It’s no secret that biomass energy—the notion that we can spin our piles of wood chips, corn husks, and even algae into electricity—has been knocking politely at the door of clean energy’s main stage for years. Investors have been telling themselves a tidy little story: that advanced biofuels and bio-based chemicals, with the right innovations, might someday stand shoulder-to-shoulder with solar and wind. Yet so far, the business of turning plants into power is only as stable as the policy environment around it. In this guide, we’ll explore the 7 biomass energy stocks that investors should have on their radar.
On one hand, biomass energy’s allure is easy to appreciate. Burning waste byproducts to create a steady, dispatchable power supply that doesn’t rely on endless sunshine or a steady breeze sounds like a golden ticket. Government incentives for renewable fuels, combined with a global hunger for energy sources not named oil or coal, keep propping the sector up. It’s green in spirit, green in subsidies, and—if you squint—maybe green in the bottom line one day. Some emerging companies claim breakthroughs in converting everything from pine sawdust to sewage sludge into a form of liquid gold. But their fundamentals often rest on the kindness of regulators and a delicate supply chain that can turn financially fickle if, say, the price of a certain feedstock suddenly doubles.
For interested investors sizing up the quirky range of biomass energy stocks, the terrain is tricky. It’s a world of small-cap outfits with dazzling technology demos, yet modest track records when it comes to scaling. There are multi-decade bets buried in here, waiting for a patient hand. The big question: Are you comfortable walking into a market that can, quite literally, go up in smoke if the underlying policy support or feedstock economics shift? If so, proceed with your eyes wide open.
Note: We make every effort to keep our info accurate and up-to-date. However, emerging tech moves fast and company situations can change overnight. This guide is an intro to the biomass energy market; but ultimately, do your own due diligence before taking action.
Gevo, Inc. (NASDAQ: GEVO)
Gevo (GEVO) produces sustainable fuel and advanced biofuels for aviation partners looking to reduce carbon emissions.
Gevo is an earnest startup in the world of biomass energy stocks that wears its lab coat proudly. Hailing from Colorado, Gevo staked its claim on creating advanced biofuels. These include sustainable aviation fuel (SAF) from non-edible feedstocks like industrial corn starch and, going forward, cellulosic biomass. At first blush, Gevo is something like the biotech darling story. The commercial scale isn’t quite there yet, but the partnerships and deals strike all the right chords.
The numbers tell a tale of anticipation. Gevo’s investors aren’t banking on last quarter’s balance sheet as much as the possibilities looming on the horizon. The company’s most hyped initiative, dubbed Net-Zero 1, aims to produce around 45 million gallons per year of net-zero carbon SAF by 2025-2026. Airlines—real ones with recognizable logos—have inked memoranda of understanding and off-take agreements. Delta Air Lines signed up for 75 million gallons of SAF over seven years, while airlines like British Airways have expressed interest. This is the gold star on Gevo’s report card: a future pipeline of demand that, if ever realized, could transform the company from a scrappy R&D shop into a serious player.
Still, scaling advanced biofuels is no picnic. The technology is sound, but the economics hinge on regulation like renewable fuel credits, tax credits, and net-zero mandates. These are not permanent fixtures of the energy landscape. Cash burn is continuous, and full commercialization has so far remained a few steps away on the horizon. But if you’re an investor who believes that the aviation industry will eventually have to pay for its carbon sins, Gevo looks like a sinner’s absolution: well-positioned to supply the greener fuels that will be demanded by regulators and customers alike.
Aemetis Inc. (AMTX)
Aemetis (AMTX) utilizes orchard waste and dairy methane to produce low-carbon fuels, tapping into regulatory incentives.
Aemetis, founded in 2006, is a relatively pure-play biomass energy stock. The company’s main line of business—biofuels, notably renewable ethanol and biodiesel—originates from feedstocks that run the gamut from traditional corn to orchard waste. They’ve got a 65 million-gallon-per-year ethanol plant in Keyes, California, plus a rapidly evolving pipeline of renewable natural gas (RNG) projects sourced from local dairy farms.
While Aemetis has seen revenues hover north of $200 million in certain quarters, profitability has been elusive. This is not an anomaly given the notoriously thin margins and capital expenditures in this sector. That said, what makes Aemetis worthy of attention is their integrated approach: they’re not just making fuel, they’re building an ecosystem. The California Biofuel Center, for instance, ties orchard waste gasification to ethanol production, potentially trimming feedstock costs while qualifying the company for California’s Low Carbon Fuel Standard (LCFS) credits.
In 2023, Aemetis claimed carbon intensity (CI) scores that would make even the strictest regulators blush—some where the CI is better than 50% below gasoline baseline. Given the state mandates and potential federal incentives, Aemetis stands at a place where regulation and technology can intersect to yield real economic advantage.
