Enjoy complimentary customisation on priority with our Enterprise License!
The wood pellets market size is forecast to increase by USD 5.89 billion, at a CAGR of 8.09% between 2023 and 2028. The market's expansion hinges on various factors, notably stringent CO2 emission regulations and the rising adoption of bioenergy. Additionally, regulations governing the utilization of bioenergy and modern heating systems play a crucial role in shaping market dynamics. The drive towards sustainability and environmental consciousness has led to increased scrutiny and compliance with emissions standards, prompting industries to explore alternative energy sources such as bioenergy. Moreover, the emphasis on modern heating systems aligns with global efforts to reduce carbon footprints and transition towards cleaner energy solutions. As regulations evolve and technologies advance, businesses are compelled to innovate and invest in eco-friendly practices to meet regulatory requirements while contributing to a greener and more sustainable future.
The market is driven by a growing awareness of global warming and the need to reduce reliance on fossil fuels. This shift towards renewable energy sources like wood biomass is bolstered by partnerships with wood dealers, private landowners, and loggers ensuring a steady supply of woody feedstock. However, challenges such as transportation costs and the impact of pests like the mountain pine beetle and fire-damaged trees can disrupt supply chains. Ensuring carbon neutrality and addressing environmental concerns remain key trends in the market, especially in the industrial sector where power boilers are transitioning from Natural gas to LPG for reduced Greenhouse Gas (GHG) emissions. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing use of bioenergy is notably driving market growth. Stringent regulations on CO2 emissions have become important in recent years due to the negative impact of greenhouse gas emissions on the environment. Bioenergy is a sustainable alternative to fossil fuels. It is becoming popular due to its sustainability and low carbon emissions. Bioenergy is a renewable energy source that comes from organic matter such as wood pellets, agricultural residue, and energy crops.
Moreover, wood pellets are used for heating and power generation, as they are easily transportable, have a high energy density, and produce lower greenhouse gas emissions than fossil fuels. Bioenergy can play a major role in reducing greenhouse gas emissions and mitigating climate change. It can also contribute to energy security by lowering the dependence on imported fossil fuels, creating jobs in the local economy, and providing a reliable source of energy. Thus, the increasing use of bioenergy is expected to drive the growth of the global market during the forecast period.
The declining use of coal in the power industry is a key trend in the market. Coal power is gradually being replaced with clean fuels and sources. Renewable resources are posing tough competition to coal power. They have significantly lower or no emissions, which impacts their popularity on upcoming fossil fuel power projects. China is one of the largest producers of coal in the world, and the country is expected to cancel 103 coal power plants. This cancellation includes power plants under construction and in the planning stage. As a result, the loss in cumulative installed capacity is estimated to be 120 GW.
Moreover, the decline in coal power will increase the use of alternate sources of energy, such as wood pellets. For instance, as of January 31, 2023, India's established renewable power capacity was 168.4 GW, representing 40.9% of the general established energy capacity. Solar power is expected to make a contribution of 63.3 GW, observed via means of 41.9 GW from wind energy, 10.2 GW from biomass, 4.92 GW from small hydropower, 0.52 from waste to power, and 46.85 GW from hydropower. In March 2022, NTPC announced that it would start commercial operations of 74.88 MW capacity of its 296 MW Fatehgarh solar project in Rajasthan. Therefore, the decline in coal usage in the power industry is expected to impede market growth during the forecast period.
The installation requirement for biomass boilers and feedstock storage is challenging market growth. Biomass boilers using wood are larger than regular boilers. They also require storage containers/silos to store fuel such as wood chips, pellets, or logs. However, storage of fuel is a challenge for industries that are close to urban areas due to constraints on space. Moreover, the installation of boilers is subject to design, construction, operation, maintenance standards, and regulations set by governments, which vary across regions. Biomass boilers are relatively new in terms of use when compared with conventional boilers. Their installation will pose technological challenges in terms of design, emission control, and size of the boiler.
Moreover, the risk of explosion is also a concern related to conventional boilers. Power boilers pose several operational challenges related to rapid startup capabilities and operating efficiencies. Complex failure paths influenced by thermal transients are difficult to understand. In addition, these boilers require maintenance to address design issues to prevent risks. Thus, the installation requirement for biomass boilers and feedstock storage is expected to halt the growth of the global market during the forecast period.
