Quite simply, biomass fuel is when you take extra organic materials (like turkey guts from a Butterball plant) and instead of scrapping them, turn them into fuel. One well-documented outfit has a working proof-of-concept model, but is still experiencing some difficulties with a full-scale setup. That's where having a dedicated (and as a commenter at the DDN points out) taxpayer-backed facility helps.
Let's face it, folks. Crude oil isn't going to last forever (regardless of when you think it's going to run out), and many of the remaining reserves are in ... shall we say politically unstable areas. Developing something like this reduces foreign dependence on oil, creates local jobs, effectively recycles waste, and can be a win-win situation.
The difficulties that the private sector is having simply reinforce the need for (open) government intervention and development to work out the kinks. I'm glad to see the Dayton region at the forefront of it.
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