Still, you can’t ignore the risk. The company’s balance sheet has historically leaned heavily on debt, and the future hinges on their ability to execute big, capital-intensive projects. Their planned carbon capture projects or the expansion into advanced renewable diesel will be worth watching. The wager: If biomass energy is going to evolve past “just another subsidy-driven business,” companies like Aemetis will need to (and are positioning to) prove it.
Green Plains Inc. (GPRE)
Green Plains (GPRE) is transitioning to a biorefinery model, extracting higher-value products like proteins and oils.
From some angles, Green Plains is the seasoned pro still trying to reinvent itself. Based in Omaha and once known simply as “the ethanol guys,” Green Plains has watched the biomass landscape morph from a straightforward biofuel story into something far more nuanced. They have the scale—14 bio-refineries and over a billion gallons of production capacity in their heyday—and they have a balance sheet that’s weathered more than a few storms. But scale alone doesn’t cut it anymore. You’ve got to adapt.
And adapt they have. Green Plains is knee-deep in a transformation from a commodity ethanol producer into a diversified biorefinery platform. They’re investing heavily in extracting high-value proteins from the fermentation process, pivoting into feed ingredients that promise thicker margins and greater pricing power. If ethanol is the razor-thin business that leaves you begging for government lifelines, then protein—and related bioproducts—just might be the salvation. In early 2023, the company was boasting about yields and partnerships—think fluidized bed reactors and cutting-edge fermentation technologies—that could turn every gallon of ethanol into a veritable Swiss Army knife of valuable outputs.
Revenues have historically hovered in the $2 billion range, but the meaningful number going forward might not be top-line ethanol sales. It could be their margin per gallon, now enhanced by these ancillary products. They are also inching into renewable corn oil—used for biodiesel—and RNG projects. The result: a portfolio of products that spread risk and don’t rely solely on the EPA’s next move.
Green Plains’ bet is that the next stage of biofuels isn’t just about ethanol. It’s about building entire value chains out of that original fermentation process—proteins for animal feed, carbon dioxide for industrial uses, renewable oil, and maybe one day other advanced biomaterials. They’ve recognized that the old model of “turn corn into fuel and hope for the best” isn’t sustainable. Instead, they’re trying to become the kind of vertically integrated, technology-driven operation that can pivot on a dime.
For investors, Green Plains’ transformation is the big story: will these moves meaningfully reduce dependence on volatile ethanol margins, or is this just another repackaging? If they succeed, Green Plains won’t just be another biofuel stock; they’ll be proof that you can spin biomass into a host of products that are more than just a hedge on government regulations.
OPAL Fuels (OPAL)
OPAL Fuels (OPAL) converts methane emissions from landfills and dairy farms into renewable natural gas.
OPAL Fuels is a smaller, newer biomass energy stock that’s taking a different approach: turning waste into renewable natural gas (RNG). To understand OPAL, imagine an ecosystem of dairy farms, landfills, and food waste facilities. These places all share one thing in common: they produce methane, a greenhouse gas far more potent than CO₂ in the short term. OPAL’s business is to capture that methane before it escapes into the atmosphere and refine it into RNG, which can be used as a transportation fuel, especially in heavy-duty trucking fleets.
OPAL began trading publicly via a SPAC merger in mid-2022. Since then, it has quietly positioned itself as a bridge between today’s established natural gas infrastructure and tomorrow’s cleaner energy mandates. The EPA’s Renewable Fuel Standard and Low Carbon Fuel Standard credits from states like California make the RNG economics pencil out. Revenues are modest but growing: in the third quarter of 2024, OPAL reported roughly $84 million in revenue, a number that may seem paltry by energy giant standards, but it represents a scalable growth story. The company’s project pipeline includes about 20 RNG facilities—existing, under construction, or in development—poised to triple output in the next few years.
The upside? A stable, regulated credit environment and increasing corporate pledges to curb carbon footprint could push more fleets to adopt RNG as a cleaner drop-in replacement for diesel. The downside? Volatility in environmental credits and the slow pace at which the heavy-duty transportation sector turns over its fleet. RNG isn’t the glamorous poster child of the clean energy transition. There’s no big “net-zero” tagline here, just the gritty, unglamorous task of harvesting methane from piles of garbage and manure. But in this market, gritty may be good.
Drax Group plc (DRXGF)
Drax Group (DRXGF) has shifted from coal to biomass and carbon capture, aligning with government incentives.
Consider a company that once defined itself as a coal-burning Goliath, now trying to wedge itself into a world where dirty carbon is outdated. Drax Group, the UK-based power generator, is that Goliath mid-transformation. Its flagship facility in North Yorkshire, once the largest coal-fired power station in Western Europe, has now recast itself as a biomass burner. It churns through millions of tons of compressed wood pellets each year—most shipped in from forests in the American South.
