Market Overview
The global wood pellet market was valued at USD 14.8 Billion in 2025 and is projected to reach USD 23.3 Billion by 2034, growing at a CAGR of 5.20% during the forecast period 2026-2034. The growth is driven by rising demand for renewable energy, government initiatives to reduce carbon emissions, and increasing use in residential and industrial applications. Europe dominated the market in 2025 with over 47.9% share. Learn more at the Wood Pellet Market.Â
Study Assumption Years
- Base Year: 2025
- Historical Year/Period: 2020-2025
- Forecast Year/Period: 2026-2034
Wood Pellet Market Key Takeaways
- Current Market Size: USD 14.8 Billion in 2025
- CAGR: 5.20% (2026-2034)
- Forecast Period: 2026-2034
- Europe dominates the market with over 47.9% share in 2025.
- The market growth is fueled by government initiatives promoting carbon neutrality and renewable energy.
- Increasing usage in power generation and residential heating supports market expansion.
- Technological advancements improve pellet production efficiency and product quality.
- The U.S. is a key exporter with 9.5 million metric tons exported in 2023 valued at $1.75 billion.
Sample Request Link:
 https://www.imarcgroup.com/wood-pellet-market/requestsample
Market Growth Factors
The global wood pellet market grew because renewable energy demands rose globally, people became more aware of climate change, and governments paid more attention to carbon neutrality. Countries regulate carbon emissions with more strictness now, and they promote renewable energy sources over fossil fuels. For instance, coal co-firing in the reduction of emissions is supported by the commissioning of the Wood Pellet Pilot Plant by PT Bukit Asam Tbk in October 2024. Wood pellets are favored in household and industrial use for their high energy efficiency and their cost, which is lower than fossil fuels.
Government-sponsored policies, incentives, and mandates under the European Union Renewable Energy Directive drive the wood pellet market’s rapid growth. Wood pellets meet requirements for subsidies and rebates and tax credits. The U.S. Clean Air program provides incentives to replace aging home heating equipment with biomass-fueled equipment, creating increased demand for domestically produced wood pellets. Diverting wood by-products from waste disposal and deforestation increases pellet availability and reduces price, leading to a more widely used fuel.
Another aspect in the market growth is the environmental consciousness of consumers and businesses. Wood pellets burn without an increase in carbon because biomass growth takes in CO2 emissions. International parties commit to reduce greenhouse gas emissions by 42% by 2030 and reduce emissions by 57% by 2035, while pellet production advances and technology developers combust, so these actions drive the sector toward a larger market. Other policies that encourage include Canada funding Clean Fuels at $1.1 billion and the US Forest Service innovating with the Wood Innovations program.
Market Segmentation
Analysis by Feedstock Type:
- Forest Wood and Waste: Dominates with around 33.6% share in 2025, valued for cost-effectiveness and abundant availability. Residues like sawdust and wood chips support sustainable pellet production, reducing waste and carbon footprint.
Analysis by Application:
- Residential Heating: Leads the market with approximately 58.4% share in 2025. Wood pellets offer an environmentally friendly alternative for heating homes, supported by advancements in stove technology and government subsidies, especially in cold European regions.
Regional Insights
Europe is the dominant region, capturing over 47.9% of the global wood pellet market share in 2025. The region’s commitment to renewable energy, stringent environmental policies, and advanced pellet production infrastructure drive demand. The EU used 24.8 million metric tons of wood pellets in 2022, reflecting strong market growth. Continued investments in sustainable forestry and biomass energy projects reinforce Europe’s leadership position.
Recent Developments & News
- October 2024: BKtech expanded its wood pellet production capacity to meet rising global demand for sustainable energy.
- October 2024: Leag, an East German energy company, acquired Swedish pellet producer Scandbio AB and subsidiaries, enhancing its presence in the Scandinavian renewable biomass market.
- May 2023: Andritz AG introduced innovative technologies including the world’s first autonomous logyard crane and specialized biomass pellet mill.
- January 2023: Andritz AG collaborated with Stora Enso Oyj to deliver integrated solutions for biomass power and pulp mill upgrades in Finland.
- November 2021: Lignetics Inc. was acquired by EagleTree Capital, enhancing investment in the wood pellet sector.
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
Customization Note:
If you require any specific information that is not covered currently within the scope of the report, we will provide the same as a part of the customization.
Request For Customization:
https://www.imarcgroup.com/request?type=report&id=5088&flag=E
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 provide 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
