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Wood Pellets Market Projected to Reach USD 14.35 Billion by 2031, Driven by Surging Demand for Sustainable Energy Sources

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The SNS Insider report indicates that the global wood pellets market enjoyed a valuation of USD 9.12 billion in 2023.  Projections estimate a surge to USD 14.35 billion by 2031, exhibiting a CAGR of 5.7% throughout the forecast period (2024-2031).

Market Analysis

Wood pellets, derived from compressed forest by-products such as sawdust and agricultural waste, are a versatile and sustainable fuel source. Escalating primary fuel prices fuels their popularity globally.  The rising demand for biomass fuel for industrial and commercial purposes, coupled with the easy availability of pellets and low production costs, are major drivers within the industrial sector.

Rapid industrialization has intensified CO2 emissions and accelerated climate change. Governments worldwide are combating climate change by incentivizing the adoption of renewable technologies. Federal incentives extend to corporations, nonprofits, and community projects, including the Modified Accelerated Cost Recovery Scheme (MACRS), subsidies, and business tax incentives. These governmental support measures, including subsidies and business tax incentives offering tax breaks and investment grants, are instrumental in fostering market growth.

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Some of the Key Players Included are:

  • Energex
  • Enviva LP
  • Graanul Invest
  • Drax Biomass
  • Pinnacle
  • Sinclar Group Forest Products
  • Lauzon
  • Wood Pellet Energy (UK) Ltd.
  • United Company
  • Highland Pellets LLC

Increasing Demand for Electricity Increases the Demand for Wood Pellets

Population growth, flourishing industries, and infrastructure expansion are surging the electricity demand.  Regions worldwide are augmenting their generation capacity, either expanding existing plants or building new ones.  As a key strategy for tackling climate change, minimizing GHG emissions, and fulfilling Kyoto Protocol agreements, wood pellets are gaining global recognition.

Recent Developments:

  • In August 2022, Drax Groupacquired a Canadian pellet plant from Princeton Standard Pellet Corporation (PSPC) to boost its production capacity and reach its target of 8 million tons per year by 2030.
  • In April 2021, Drax Groupacquired Pinnacle Renewable Inc., a Canadian pellet producer, to strengthen its presence in the North American market.

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Segment Analysis

By Application: The power Generation (29.3% market share in 2023) segment dominated due to the rising demand for electricity driven by urbanization, industrialization, and population growth. Biomass gasifiers are gaining traction for decentralized power generation in rural areas.

By End-Use: Industrial led the market with the highest revenue share in 2023. The global push for CO2 emission reduction, particularly in the industrial sector, is fueling demand for wood pellets as a cleaner alternative to fossil fuels. Studies show wood pellets can reduce greenhouse gas emissions by over 50% compared to traditional options

By Application

  • Heating
  • Power Generation
  • CHP

By End-use

  • Residential
  • Commercial
  • Industrial

Impact of Global Events

The ongoing war has significantly impacted the wood pellet market in several ways

Sanctions on Russia and Belarus, major wood pellet exporters, have disrupted traditional supply chains, leading to shortages and price hikes in Europe. Europe’s efforts to reduce reliance on Russian gas have boosted demand for wood pellets as a substitute fuel source, further tightening supply. Rising fuel prices and transportation disruptions are making it more expensive to move wood pellets around the world.

Europe currently dominates the market share, with key players transitioning from coal-based power plants to biomass.

Governments across Europe are prioritizing wood pellets and other renewables to achieve energy commitments and generate electricity from biomass. The Drax Group, for instance, is converting its units from coal to wood fuel in response to stringent U.K. government limits on CO2 emissions.  Insufficient European domestic pellet production necessitates significant imports. According to the Global Agricultural Information Network (GAIN), in 2021 Europe imported roughly 5.4 million tons of wood pellets valued at USD 924 million. Great Britain is the biggest consumer of pellet-based energy in Europe, using over 8 million tons annually.

Key Takeaways

  • The wood pellet market is experiencing growth due to rising demand for renewable energy and government support for reducing carbon emissions.
  • Supply chain disruptions, economic slowdowns, and geopolitical events can significantly impact the market.
  • Europe and North America are key regions for wood pellet consumption, with different drivers for demand in each region.
  • The market offers opportunities for producers who can ensure sustainable sourcing and efficient supply chains.
Wood-Pellets-Market
Wood-Pellets-Market

Table of Contents – Major Key Points

  1. Introduction
  2. Research Methodology
  3. Market Dynamics
  4. Impact Analysis
    • COVID-19 Impact Analysis
    • Impact of Ukraine- Russia war
    • Impact of ongoing Recession
  5. Value Chain Analysis
  6. Porter’s 5 Forces Model
  7. PEST Analysis
  8. Wood pellets market Segmentation, By Application
  9. Wood pellets market Segmentation, By End-use
  10. Regional Analysis
  11. Company Profiles
  12. Competitive Landscape
  13. Use Case and Best Practices
  14. Conclusion

Buy the Latest Version of Wood Pellets Market Report 2024-2031 @  https://www.snsinsider.com/checkout/3085

About Us:

SNS Insider is one of the leading market research and consulting agencies that dominates the market research industry globally. Our company’s aim is to give clients the knowledge they require in order to function in changing circumstances. In order to give you current, accurate market data, consumer insights, and opinions so that you can make decisions with confidence, we employ a variety of techniques, including surveys, video talks, and focus groups around the world.



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