The wood pellets market is projected to be valued at USD 10,037.6 million in 2023 and is expected to rise to USD 24,345.6 million by 2033, with sales anticipated to record a significant CAGR of 10.2% during the forecast period.
The industry is experiencing robust growth driven by escalating environmental concerns and increasing government initiatives aimed at promoting sustainability. Wood pellets, made from renewable sources such as wood waste, sawdust, and agricultural residues, are increasingly used for heating and power generation, offering a cleaner and more sustainable alternative to fossil fuels.
Global efforts to promote renewable energy sources are fueling the expansion of the wood pellets market. Governments worldwide are implementing policies and incentives to support the use of renewable energy, contributing to the growing demand for wood pellets. Their high energy density, low emissions, and ease of storage and transportation make wood pellets a preferred choice for many applications.
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Investments in production capacity and advancements in pellet manufacturing technology are further driving market growth. As awareness of climate change and the need for sustainable energy solutions continues to rise, the demand for wood pellets is expected to grow significantly.
In North America, the wood pellets market is dominated by the United States, with revenue expected to reach USD 200 million in 2022. The increasing residential demand for wood pellet stoves, which are cost-efficient compared to natural gas, and incentives like the Wood and Pellet Heater Investment Tax Credit (ITC) are driving market growth in the region.
Europe holds nearly 78% of the global wood pellets market, with widespread use in power boilers and residential heating. Stringent carbon emissions regulations in the European Union have led to increased sales of wood pellets, particularly in countries like France, Austria, Italy, and Germany, where product penetration is notably high.
The Asia Pacific region accounts for 11% of the market share and is seen as a promising area for future growth. The region’s numerous coal power plants present opportunities for wood pellets to replace coal in power generation through thermal upgrading technology.
The residential sector is a significant contributor to the wood pellets market, generating USD 3.5 billion in revenue. Wood pellets are gaining popularity among household users for their green and sustainable attributes, with applications not only in cooking and heating but also as cat litter and horse bedding. This diverse range of uses is expected to continue driving demand in the residential sector.
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Recent Developments
Drax announced the acquisition of the whole issued share capital of Pinnacle Renewable Inc. in April 2021. Pinnacle may continue to be headquartered in British Columbia as a subsidiary of Drax. Over 480 Pinnacle workers, including current leadership, may be welcomed into the Drax Group.
July 2020 – Enviva paid US$ 164.0 million in cash for all limited liability interests in Georgia Biomass Holding LLC, a Georgia limited company and indirect owner of a wood pellet manufacturing facility in Waycross, Georgia, after accounting for certain collateral adjustments. Georgia Biomass was acquired as a business combination and accounted for using the purchase method.
Enviva Partners L.P. built a new manufacturing factory in Lucedale, Mississippi, in October 2019. These new factories may cost the corporation about US$ 140 million. The firm has eight production sites in the southeastern United States, producing more than 3 million metric tonnes of pellets yearly. The construction of these additional plants can take 15 to 18 months.
Key Companies Profiled
- Energex
- Enviva LP
- Graanul Invest
- Drax Biomass
- Pinnacle
- Sinclar Group Forest Products
- Lauzon
- Wood Pellet Energy (UK) Ltd.
- United Company
- Highland Pellets LLC
- Groupe Savoie Inc.
- I.C.S. (Lacroix) Lumber Inc.
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Key Segments Covered in the Wood Pellets Market Report
Wood Pellets Market by Feedstock:
- Forest and Wood Waste Resources
- Agricultural Residue and Waste
- Food Waste
- Virgin Lumber
- Energy Crops
Wood Pellets Market by End User:
- Wood Pellets for Residential/Commercial Heating
- Wood Pellets for CHP/District Heating
- Wood Pellets for Co-firing
By Region:
- North America
- Latin America
- Western Europe
- Eastern Europe
- Asia Pacific Excluding Japan (APEJ)
- Japan
- The Middle East & Africa (MEA)
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