How/Can I use base64 as image source in a Jasper Report template?

Passing parameter as String makes jasper report believe its a absolute file path, so you need another class. The most obvious would be java.awt.Image or java.io.InputStream.

I choose java.io.InputStream since this will require less code, so the first thing we need to do now is to decode the base64 image String.

There are several Base64 class that will do the job, I choose the org.apache.commons.codec.binary.Base64 since apache commons-codec.jar is already distributed with jasper report (dependencies). The decode will give us a byte array byte[], so now we need only to add a ByteArrayInputStream

The java code would be:

InputStream stream = new ByteArrayInputStream(Base64.decodeBase64(smileyfaceimage.getBytes()));

Time to pass it into the jasper report imageExpression

<image scaleImage="FillFrame" onErrorType="Blank">
<reportElement x="167" y="62" width="363" height="171" backcolor="#333333"/>
    <imageExpression class="java.io.InputStream"><![CDATA[new java.io.ByteArrayInputStream(org.apache.commons.codec.binary.Base64.decodeBase64($P{smileyfaceimage}.getBytes()))]]></imageExpression>
</image>

Hope for the best and press the preview:

Important notice: The smileyfaceimage needs to be without:data:image/png;base64,

EDIT: The problem of the OP (comments) was that with old jasper report lib (3.0) you need to specify the class in the imageExpression @see class="java.io.InputStream" the post has been update consequently since this works also in 6.0.

Java 8+ without external libraries:

<imageExpression><![CDATA[javax.imageio.ImageIO.read(new java.io.ByteArrayInputStream(Base64.getDecoder().decode($P{barcodeHeader})))]]></imageExpression>

If that doesn't work, this should definitely:

<imageExpression><![CDATA[javax.imageio.ImageIO.read(new java.io.ByteArrayInputStream(java.util.Base64.getDecoder().decode($P{barcodeHeader})))]]></imageExpression>

You need to decode the image somehow, e.g. use an imageExpression:

<image scaleImage="RetainShape" hAlign="Center" vAlign="Bottom" isUsingCache="false">
  <reportElement uuid="53a340b3-7d64-4104-9e9f-0f603059579a" key="Logo_Footer" x="55" y="760" width="370" height="42"/>
    <imageExpression><![CDATA[new java.io.StringBufferInputStream(new org.w3c.tools.codec.Base64Decoder(" Base 64 String Data ").processString())]]>
  </imageExpression>
</image>

I'm using this to embed images, but it should work with a variable, field or parameter too.