This Is How Biomass Energy Has Become a Profitable Business
In recent years, the transition to renewable energy has gained momentum in Colombia, and biomass has emerged as a key alternative to diversify the country's energy matrix.
Thanks to its abundant resources and strong government incentives, biomass energy has evolved from an emerging option to a profitable industry with vast investment opportunities. Discover the factors behind the success of this dynamic sector and how it is shaping Colombia’s green energy future.
What Is Renewable Biomass Energy?
Biomass energy is obtained from organic materials, including agricultural, forestry and industrial waste, resources that Colombia possesses in abundance due to its thriving agricultural sector. This alternative energy is clean, renewable, and enables efficient waste management by converting organic matter into electricity and thermal energy through specialized technologies.
Biomass energy reduces carbon emissions and offers a sustainable alternative for energy production. With proper investment in technology and infrastructure, biomass can play a crucial role in the transition to a low-carbon economy. To fully harness its potential, a solid and innovative infrastructure is essential, along with continued advancements in research and development.
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Colombia's Commitment to Renewable Energies
Undoubtedly, Colombia's commitment to sustainability is a factor that has driven the renewable energy market in the country. Colombia has taken a firm stance in the transition to clean energy, aligning itself with the Sustainable Development Goals (SDGs) and establishing policies to create renewable energy incentives.
In addition, Colombian legislation has favored the development of projects with biomass through tax benefits and other incentives that make investing in sustainable projects in the country very attractive for an international investor, which has positioned Colombia as a leading country in sustainability and renewable energy in Latin America. These are some of these incentives:
1. The sale of electricity generated based on wind, biomass or agricultural waste, solar, geothermal, or sea energy will be exempt from income tax for 15 years, starting in 2017.
2. Investments destined to research, development and production of electric energy with non-conventional sources will be eligible for a 50% deduction of their income tax.
3. Equipment, machinery and services for the production and use of non-conventional sources, as well as the measurement of potential resources and efficient energy management, are exempt from VAT.
Discover other benefits for renewable energies here.
Key Factors Driving Biomass Profitability in Colombia
1. Privileged Geographical Location
Colombia has favorable climatic and geographic conditions for the development of biomass energy. The abundance of natural resources allows the use of agro-industrial waste, such as rice husks and forest residues, for clean energy generation. In addition, the power of the sun, the strength of the wind and the wealth of water make the country an ideal destination for renewable energies in general.
According to the Mining and Energy Planning Unit (UPME), Colombia has the potential to supply 46% of its national energy demand with biomass, which represents more than 500,000 TJ per year, thanks to these resources and its infrastructure.
2. Developed Infrastructure for Renewable Energies
Infrastructure is another key factor for the development of biomass energy, as for any other type of renewable energy. This is something in which Colombia has experience, as it already has infrastructure for wind, solar and hydropower.
In addition, in recent years, the country has taken its first steps towards the development of infrastructure for offshore wind energy and green hydrogen, two sectors in which we have great potential thanks to the national territory’s geographical advantages.
An outstanding case in terms of infrastructure is the Arroz Diana biomass plant, which has not only reduced dependence on fossil fuels, but has also optimized the use of agro-industrial waste, generating employment and promoting sustainable development in the region.
This was the first biomass thermal plant in the country, located at the Arroz Diana plant in Yopal, which generates 7.1 MW from rice husks, a very precise example of how this type of energy works.
An investment opportunity with high potential
The biomass energy market in Colombia is growing, and with the support of favorable policies and a growing demand for sustainable energy sources, it is positioned as a sector with a promising future.
Beyond being a profitable venture, investing in biomass energy contributes directly to the country’s sustainable development and environmental goals. Biomass is particularly attractive for industries looking to reduce their carbon footprint while maintaining high energy efficiency.
For investors seeking strategic projects in a dynamic and growing industry, biomass energy in Colombia presents a compelling opportunity. The sector offers a combination of profitability, sustainability, and bioenergy innovation, making it an attractive choice for forward-thinking businesses.
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