This paper examines how cooperatives facilitate the valorization of agroforestry biomass residues, highlighting their capabilities to promote both sustainable development and economic growth. The Cooperative business model establishes a strong infrastructure for biomass valorization through shared resource management, improved supply chain operations, and enhanced market access. A systematic qualitative review based on PRISMA guidelines principles was performed from a total of 55 studies between 2015–2025. The research conclusions from 13 case studies show that cooperatives rarely adopt vertical supply chain integration. They mostly depend on horizontal and partial vertical integration to boost their value chain efficiency. Research results also demonstrate that cooperative models successfully advance biomass valorization and provide important guidance for bioeconomy sector policymakers and stakeholders. Furthermore, the research results reflect how factors like diversification, value chain integration, strategic partnerships, sustainability alignment, technological innovation, and community impact, affect the financial viability and resilience of the business model. The study ends with guidance for policymakers and industry leaders along with researchers about how they can facilitate the shift to a biobased economy.