The market share growth by the residential segment will be significant during the forecast period. Bioenergy can cater to the growing electricity and heating needs of residential end-users without significantly adding to carbon emissions.
Get a glance at the market contribution of the End User segment Request Free Sample
The residential segment was valued at USD 5.14 billion in 2018. Wood pellets have high bulk density. As a result, their storage requirement is low. Thus, the high bulk density of wood pellets is beneficial in areas where space is limited. Therefore, the use of wood pellets in urban areas is expected to increase. These factors are expected to drive the growth of the segment during the forecast period.
Europe is estimated to contribute 69% to the growth of the global market during the projection period. Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the projection period.
For more insights on the market share of various regions Request Free Sample
In addition, the UK, Italy, Germany, Denmark, Sweden, France, and Belgium are the leading revenue contributors to the market in Europe. The consumption of wood pellets is expected to increase the share of renewables in the final energy consumption due to strict policies. Strong policies are implemented to increase the use of wood pellets as a source of energy. Locally sourced wood pellets are gaining popularity, as they are made up of leftover wood materials. Wood pellets are among the fastest-growing biomass carriers, and they are used by residential, commercial, and industrial end-users. Moreover, wood pellets are priced lower than heating oils, which makes them economical. They are carbon neutral and environmentally friendly. Government support in the form of grants, subsidies, and incentives is increasing the consumption of wood pellets in the region during the forecast period.
Companies are implementing various market growth and forecasting strategies by analyzing factors such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product or service launches, to enhance their presence in the market.
Bio Eneco - The company offers wood pellets for biomass generation. It also offers a wide range of products such as wood chop, wood pellets, empty fruit bunch, and many more.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including: AS Graanul Invest, Binderholz GmbH, Bio Eneco, BioPower Sustainable Energy Corp., BrasPine Madeiras Ltda, CT Pellet, Drax Group Plc, ECARE, Energy Pellets of America LLC, Enviva Inc., Highland Pellets LLC, JP Green Fuels Pvt. Ltd., Land Energy Girvan Ltd., Laxmi Subhi Sales Corp., Lignetics Inc., Pfeifer Holding GmbH, PREMIUM PELLETS s.r.o, PRODESA, proPellets Austria, SNOW ENTITIES Inc., and VIRIDIS ENERGY INC.
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
The market is driven by increasing demand from the commercial and domestic heating sectors and power generation applications like biomass power generation. Wood pellet boilers and self-cleaning systems are widely used in heating applications. Lumber production and mill residuals are crucial feedstock sources, supported by sawmill residues and wood waste. Companies like Enviva Pellets Waycross and Drax Biomass play significant roles, with Drax power station exemplifying large-scale usage. Shipping firms facilitate wood pellet production plant operations, ensuring long-term supply agreements. The market benefits from biomass boiler grants and renewable energy sector incentives. Compliance with International Energy Agency standards and alternative sources like solar photovoltaic highlight the industry's growth. Greenhouse gases reduction, co-firing, and innovative products like eucalyptus wood pellets promote sustainability. Implementation of compliances, cell line development, and brand recognition enhance market dynamics, while LPG (Liquid Petroleum Gas) and hydrocarbons represent additional energy considerations.
Market Scope |
|
Report Coverage |
Details |
Page number |
162 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.09% |
Market Growth 2024-2028 |
USD 5.89 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.32 |
Regional analysis |
Europe, North America, APAC, Middle East and Africa, and South America |
Performing market contribution |
Europe at 69% |
Key countries |
UK, Italy, US, Denmark, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AS Graanul Invest, Binderholz GmbH, Bio Eneco, BioPower Sustainable Energy Corp., BrasPine Madeiras Ltda, CT Pellet, Drax Group Plc, ECARE, Energy Pellets of America LLC, Enviva Inc., Highland Pellets LLC, JP Green Fuels Pvt. Ltd., Land Energy Girvan Ltd., Laxmi Subhi Sales Corp., Lignetics Inc., Pfeifer Holding GmbH, PREMIUM PELLETS s.r.o, PRODESA, proPellets Austria, SNOW ENTITIES Inc., and VIRIDIS ENERGY INC. |
Market dynamics |
Parent market growth analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.