The global Wood Pellet Market was valued at USD 14.0 Billion in 2024 and is expected to reach USD 22.6 Billion by 2033. The market is projected to grow at a CAGR of 5.5% during the forecast period 2025-2033, driven by increasing demand for renewable energy, government incentives, advancements in pellet production technology, and environmental concerns promoting carbon neutrality.
STUDY ASSUMPTION YEARS
- Base Year: 2024
- Historical Year/Period: 2019-2024
- Forecast Year/Period: 2025-2033
WOOD PELLET MARKET KEY TAKEAWAYS
- Current Market Size: USD 14.0 Billion in 2024
- CAGR: 5.5%
- Forecast Period: 2025-2033
- Europe dominated the wood pellet market in 2024 with a market share of over 47.9%.
- Forest wood and waste constituted approximately 33.6% of the market in 2024, being the largest feedstock segment.
- Residential heating was the leading application segment, accounting for around 58.4% of the market in 2024.
- The U.S. wood pellet exports reached 9.5 million metric tons in 2023, valued at $1.75 billion.
- Growth is supported by government policies promoting renewable energy adoption and stricter carbon emission regulations.
Sample Request Link:Â
https://www.imarcgroup.com/wood-pellet-market/requestsample
MARKET GROWTH FACTORS
The global wood pellet market is on the rise, fueled by a growing appetite for renewable energy. With increasing environmental awareness and global commitments to cut down greenhouse gas emissions, wood pellets have emerged as a viable, sustainable fuel option. The UN Environment Programme’s Emissions Gap Report 2024 highlights that countries are aiming for a 42% reduction in emissions by 2030 and a 57% cut by 2035, emphasizing the importance of carbon-neutral energy sources like wood pellets. What makes wood pellets particularly appealing is their carbon-neutral nature; the CO2 released during combustion is balanced out by the CO2 absorbed while the biomass grows, making them a favorite among eco-conscious consumers and industries alike.
Government initiatives are also playing a crucial role in boosting the market globally. Numerous countries are promoting the use of wood pellets through renewable energy targets, subsidies, and regulations. For instance, the European Union Renewable Energy Directive has significantly enhanced the trade of pelletized wood fiber. In the U.S., initiatives like the Home Efficiency Rebate are encouraging the adoption of biomass heating systems, which in turn is driving up domestic wood pellet usage. Moreover, policies aimed at waste management and sustainable forestry are helping to make use of timber byproducts, improving market affordability and accessibility.
On the tech front, advancements have made pellet production more efficient and improved product quality. Innovations in pelletizing machinery and automation have ramped up production capacity while reducing costs. Research backed by initiatives like Canada’s Clean Fuels Fund, which has invested $1.1 billion, is pushing forward clean-burning pellet combustion technology to tackle emissions issues. The U.S. Department of Agriculture’s Forest Service is also lending a hand to local economies through programs like Wood Innovations and Community Wood Energy. These developments are paving the way for broader use of wood pellets in residential, industrial, and power generation sectors.
MARKET SEGMENTATION
Feedstock Type:
- Forest Wood and Waste
- Agriculture Residue
- Others
Description: Forest wood and waste dominate the feedstock segment with around 33.6% market share in 2024, owing to availability, cost-effectiveness, and sustainability as they comprise residues like sawdust, wood chips, and tree trimmings from forestry and wood processing industries.
Application:
- Power Plants
- Residential Heating
- Commercial Heating
- Combined Heat and Power (CHP)
- Others
Description: Residential heating leads with approximately 58.4% market share in 2024, driven by preferences for clean, sustainable fuel alternatives to fossil fuels, supported by technological advances, subsidies, and cold climates in Europe, enhancing demand.
Region:
- Asia Pacific
- Europe
- North America
- Latin America
- Middle East and Africa
Description: The market covers these regions extensively, reflecting varied adoption rates and growth opportunities aligned with renewable energy policies, infrastructure, and biomass resource availability.
REGIONAL INSIGHTS
Europe is the dominant region in the wood pellet market, holding over 47.9% market share in 2024. The continent’s robust renewable energy initiatives, stringent environmental regulations, and substantial biomass infrastructure fuel demand in residential heating and power generation sectors. Europe’s commitment to carbon neutrality and sustainable forestry further strengthens its leadership in the global wood pellet industry.
RECENT DEVELOPMENTS & NEWS
- October 2024: BKtech announced a major expansion of its wood pellet production capacity to meet rising global demand for sustainable energy in industrial applications and power generation.
- October 2024: East German company Leag signed an acquisition agreement with Swedish wood pellet producer Scandbio AB and its subsidiaries, marking Leag’s entry into the Scandinavian biomass market.
- May 2023: Andritz AG introduced new technologies, including the world’s first autonomous logyard crane, the ANDRITZ PM30-6 pellet mill for biomass, and an adjustable plug screw feeder.
- January 2023: Andritz AG collaborated with Stora Enso Oyj on an integrated solution for converting the Oulu pulp and paper mill in Finland, including new wood processing and biomass power boiler technologies.
- November 2021: Lignetics Inc. was acquired by EagleTree Capital, enhancing private equity investment in wood pellet production.
KEY PLAYERS
- Asia Biomass Public Company Limited
- Drax Group
- Enviva LLC
- Fram Fuels
- Groupe Savoie
- I.C.S. (Lacroix) Lumber Inc.
- Lauzon
- Lignetics Group
- Sinclar Group Forest Products
- Stora Enso
- Svenska Cellulosa Aktiebolaget SCA (publ)
- Vermont Wood Pellet Company
If you require any specific information that is not covered currently within the scope of the report, we will provide the same as part of the customization.
ABOUT US
IMARC Group is a global management consulting firm that helps the world’s most ambitious changemakers to create a lasting impact. The company provides a comprehensive suite of market entry and expansion services. IMARC offerings include thorough market assessment, feasibility studies, company incorporation assistance, factory setup support, regulatory approvals and licensing navigation, branding, marketing and sales strategies, competitive landscape and benchmarking analyses, pricing and cost research, and procurement research.
CONTACT US
IMARC Group
134 N 4th St. Brooklyn, NY 11249, USA
Email: sales@imarcgroup.com
Tel No: (D) +91 120 433 0800
United States: +1-201971-6302
