Fossil fuels, especially coal, contribute to carbon emissions, hindering the EU’s decarbonization goal by 2050. This article proposes converting the Pego Coal Power Plant into a biomass plant as a potential solution. Biomass, a renewable resource abundant in Portugal, can transform the Pego plant into a sustainable energy source, reducing greenhouse gas emissions and combating climate change. It also reduces rural fire risks and ensures regional social and economic stability. The study explores the feasibility, limitations, and socioeconomic impacts of this scenario. This solution prevents plant closure, reduces environmental impacts, and promotes sustainability. Aligning with Portugal’s 2030 Agenda and global climate change efforts, converting the Pego plant serves as a valuable example of renewable resource utilization for climate change mitigation and regional stability. The study’s results offer insights for policymakers and stakeholders in developing sustainable energy transition strategies. Adopting such solutions can help countries achieve decarbonization goals while promoting social and economic development.