Wood Pellet Market Share, Size, Trends, Industry Analysis Report, By Application (Heat, CHP, and Power); By End-User; By Region; Segment Forecast, 2023- 2032
- Published Date:Jan-2024
- Pages: 112
- Format: PDF
- Report ID: PM3421
- Base Year: 2023
- Historical Data: 2019-2022
Report Outlook
The global wood pellet market was valued at USD 9.58 billion in 2023 and is expected to grow at a CAGR of 4.70% during the forecast period. The growing product demand for renewable energy across the globe mainly to reduce the dependence and usage of fossil fuels contributing to the global warming along with the significant rise in the construction of power plants and huge emergence of renewable energy sector across both developed and developing economies, are among the factors influencing the market growth. In addition, the rising consumption of wood pellets in the co-firing applications and easy availability and low production cost of agricultural residue and wood waste that are the prominent sources of wood pellets, is also likely to fuel the market growth.
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For instance, in April 2022, CPM, a leading manufacturer of pellet mills, pelleting equipment, and automation production introduced its new technology to improve wood pellet mill efficiency that has been specially developed to reduce energy demand, boost mill capacity, and consistent pellet quality. The technology has tested in real world mill operations and found to effectively stabilize mill running operations.
Moreover, with the rising energy consumption due to increase in global population and rapid industrialization, the emission of greenhouse gases through burning of fossil fuels is growing. Thus, there is an urgent need to promote and adopt climate-friendly technologies and fuel briquetting technology is one such technology which addresses the multiple needs of society and environment.
The outbreak of the COVID-19 pandemic has significantly impacted the growth of the wood pellet market. The rapid emergence of pandemic worldwide has disrupted global supply chains, which resulted in some logistical challenges for the wood pellet industry. However, the demand for wood pellets for heating and electricity production has increased in some countries due to more number of people working from home and spending more time indoors that had a positive impact on the market during the pandemic.
Industry Dynamics
Growth Drivers
The rapid increase in the popularity of wood pellets as an energy carrier and rise in the demand for sustainable fuels that are being produced from the renewable or alternative feedstock including wastes, plants, or vegetables, which helps in effectively reaching the ambitious decarbonization targets, are driving the market growth at significant rate. A drastic reduction in the emission of greenhouse gases across the globe is increasingly fueling the consumption of wood pellets in the industrial sector.
Furthermore, these types of pellets are extremely dense and its low humidity content allow then to easily burned with high combustion-efficiency and their high-density also enables compact storage and rational transport over the long distance, that has been pushing the market growth forward. The energy efficiency of wood pellet production system is being improved in order to reduce the carbon footprint and expanding the use of product as a major source of energy.
Report Segmentation
The market is primarily segmented based on application, end-user, and region.
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By Application |
By End-User |
By Region |
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Heat segment is expected to witness highest growth during forecast period
The heat segment is expected to grow at a highest CAGR during the projected period, which is mainly driven by significant rise in the popularity of biomass boilers as a heating solution for both residential and commercial properties, as these boilers can burn wood pellets to generate heat, while providing a renewable and cost-effective alternative to traditional heating systems. It is being considered as a carbon-neutral source of energy, which makes them an attractive option for consumers and businesses who are looking to reduce their carbon footprint and adopt sustainable solutions, thereby propelling the segment market growth at rapid pace.
The power segment led the industry market with significant revenue share in 2022, mainly due to the growing efforts by major government authorities to promote the use of biomass power generation to meet the rising need, as a result of growth in industrialization, urbanization, and population growth across the globe. In addition, the cost-effectiveness of the product than other forms of renewable energy such as solar or wind power and can be produced from waste wood, sawdust, and other by-products of the timber industry, which further reduces their cost compared to fossil fuels, are few other factors boosting the product adoption among consumers.
Residential and commercial segment accounted for the largest market share in 2022
The residential and commercial segment accounted for more than major global market share in 2022, and is likely to retain its market position throughout the forecast period. The growth of the segment market can be mainly attributed to growing prevalence of wood pellets among houseowners due to numerous attributes including sustainability, cleansing, and greenness among others. Furthermore, the wood pellets are easily available and often more affordable than other forms of renewable energy such as solar panels or wind turbines, which led to increased number of consumers opting for the product especially who want to reduce their dependence on fossil fuels and save money on their energy bills, which in turn, has significantly propelled the growth of the segment market in the recent years.
