Bioenergy is stored energy from the sun contained in materials such as plant matter and animal waste, known as biomass. Biomass is considered renewable because it is replenished more quickly when compared to the millions of years required to replenish fossil fuels. Biomass is the biodegradable fraction of products, waste and residues from agri¬culture (including vegetal and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste.

Energy in the form of electricity, heat, steam, and fuels can be derived from these sources through conversion methods such as direct combustion boiler and steam turbines, anaerobic digestion, co-firing, gasification, and pyrolysis. The co-firing method mixes biomass with coal, and may be the best near-term economic opportunity for biomass, particularly in combined heat and power applications, which make the most efficient use of biomass.

Three ways of using the biomass resources constitute the bioenergy sector:

The conversion of biomass solids into liquid or gaseous biofuels is a complex process. Today, the most common conversion processes are biochemical- and thermochemical-based. However, researchers are also exploring photobiological conversion processes. In biochemical conversion processes, enzymes and microorganisms are used as biocatalysts to convert biomass or biomass-derived compounds into desirable products. Cellulase and hemicellulase enzymes break down the carbohydrate fractions of biomass to five- and six-carbon sugars in a process known as hydrolysis. Yeast and bacteria then ferment the sugars into products such as ethanol.

Heat energy and chemical catalysts can be used to break down biomass into intermediate compounds or products. In gasification, biomass is heated in an oxygen-starved environment to produce a gas composed primarily of hydrogen and carbon monoxide. Photobiological conversion processes use the natural photosynthetic activity of organisms to produce biofuels directly from sunlight.