On paper, Drax has become Europe’s largest single-site renewable power producer, generating roughly 12% of the UK’s renewable electricity. This is a clever trick: take a legacy infrastructure, rip out the coal feedstock, and feed in “sustainable” biomass—chunks of wood—heavily subsidized by the UK government and counted as carbon-neutral.
In the market’s eyes, Drax has pulled off an environmental sleight of hand. The share price has seesawed in recent years as investors try to gauge the sincerity of this pivot. The company recorded revenues of £7.8 billion in 2023, boosted by elevated electricity prices. But what investors really need to know is how much of that is tethered to government subsidies that may not be carved in stone forever. Regulatory scrutiny is rising, as researchers question the lifecycle carbon intensity of pellet imports and ask whether Drax’s “green” electricity is as green as advertised.
Despite that, Drax is pushing on. It plans to capture and store the carbon it produces, turning it into a net-negative carbon power station. The company’s recent investments in bioenergy with carbon capture and storage (BECCS) could unlock billions in future government support if the technology pans out—and if the politicians keep writing checks. In the meantime, Drax’s biomass experiment is a monument to what investors value: a stable yield underwritten by regulation and a narrative that places the company on the “right side of history.”
Alto Ingredients, Inc. (ALTO)
Alto Ingredients (ALTO) refines ethanol and related outputs into high-value specialty alcohols and feed products.
Take a venerable player, give it a new name, and hope some of the rough edges disappear. That’s Alto Ingredients, formerly known as Pacific Ethanol. In its prior incarnation, the company was a pure ethanol commodity story: buy cheap corn, refine it, sell the ethanol, and hope government mandates remain in your favor. But ethanol margins are about as stable as a Hollywood marriage. Alto’s rebrand into a biomass energy stock wasn’t just cosmetic. It was a real attempt to pivot toward more specialized niches—like selling high-grade alcohol for beverages and sanitizers—and to broaden their feed and corn oil revenue streams.
At the core, Alto operates biorefineries that collectively can produce nearly 500 million gallons of ethanol a year. They’re a Midwest fixture, with plants strategically sprinkled across corn country to minimize feedstock costs. Yet, the big question: is ethanol—a product whose fate is often dictated by the whims of the EPA and the Renewable Fuel Standard—really going to pay off in the long run? Alto is betting it can, if it remains nimble. The pandemic actually handed them a strange gift: demand soared for industrial-grade alcohol as disinfectants and sanitizers flew off shelves, offering a temporary cushion to their otherwise volatile earnings. Revenues have bumped around, crossing the $1 billion mark in good times, but profitability often remains at the mercy of ethanol crush spreads and the RIN (Renewable Identification Number) market.
But here’s what Alto might have over some competition: an existing infrastructure footprint that can be fine-tuned to capture not only biomass-derived ethanol markets but higher-margin specialty products. If the world moves toward lower-carbon fuels and stricter environmental standards, Alto’s existing relationships and compliance with LCFS-style regulations could help. If ethanol remains locked into its commodity role, though, Alto might find itself just another name on a list of producers grinding corn into a product whose price it cannot control. The future of Alto is less about big, show-stopping announcements and more about steady improvements: optimizing plant efficiencies, securing steady feedstock supply contracts, and carving out niche markets in an industry that often feels like a rollercoaster of government mandates and corn prices.
FutureFuel Corp. (FF)
FutureFuel (FF) manufactures biodiesel and specialty chemicals, supported by select subsidies and steady demand.
Founded in 2005 and headquartered in Missouri, FutureFuel is essentially a boutique purveyor of specialty chemicals and biodiesel. While its name suggests a sweeping vision of tomorrow’s energy, FutureFuel is more like a tiny workshop tinkering with bio-based solutions rather than a colossal disruptor. Annual revenues run in the ballpark of a few hundred million dollars—this is not Exxon.
FutureFuel’s biodiesel production relies heavily on feedstock prices (think soybean oil) and those all-important government subsidies (blender tax credits), which turn marginal producers into viable businesses overnight. Over the past several years, the company’s performance chemicals segment—custom chemical manufacturing for specialty applications—has provided a buffer when biodiesel margins took a hit. FutureFuel pays a dividend, too—rare for a small cap company in the green energy game—hinting at a conservative, cash-conscious approach.
As a biomass energy stock, FutureFuel stands as a niche player, content to skim the surface as larger players fight over scale. FutureFuel hedges by not putting all its eggs in the pure biofuel basket. This balanced approach might mean slower growth, but it reduces the risk of a devastating policy whiplash. It’s not sexy, but it might be stable—assuming there’s ongoing demand for cleaner-burning fuels and chemistries that help the big boys meet their carbon targets.