Energy and Power

Wood Pellets Market

Global Industry Analysis and Forecast 2023-2030

Pages : 120

Base Year : 2022

Released Year : February 2024

Format :Pdf Ppt Xls

Report ID:KR393

Author : Priyanka V.

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Base Year

2022

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Forecast Year

2023-2030

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Historical Years

2018-2021

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Market Value (2022)

USD 12.73 Billion

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Forecasted Value (2030)

USD 24.18 Billion

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CAGR (2023 - 2030)

8.46%

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Fastest Growing Region (2023 - 2030)

Europe

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Largest Region

North America

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By Application

Heating, Power Generation, CHP.

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By End Use

Residential, Commercial, Industrial.


Market Perspective

The global Wood Pellets Market was valued at USD 12.73 billion in 2022 and is projected to reach USD 24.18 billion by 2030, growing at a CAGR of 8.46% from 2023 to 2030.

The global wood pellets market has experienced significant growth in recent years. This can be attributed to the increasing demand for renewable energy sources and the rising awareness about the environmental benefits of using wood pellets as a fuel alternative.

Additionally, government initiatives and policies promoting the use of wood pellets for power generation have also contributed to market expansion. Furthermore, advancements in technology and manufacturing processes have made wood pellet production more efficient and cost-effective. This has made the fuel alternative more accessible to a broader range of consumers, including residential households and industrial facilities.

Moreover, with the continuous depletion of fossil fuel reserves, wood pellets provide a viable solution to meet the increasing energy demands while minimizing carbon emissions. As a result, the wood pellet market is projected to witness substantial growth, attracting investments from various stakeholders in the energy sector.

Analyst’s Review on Wood Pellets Market

The global wood pellet market is projected to experience substantial growth in the foreseeable future due to various factors. One of the key drivers is the increasing demand for renewable energy sources, with wood pellets emerging as a prominent choice. In addition, increasing awareness regarding the environmental benefits of wood pellets, government initiatives and favorable regulations that encourage the use of wood pellets for heating and power generation are playing a significant role in market development.

Furthermore, technological advancements in pellet manufacturing processes are also driving market growth by enabling the production of high-quality wood pellets with minimal waste and emissions. Moreover, the growing adoption of wood pellets as a sustainable alternative to fossil fuels in the residential and industrial sectors is bolstering product consumption. As consumers become more environmentally conscious and seek to reduce their carbon footprint, the demand for renewable energy sources like wood pellets is expected to increase, paving the way for further market growth in the coming years.

Market Definition

Wood pellets are a type of biomass fuel made from compressed sawdust, wood shavings, wood chips, or other wood residues. These small cylindrical pellets are typically around 6 millimeters in diameter and 10-30 millimeters in length. In addition, wood pellets are widely used as a renewable and sustainable source of energy for various applications, including residential and commercial heating, industrial processes, and power generation.

Furthermore, the production of wood pellets involves drying and compressing wood materials under high pressure without the use of additives or binders. This process results in dense and compact pellets that have a low moisture content and high energy density, making them an efficient and clean-burning fuel. Moreover, wood pellets are considered an environmentally friendly alternative to fossil fuels, as they are derived from renewable resources and produce fewer greenhouse gas emissions when burned. They are often used in specialized pellet stoves, boilers, and heating systems designed to accommodate this type of fuel.

Market Dynamics

Growing concerns about climate change have stimulated the expansion of the wood pellets market. As people become more informed about the negative impacts of fossil fuels on the environment, they are actively seeking alternative energy sources. In addition, wood pellets, which are derived from renewable biomass, are now widely recognized as an eco-friendly and sustainable fuel alternative. Thus, surging climate consciousness has led to a substantial rise in the demand for wood pellets, attracting more investments into the sector. Furthermore, aside from its environmental advantages, wood pellets also offer economic benefits as they are more cost-effective than traditional fossil fuels.

Moreover, various governments and organizations are offering incentives and subsidies to encourage the use of wood pellets, which is adding to their growing demand. Additionally, the versatility of wood pellets, suitable for both residential and commercial heating purposes, as well as industrial applications, has contributed to their widespread adoption. However, the profitability and sustainability of wood pellet production can be influenced by the fluctuating cost and availability of raw materials, specifically wood feedstock, which is expected to limit the growth of the wood pellets market.

Segmentation Analysis

The global wood pellets market is segmented based on application, end user, and geography.

