I'm trying to have a bunch of space creatures in orbit grazing (asteroid mining invisible asteroids) and when you kill them they give you biomass (money) so I can upgrade my space creatures capabilities. Is there a way to do this or will I need to use battle reputation to then allow the purchase of a free upgrade?

It's possible, but it requires missions and special ships made by the missions as well as the player being payed when they land somewhere, not when they kill the creatures. The missions can be invisible or not, depending on what you're trying to do. Have each mission make one of the grazing space creatures. They can be placed in a specific system, follow the player, whatever, doesn't matter, just as long as the player can find the grazing creature and kill it. The special ship objective should be destroy and the mission should be set to complete on a planet nearby.

Alternatively, you could leave killing out of the picture entirely and make all weapons used by the player disable-only. The player can then disable the creatures, board them, and 'eat' the biomass on board (same as looting a space hulk of its credits). The great part about doing it this way is the exact value varies even between exact copies of a creature, mirroring the fact that no two living beings are exactly the same. I say 'eat' because I assume your plan is to make the player a predator of sorts in space and the player's goal is to hunt the grazing space creatures and use the biomass gained to increase their own abilities to become the king/queen of the space jungle.

I really wanted to just jump into a system and start hunting the creatures and when I had enough biomass go get an upgrade but the boarding idea will work. Thanks for the help.

mïsn xxx creates a special ship that jumps in after a short delay with the goal to destroy it. OnShipDone Axxx Syyy.
mïsn yyy autoaborts and pays the player. OnAbort Sxxx.

Will need several copies of this pair of missions if you want to have multiple ships to hunt.

It is possible to get automatic upgrades after killing a certain number of the enemies, but it requires several outfits and iterated cröns to count kills. Probably not worth it, although technically doable. It’s probably easier to just have a spöb though. Make its gövt be an enemy of the ships you’re killing, so each kill gives you status with that gövt. Now make an autoaborting mission available 100% of the time from the main spaceport if your legal status is high enough, that makes the upgrades available (or gives them to you automatically).