Biomass has been demonstrated as a capable source of energy to fulfill the increasing demand for clean energy sources which could last a long time. Replacing fossil fuels with biomass-based ones can potentially lead to a reduction of carbon emissions, which is the main target of the EU climate strategy. Based on RED II (revised Renewable Energy Directive 2018/2001/EU) and the European Green Deal, biomass is a promising energy source for achieving carbon neutrality in the future. However, the sustainable potential of biomass resources in the forthcoming decades is still a matter of question. This review aims at estimating the availability of biomass for energy reasons in the EU, and to evaluate its potential to meet the coal power plant capacity of the main lignite-producer countries, including Germany, Poland and Greece. Plants in line with the sustainability criteria of RED II have been selected for the preliminary estimations concerning their full conversion to the biomass power concept. Furthermore, the various barriers to biomass utilization are highlighted, such as the stranded asset risk of a future coal phase-out scenario, biomass supply chain challenges, biomass availability in main lignite-producer EU countries, the existing full conversion technologies, and biomass cost. A variety of challenges in the scenario of lignite substitution with biomass in a plant are investigated in a SWOT (strengths, weaknesses, opportunities, and threats) analysis. Technological risks and issues should be tackled in order to achieve the coal phase-out EU goal, mainly with regard to the supply chain of biomass. In this direction, the development of logistics centers for the centralized handling of biomass is strongly recommended.