The industrial segment is projected to exhibit significant growth rate over the coming years, which can be highly attributable to increased number of governments around the world providing incentives and subsidies to encourage the business towards the use of renewable energy sources including wood pellets. These incentives can include tax credits, grants, and other financial incentives that make wood pellets more attractive to industries as a fuel source while maintaining the sustainability.
Europe region dominated the global market in 2022
The Europe region dominated the global market for wood pellet with significant market share in 2022, and is projected to maintain its dominance throughout the forecast period. The growing consumption of the product for power generation across the region and various types of subsidies provided by government sources of energy along with the widespread adoption of power boilers are the primary factors spurring the demand for the product. Beside this, several European countries are taking measures for spreading the awareness pertaining to the adoption and utilization of wood pellets. For example, The United Kingdom amended their Domestic Renewable Heat Incentive to promote the use of renewable heat at residential levels.
The Asia Pacific region is projected to witness noteworthy growth with a healthy CAGR during the projected period. The presence of favorable government policies to boost up the use of wood pellets and rise in the number of power plants especially in countries like South Korea, Japan, China, and Malaysia coupled with the growing penetration among countries towards aggressively subsiding their biomass sector, which is hindering the adoption of other available renewable sources, has been propelling the growth of the market.
Competitive Insight
Some of the major players operating in the global market include German Pellets, Pinnacle Renewable Energy, Enviva LP, Wood & Sons, Drax Group, Stora Enso, Svenska Cellulosa, Brookridge Group, Wood Pellet Energy, Vermont Wood Pellet, Farm Fuels, Sinclar Group Forest Products, Graanul Invest, Energex, Lauzon, United Company, Highland Pellets, Groupe Savoie, and I.C.S. Lumber.
Recent Developments
- In April 2022, Drax, new pellet manufacturing facility at the Alabama, that will be the company’s second pellet production facility in the state and will produce approx. 360,000 tns of sustainable pellets each year.
- In November 2021, NXR TRADE India, signed new agreement to deploy “Biomass Pellet Installation” from the “CPM Global Biomass”. This biomass pellet mill has a capacity of 2 tonnages/hour, that is the first professional pellet in Jammu & Kashmir territory, and the start of the product in the region.
Wood Pellet Market Report Scope
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Report Attributes |
Details |
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Market size value in 2024 |
USD 9.89 billion |
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Revenue forecast in 2032 |
USD 14.42 billion |
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CAGR |
4.70% from 2024 – 2032 |
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Base year |
2023 |
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Historical data |
2019– 2022 |
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Forecast period |
2024– 2032 |
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Quantitative units |
Revenue in USD million/billion and CAGR from 2024 to 2030 |
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Segments covered |
By Application, By End-User, By Region |
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Regional scope |
North America, Europe, Asia Pacific, Latin America; Middle East & Africa |
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Key companies |
German Pellets GmbH, Pinnacle Renewable Energy Inc., Enviva LP, Wood & Sons, Drax Group Plc, Stora Enso, Svenska Cellulosa, Brookridge Group, Wood Pellet Energy Ltd., Vermont Wood Pellet Company, Farm Fuels, Sinclar Group Forest Products, Graanul Invest, Energex, Lauzon, United Company, Highland Pellets LLC, Groupe Savoie Inc., and I.C.S. Lumber Inc. |
FAQ's
key companies in the Wood Pellet Market are German Pellets, Pinnacle Renewable Energy, Enviva LP, Wood & Group, Stora Enso, Svenska Cellulosa.
The global wood pellet market expected to grow at a CAGR of 4.65% during the forecast period.
The Wood Pellet Market report covering key are application, end-user, and region.
key driving factors in Wood Pellet Market Increasing Global Demand for Renewable Energy.
The global wood pellet market size is expected to reach USD 14.5 billion by 2032.
