN, which operates two biomass power plants in Viseu and Fundão, is at the forefront of this evolution. These facilities are not just producing energy; they are integral to a sustainable, circular economy model that provides a new income stream for rural communities.
Portugal’s energy mix and impact on the economy and society
Biomass accounted for approximately 6% of Portugal’s total electricity use in 2024. While a smaller player than hydropower (28%) and wind power (27%), its significance grows when considering its contribution to heat production. In 2023, biomass made up about 42.5% of all energy produced from renewable sources in Portugal, surpassing all other individual renewable sources.
Overall, biofuels and waste represented approximately 14.4% of the country’s total final energy consumption in 2023, with a significant amount used for heating in industrial and residential settings. This dual purpose makes it a cornerstone of Portugal’s efforts to reduce its reliance on fossil fuels.
Biomass projects can have a significant economic and social impact, particularly in rural areas. They create jobs not only at the plant but throughout the entire supply chain, including in agriculture, forestry, transportation, and processing. This diversifies local economies and provides a new, stable source of income for communities that depend on agriculture and forestry.
These facilities also stimulate local businesses, attract new investment, and generate tax revenue for local, state, and national governments. Research has shown that biomass plants can even lead to an increase in average wages for formal workers in a municipality. In fact, about 70% of all revenues from these projects stay within the local economy.
Compared to solar or wind, biomass plants generally create more local jobs per megawatt because they need people to build and run them, while solar and wind projects create jobs mainly during construction but have fewer ongoing operational and maintenance roles. Additionally, while the initial investment for a biomass plant can be high, it provides a stable source of baseload power that can operate 24/7, unlike intermittent sources like solar and wind.
Forest sustainability and fire prevention
Biomass plants play a crucial role in Portugal’s forest sustainability and fire prevention efforts. At CBN, we use residual biomass — including forestry waste, pruning remains, and wood that would otherwise be left on the forest floor — as our feedstock. Collecting this material reduces the amount of flammable material (fuel load) in the forest, which is a critical step in preventing the spread of wildfires.
The plants also create a market for this residual biomass, providing an economic incentive for landowners and forestry companies and a financial reason to actively manage and clean forests.
By using what would otherwise be considered waste, we contribute to a circular economy. The ash produced from biomass combustion is used as an organic fertiliser, returning nutrients to the soil and reducing the need for synthetic fertilisers.
The future outlook
Looking ahead, biomass will remain an important part of Portugal’s energy transition. While sector-wide discussions focus on sustainable sourcing and the repurposing of former coal assets, our own attention is on exploring opportunities to capture biogenic CO₂ from operations. Such CO₂ could potentially be used in the production of e-fuels, offering a way to further enhance the sector’s contribution to decarbonisation.
These innovations can provide higher-value applications for biomass waste and help to capture carbon, which could make our plants carbon-negative. The development of advanced biofuels from non-food sources could also provide a renewable alternative for the transportation, maritime, and aviation sectors.
Importantly, as a smaller, local biomass plant, we support efforts to generate energy locally, directly serving the communities where we operate.
The Centrais de Biomassa do Norte (CBN) is a Marguerite portfolio company. It comprises two biomass power plants producing renewable electric energy: the Viseu Biomass Power Plant and the Fundão Biomass Power Plant in rural areas in northern Portugal. We invested in CBN in 2017.