Global Wood Pellets Market - 2024-2031

Overview

Global Wood Pellets Market reached US$ 9.5 billion in 2023 and is expected to reach US$ 15.7 billion by 2031, growing with a CAGR of 6.4% during the forecast period 2024-2031.

The global wood pellet market had a significant upsurge due to the increasing demand for renewable energy sources and sustainable practice. Wood pellets and compressed biomass particles manufactured from a range of wood scraps are becoming a competitive alternative to traditional fossil fuels for the production of heat and power.

The EU consumed 24.8 Million Metric Tons of wood pellets in 2022, reaching a new record mostly because of rising domestic use. Based on the implementation of the third Renewable Energy Directive and the continued growth of the residential markets bolstered by Member State subsidies, it is anticipated that EU consumption will reach 25.6 MMT in 2023.

Over past ten years, the EU's demand for pellets has far exceeded local supply, leading to an increase in imports, primarily from US, Russia, Belarus and Ukraine. In 2022, the EU imported wood pellets valued at 5.89 MMT or US$ 1.32 billion. Therefore, the Europe is contributing significantly to the growth of the global market with capturing nearly 1/3rd of the global market share.

Dynamics

Export Expansion in the Global Market

There is more of a supply of wood pellets on the market as manufacturing increases. The augmented availability can aid in meeting the escalating need for wood pellets on a national and global scale. Producers can expand their consumer base by tapping into other markets by exporting wood pellets. The lessens reliance on a particular market and helps to limit the risks put on by variations in local demand or adjustments to regulations. Producers can increase sales and profitability by reaching out to a wider range of marketplaces.

For instance, As per USDA Foreign Agricultural Service, the total amount of wood pellets exported from U.S. in December 2023 was 917,175.4 metric Tons. For the entire year 2022, 8.98 million metric Tons were exported. US wood pellet exports totaled US$ 152.95 million in December, up from US$ 101.07 million in December 2021 and US$ 120.94 million the month before.

New Technology Launches to Enhance Pallet Efficiency

The production of wood pellets can be streamlined with the use of new technology, increasing productivity and lowering costs. Growth in the market may result from increased production volumes at lower costs as a result. Technological advancements can make it attainable to produce wood pellets from sustainable sources or increase the production process's sustainability.

For instance, in April 2022, to scale or increase the productivity of wood pellet mills, CPM, a provider of automation systems, pellet mills and pelleting equipment, has introduced new technology. After ten years of study, the company developed its proprietary Twin Track technology to save energy consumption, ensure consistent pellet quality and increase mill capacity.

Regulatory Challenges

Several laws and guidelines about emissions, environmental sustainability and forest management techniques apply to the wood pellet business. Adherence to these regulations may result in increased production expenses and limited market accessibility in specific areas.

For instance, rules about carbon emissions, deforestation and sustainable forestry methods may affect raw material availability and raise production costs for companies that make wood pellets. Moreover, regulatory variations among nations and areas can complicate matters for businesses that operate in several marketplaces, impeding their ability to expand.

Segment Analysis

The global wood pellets market is segmented based on feedstock, application, end-user and region.

Biomass Pellets Accelerate Adoption in Power Industry

In October 2021, an Indian power company NTPC had placed an order for 9,30,000 tons of biomass pellets to be co-fired in power plants, to enhance air quality. Moreover, the energy ministry states that 1.3 million tons of biomass pellets are sourced by UP, Punjab & Haryana for co-firing in their power plants.

The supply of 8,65,000 tons of biomass pellets, for which NTPC placed an order, is currently underway. In October 2021, NTPC placed a 65,000-ton additional order. Furthermore, above mentioned statement augments the demand for bio-based wood pellets in power industry. Therefore, the power generation application segment contributes significantly to the global segmental share.

Geographical Penetration

Increasing Product Launches of Hardwood Pellets Fuels Market Growth

The growing product launches of hardwood pellets contribute to the diversification of product offerings in the North American wood pellets market. By providing consumers with a wider range of options, including softwood and hardwood pellets, manufacturers can better cater to diverse customer preferences and applications, thereby stimulating market growth.

For instance, on April 22, 2021, Kingsford has launched Pellets made entirely of hardwood. Kingsford has begun selling Hardwood Pellets in addition to charcoal as premium wood-fired fuel. To provide greater hickory, cherry and maple wood flavor, Kingsford pellets are composed entirely of natural materials with no additions of binders, preservatives or fillers. Therefore, with more than 25% of the global market share, North America is contributing significant in global market.

COVID-19 Impact Analysis

Due to travel restrictions, plant closures and lockdown precautions, the pandemic caused disruptions in supply networks. Due to the disruption in the supply of equipment, additives and raw materials required for the production of wood pellets, manufacturing and project timeframes were delayed. The pandemic has affected the energy industry, specifically the power generation sector.

The pandemic's effects on consumer behavior and economic slowdowns resulted in a decline in the market demand for wood pellets, especially in areas like commercial and domestic heating. The overall usage of wood pellets decreased as a result of people spending more time at home and less time in workplaces and commercial buildings requiring heating fuel.

Russia-Ukraine War Impact Analysis

The scarcity of wood pellets in Europe may cause prices to soar in the event of supply chain interruptions. Customers who rely on wood pellets for energy generation, such as consumers who use them for domestic heating, commercial enterprises and industrial facilities, will be impacted by these price increases.

Being a significant exporter of energy resources, disruptions in the energy supply spurred on by the fighting may result in increased energy prices globally. As a result, producers of wood pellets might have to pay more for production and transportation, which they could then pass along to consumers in the form of higher product prices.

By Feedstock

• Agricultural Residues
• Recycled Wood
• Forest Residues
• Others

By Application

• Heating
• Power Generation
• Combined Heat & Power (CHP)

By End-User

• Residential
• Commercial
• Industrial

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• On April 22, 2021, Kingsford has launched Pellets made entirely of hardwood. Kingsford has begun selling Hardwood Pellets in addition to charcoal as premium wood-fired fuel.
• In 2020, OkoFEN Forschungs- und Entwicklungs Ges.m.b.H has announced ZeroFlame combustion technology, which minimizes particulate matter (PM) emissions without the need for filters. The company perceives this as another significant advancement in the field of wood pellet heating.
• In 2020, Pure Biofuel has introduced its newest bag and updated product range to our customers and partners in UK, ENPOWER wood pellets. The pellets represent the foundation of our operation and reflect our basic company values of dependability, quality and value.

Competitive Landscape

The major global players in the market include Enviva, Fram Renewable Fuels, German Pellets GmbH, Wood Pellet Energy (UK) Ltd., Lignetics Inc., Energex Corporation, Viridis Energy Inc., Zilkha Biomass Energy, Drax Biomass and Veer Biofuel.

Why Purchase the Report?

• To visualize the global wood pellets market segmentation based on feedstock, application, end-user and region, as well as understands key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of wood pellets market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global wood pellets market report would provide approximately 61 tables, 53 figures and 185 Pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies