Since biomass is the only carbon-based renewable fuel, its application becomes more and more important for climate protection. Among the thermochemical conversion technologies (i.e., combustion, gasification, and pyrolysis), combustion is the only proven technology for heat and power production. Biomass combustion systems are available in the size range from a few kW up to more than 100 MW. The efficiency for heat production is considerably high and heat from biomass is economically feasible. Commercial power production is based on steam cycles. The specific cost and efficiency of steam plants is interesting at large scale applications. Hence co-combustion of biomass with coal is promising, as it combines high efficiency with reasonable transport distances for the biomass. However, biomass combustion is related to significant pollutant formation and hence needs to be improved. To develop measures for emission reduction, the specific fuel properties need to be considered. It is shown that pollutant formation occurs due to two reasons: (1) Incomplete combustion can lead to high emissions of unburnt pollutants such as CO, soot, and PAH. Although improvements to reduce these emissions have been achieved by optimized furnace design including modeling, there is still a relevant potential of further optimization. (2) Pollutants such as NOX and particles are formed as a result of fuel constituents such as N, K, Cl, Ca, Na, Mg, P, and S. Hence biomass furnaces exhibit relatively high emissions of NOX and submicron particles. Air staging and fuel staging have been developed as primary measures for NOX reduction that offer a potential of 50% to 80% reduction. Primary measures for particle reduction are not yet safely known. However, a new approach with extensively reduced primary air is presented that may lead to new furnace designs with reduced particle emissions. Furthermore, assisting efforts for optimized plant operation are needed to guarantee low emissions and high efficiency under real-world conditions.