The government is setting up a task force to stimulate biomass supply and demand, and offering a range of grants.
Ministers hope this will help the UK to meet its targets for using renewable energy, and that it will also boost farming, forestry and the countryside.
Material like miscanthus (a tall, woody grass), willow, poplar, sawdust, straw, and wood from forests are all suitable.
Funding the industry
The former president of the National Farmers' Union, Sir Ben Gill, is to head the new government-appointed task force.
A £3.5m UK-wide Bio-Energy Infrastructure Scheme will also offer grants to help harvest, store, process and supply biomass for energy production.
Biomass can provide both heating and power, and is one of the fuels available to electricity suppliers in meeting the government's Renewables Obligation, which requires them to obtain 15% of their electricity from renewable sources by 2015.
Announcing the infrastructure scheme the Food and Farming Minister Larry Whitty said: "We must look to the future in our search for low-carbon energy sources.
"Biomass energy has the potential to be of huge benefit in terms of combating climate change, boosting farm diversification, and creating more rural jobs.
"Barriers have to be overcome if we are to establish confidence in the industry, and we want to make it easier for producers to get their biomass out of the fields and forests and onto the market, to make it a viable alternative energy source."
Sir Ben Gill said: "Biomass struggles to make progress. I intend to define why and then look at what needs to be done. This study is about finding solutions and that's what we intend to deliver."
The government's Energy White Paper includes an aim for renewable energy to supply 10% of UK electricity by 2010, with an aspiration to double that by 2020.
Last May a report by an independent advisory group, the Royal Commission on Environmental Pollution, said the government was neglecting the potential of biomass for tackling climate change.
The RCEP chairman is Professor Sir Tom Blundell, head of the department of biochemistry at the University of Cambridge.
Speaking at the report's launch, he said: "I am disappointed that energy from biomass has not developed as quickly in the UK as elsewhere in Europe.
"It could make a vital contribution to the UK's targets for combating climate change, but is failing to develop under fractured and misdirected government policies."
The RCEP report called for:
The government's response to the report, which has just been published, expresses agreement with some of the RCEP's points.