A modern practice which has allowed biomass feedstocks an early and cheap entry point into the energy market is the practice of co-firing a fossil fuel (usually coal) with a biomass feedstock. It refers to the blending of biomass with coal in the furnace of a conventional coal-fired steam cycle electric power plant. This is currently one of the simplest ways of utilizing biomass to displace fossil fuels, requiring no new investment or specialized technology. Between 5 and 15% biomass (by heat content) may be used in such facilities at an additional cost estimated at <0.5 cents/kWh (compared with coal-firing alone). Co-firing is known to reduce carbon dioxide emissions, sulfur dioxide (SOx) emissions, and potentially some emissions of nitrogen oxides (NOx) as well. Many electric util­ities around the US have experimented successfully with co-firing, using wood chips, urban waste wood and forestry residues.

Co-firing has a number of advantages, especially where electricity production is an output. First, where the conversion facility is situated near an agro-industrial or forestry product processing plant, large quantities of low-cost biomass residues are available. These residues can represent a low-cost fuel feedstock although there may be other opportunity costs. Second, it is now widely accepted that fossil-fuel power plants are usually highly polluting in terms of sulfur, CO2 and other GHGs. Using the existing equipment, perhaps with some modifications, and co-firing with biomass may represent a cost-effective means for meeting more stringent emis­sions targets. Biomass fuel’s low sulfur and nitrogen (relative to coal) content and nearly zero net CO2 emission levels allows biomass to offset the higher sulfur and carbon contents of the fossil fuel. Third, if an agro-industrial or forestry processing plant wishes to make more efficient use of the residues generated by co-producing electricity, but has a highly seasonal component to its operating schedule, co-firing with a fossil fuel may allow the economic generation of electricity all the year round.

Agro-industrial processors such as the sugarcane sugar industry can produce large amounts of electricity during the harvesting and processing season; however, during the off-season the plant will remain idle. This has two drawbacks, first, it is an inefficient use of equipment which has a limited lifetime, and second, electrical distribution utilities will not pay the full premium for electrical supplies which cannot be relied on for year-round production. In other words the distribution utility needs to guarantee year-round supply and may therefore have to invest in its own production capacity to cover the off-season gap in supply with associated costs in equipment and fuel. If however, the agro-processor can guarantee electrical supply year-round through the burning of alternative fuel supplies, then it will make efficient use of its equipment and will receive premium payments for its electricity by the distribution facility.