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The wood pellets market is estimated to grow at a CAGR of 7.84% between 2022 and 2027. The market size is forecasted to increase by USD 5,283.83 million. The growth of the market depends on several factors, including stringent regulations on CO2 emissions, the increasing use of bioenergy, and regulations for using bioenergy and modern heating systems.
This wood pellets market report extensively covers market segmentation by end-user (residential, commercial, and industrial), application (power generation, combined heat and power, and heating), and geography (Europe, North America, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increasing use of bioenergy is notably driving market growth, although factors such as installation requirements for biomass boilers and feedstock storage may challenge market growth. Our researchers analyzed the data with 2022 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 waste, and energy crops.
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 wood pellets 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.
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.
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, installation requirement for biomass boilers and feedstock storage is expected to halt the growth of the global wood pellets market during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Wood Pellets Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/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 research report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
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.
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The residential segment was valued at USD 4,805.35 million in 2017 and continued to grow by 2021. 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.
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Europe is estimated to contribute 73% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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.
In 2020, the outbreak of COVID-19 compelled governments of various countries, such as the UK, Italy, and Germany, to impose lockdowns. However, in 2021, with the initiation of vaccination drives, the number of COVID-19 cases decreased and lockdown restrictions were lifted. This led to the reopening of commercial space and offices and the resumption of manufacturing operations and various construction activities. These factors are expected to drive the growth of the market in Europe during the forecast period.
The wood pellets market report forecasts market growth by revenue at global, regional, & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the wood pellets market as a part of the global forest products market. Forest products include categories such as industrial roundwood, sawn wood, wood-based panels, fiber furnish, wood fuel, charcoal, and pellets. Technavio calculates the global forest products market size based on the combined revenue generated by manufacturers of forest and paper products. Our market research report has extensively covered external factors influencing the parent market growth during the forecast period.
Wood Pellets Market Scope |
|
Report Coverage |
Details |
Page number |
157 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.84% |
Market growth 2023-2027 |
USD 5,283.83 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
7.48 |
Regional analysis |
Europe, North America, APAC, Middle East and Africa, and South America |
Performing market contribution |
Europe at 73% |
Key countries |
US, UK, Italy, Denmark, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
AS Graanul Invest, Binderholz GmbH, Bio Eneco, BioPower Sustainable Energy Corp., 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 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 the forecast period |
Customization purview |
If our 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.
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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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