Based on application, the market is bifurcated into pass heating, power generation, and CHP. The Power generation segment is expected to dominate the wood pellets market in the year 2022, due to the advantages it offers such as meeting renewable energy targets, being carbon-neutral, and benefiting from supportive government policies. In addition, utilizing wood pellets for power generation offers several more benefits, including promoting energy independence, ensuring a consistent and manageable electricity supply, and making use of existing infrastructure, which is propelling its usage for power generation.

Based on end use, the market is bifurcated into residential, commercial, and industrial. The residential segment is projected to have the largest wood pellets market share in 2022 due to the widespread use of wood pellets for home heating in areas with a high number of pellet heating systems. The high uptake ofwood pellets by the residential sector is driven by factors such as local demand, and environmental awareness. In addition, government incentives and subsidies further promote the adoption of wood pellet heating for homeowners.

Geographical Analysis

Based on region, the global wood pellets market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

North Americaaccounted for largest market share in 2022, as the region benefits from abundant and sustainable biomass resources, large-scale production facilities, and an export-oriented wood pellets market, which strengthens its ability to accommodate international demand. Favorable renewable energy policies, environmental considerations, and a strong commitment to quality and sustainability standards further bolster North America's position. In addition, co-firing of wood pellets in power generation and the presence of major industry players also contribute to market progress. Thus, with a conducive climate for biomass growth and a robust domestic and export market, North America's role in the wood pellets market remains prominent.

Europe is projected to experience rapid growth over the forecast period due to its ambitious renewable energy goals, favorable policies regarding biomass energy, and a strong dedication to achieving carbon neutrality. Wood pellets are utilized extensively in various applications such as district heating systems, power generation, and reducing carbon emissions. This upsurge in demand for wood pellets is driven by the region's emphasis on technological advancements, increased environmental consciousness, and adherence to rigorous sustainability criteria.

Competitive Landscape

The global wood pellets market study will provide valuable insights with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies, such as partnerships, mergers & acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their respective market shares across different regions. Expansion & investments are the major strategic initiatives adopted by companies in this sector. Industry players are investing heavily in R&D activities, building new manufacturing facilities, and supply chain optimization.

The major players in the Wood Pellets Market are:

  • Enviva LP
  • Graanul Invest
  • drax
  • Sinclar Group Forest Products
  • Lauzon
  • Wood Pellet Energy UK (LTD).
  • United Company
  • Highland Pellets, LLC.
  • ENERGEX PELLET FUEL, INC.
  • SAVOIE

Key Developments

  • January 2021 (Investment): The United States implemented a recent Investment Tax Credit (ITC) for Wood and Pellet Heaters. This initiative allows consumers who purchase highly efficient wood, pellet stoves, or larger residential biomass heating systems to claim a tax credit of 26% on the total cost, including both the purchase and installation expenses. The credit is not capped, meaning there are no limitations on the amount that can be claimed.

The global Wood Pellets Market is segmented as:

By Application

  • Heating
  • Power Generation
  • CHP

By End Use

  • Residential
  • Commercial
  • Industrial

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • France
    • U.K.
    • Spain
    • Germany
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC
    • North Africa
    • South Africa
    • Rest of Middle East & Africa
  • Latin America
    • Brazil
    • Argentina
    • Rest of Latin America.
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  • Check Icon Cross Segment Analysis
  • Check Icon Regional Market Dynamics
  • Check Icon Country-Level Trend Analysis
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  • Check Icon Extended Forecast Years
  • Check Icon Historical Data Up to 5 Years
Frequently Asked Questions (FAQ's)
Global wood pellets is projected to reach USD 24.18 billion by 2030, growing at a CAGR of 8.46% from 2023 to 2030.
Global wood pellets market was valued at USD 12.73 billion in 2022.
The major driving factors for the market growth are growing industrial use of wood pellets in industrial sector along with increased on biomass energy.
Top manufacturers of wood pellets market are Enviva LP, Graanul Invest, Drax, Sinclar Group Forest Products, Lauzon, Wood Pellet Energy UK (LTD)., United Company, Highland Pellets, LLC., ENERGEX PELLET FUEL, INC., and SAVOIE, among others.
Europe is the fastest growing region in the forecasted period (2023-2030).
By application, power generation segment will hold the maximum share in the wood pellets market in forecast period.
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