The battle of the brooms is over. After a decades-long war against drifts of coal soot inches deep on their window sills, the residents of Sheffield Road in Barnsley have finally seen the back of King Coal. Fifteen years after the last coal mine in Barnsley was boarded up, the polluting remains of the coal economy in this South Yorkshire town are being replaced by a clean and green, but still homegrown, alternative: biomass - in this case, wood that is grown and collected from the surrounding area.

Dick Bradford is the eco-warrior behind the project. Under his 21-year watch at Barnsley metropolitan borough council, most lately as chief engineer, the local authority has slashed carbon dioxide (CO2) emissions on its own estate by 40% on 1990 levels by introducing measures of burning coal more efficiently.

Instead of following its neighbours, which long ago replaced coal boilers with gas equivalents, Barnsley is now installing wood heating in all new public buildings and refurbishments, embracing biomass fuel as a preferred energy source. Because wood is considered carbon neutral - any CO2 released in the combustion process is mopped up by growing trees - the move could slash the council's CO2 emissions by 60% by 2010, 40 years ahead of the government's 2050 target.

For Bradford it is a simple equation. "From an environmental point of view, heating goes from being highly polluting to no carbon," he says. "It's a no-brainer." Barnsley received an Ashden Award for Sustainable Energy this year, which recognises organisations that have carried out sustainable energy in action at local level, but to the residents of Sheffield Road, a 166-unit social housing estate that was the first biomass heating project in Barnsley, the higher environmental good is a side issue. After two new boilers were installed in the three blocks of flats last April, producing 500kW of heat, the difference in quality of life was immediate.

"I used to have to dust every day. There was always soot," says Sarah Spacey. "And with the noise and smoke and soot when they were cleaning the boilers out, you couldn't leave your windows open. Now you can leave your windows open every day and there is no smoke coming out. It's made a big difference."

Residents were also delighted to find that their heating bills had halved. Although this was primarily as a result of new double glazing and cavity wall insulation, the council also installed a system of individual metering, rather than the weekly £10 flat rate, allowing residents to pay for what they use and providing a real incentive to conserve energy.

More council-owned properties are due for the same treatment this year. Bradford says Barnsley's plants, which burn 6,500 tonnes of coal a year and generate 15,000 tonnes of CO2, will eventually be replaced with biomass, including the new town hall and nine new secondary schools, which will be replaced with new biomass-heated buildings under the Building Schools for the Future programme. The town's coal is currently sourced by UK Coal from various pits to create a "Yorkshire blend".

"Soon, we won't be burning coal any more," says Bradford. Affordable warmth Barnsley isn't the only standard-bearer for biomass in South Yorkshire. Sheffield city council has received funding to this year convert six tower blocks comprising 296 flats from gas-fired heating to biomass, and is considering it as an option for another 180 community heating schemes that need replacement boilers. Robert Almond, manager of the council's sustainable housing and affordable warmth team, says: "We're doing it for a mix of environmental reasons and affordable warmth because of the massive increases in gas costs."

Barnsley and Sheffield have over the past two years helped spawn a 3,000-tonne market for biomass fuel in what was once the heartland of the now defunct coal mining industry. This biomass market, which is expected to double again by the end of 2007, has led to the creation of a new local wood chip supply company, Silvapower, which was able to get start-up grants from the European Union and the regional development agency Yorkshire Forward.

The man behind much of the area's interest in biomass as fuel is Robin Ridley, wood fuel project officer at the South Yorkshire Forest Partnership, who reckons that the 14,000 hectares (34,595 acres) of managed woodland in South Yorkshire could support a wood-fuel industry of at least 50,000 tonnes a year. Ridley organised a fact-finding trip three years ago to observe how European countries are managing their forests sufficiently to support a booming biomass market. "What the Europeans are doing is so simple," says Bradford. "They aren't deforesting Europe. They are just managing the forests."

One big barrier in Britain, where biomass accounts for only 1% of heat supply, is cost. Wood chip is cheap - according to Bradford, Barnsley is paying 1.1p per kilowatt of delivered heat, compared with 1.8p for coal and 4p for gas. But the boilers to burn it cost tens of thousands of pounds, and cash-strapped councils have to rely on capital grants to install them. Wood pellets can be substituted for coal in most coal boilers, but they cost three times as much as wood chip because there is almost no production in the UK - it must be imported from Scandinavia. Ridley hopes to change all that with the creation of a wood pellet plant in the area. South Yorkshire Forest Partnership is looking to raise £1m from organisations such as Yorkshire Forward and the private sector - £1m that, Ridley says, would be money well spent as there is an "instant market" for the pellets.

"There's 30,000 tonnes of coal still being used to heat schools and public buildings across West and South Yorkshire," he says. "Coal could instantly be replaced with wood pellets in those boilers." The availability of affordable wood pellets would also open up vast potential in the domestic market, he says, and drive down costs ever further.

"Biomass often doesn't even get a namecheck when renewables are discussed," says Ridley. "It's an old technology and people perceive it to be unsophisticated. Yet it can be fully automated and work like a gas boiler set-up. And the whole life cost comes down to less than the equivalent cost for gas." Like the one-time coal economy, biomass could provide a real boost to a depressed regional economy, says Bradford. It could provide employment - an estimated 15 jobs for every megawatt generated; bring neglected woodland into active management; and turn wood waste, which would otherwise be sent to landfill, into a commodity. "We get those big wins and we make the carbon savings targets 40 years ahead of where we should be making them. That's not bad."