Outlook: Wood Pellets Market Poised for USD 24,345.6 Million Valuation by 2033, with a CAGR of 10.2% | FMI Reports

wood pellets

The wood pellets market is poised for substantial growth, projected to reach a valuation of USD 10,037.6 million in 2023 and expected to escalate to USD 24,345.6 million by 2033, with sales anticipated to achieve a noteworthy CAGR of 10.2% throughout the forecast period.

This growth is driven by increasing environmental concerns and governmental initiatives aimed at promoting sustainability. Wood pellets, derived from renewable sources such as wood waste, sawdust, and agricultural residues, are increasingly favored for heating and power generation, offering a cleaner and more sustainable alternative to fossil fuels.

Global efforts to advance renewable energy sources are propelling the expansion of the wood pellets market. Governments worldwide are implementing policies and incentives to support renewable energy adoption, thereby boosting demand for wood pellets. Their high energy density, low emissions profile, and logistical advantages in storage and transportation make wood pellets increasingly preferred across various applications.

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Investments in production capacity and advancements in pellet manufacturing technology are further accelerating market growth. As awareness of climate change and the necessity for sustainable energy solutions continues to grow, the demand for wood pellets is expected to rise significantly.

In North America, the United States dominates the wood pellets market, with revenue projected to reach USD 200 million in 2022. Increasing residential adoption of wood pellet stoves, known for their cost-efficiency compared to natural gas, and incentives such as the Wood and Pellet Heater Investment Tax Credit (ITC) are driving market expansion in the region.

Europe holds a substantial share of approximately 78% in the global wood pellets market, driven by widespread use in power boilers and residential heating. Stringent carbon emissions regulations in the European Union have spurred sales of wood pellets, particularly in countries like France, Austria, Italy, and Germany, where adoption rates are notably high.

The Asia Pacific region, contributing 11% of the market share, presents promising growth prospects. The region’s numerous coal-fired power plants create opportunities for wood pellets to substitute coal in power generation through thermal upgrading technology.

The residential sector is a significant market segment, generating USD 3.5 billion in revenue. Wood pellets are increasingly popular among households due to their environmentally friendly attributes, utilized not only for cooking and heating but also as cat litter and horse bedding. This diverse range of applications is expected to sustain demand growth in the residential sector.

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Recent Developments

Drax announced the acquisition of the whole issued share capital of Pinnacle Renewable Inc. in April 2021. Pinnacle may continue to be headquartered in British Columbia as a subsidiary of Drax. Over 480 Pinnacle workers, including current leadership, may be welcomed into the Drax Group.

July 2020 – Enviva paid US$ 164.0 million in cash for all limited liability interests in Georgia Biomass Holding LLC, a Georgia limited company and indirect owner of a wood pellet manufacturing facility in Waycross, Georgia, after accounting for certain collateral adjustments. Georgia Biomass was acquired as a business combination and accounted for using the purchase method.

Enviva Partners L.P. built a new manufacturing factory in Lucedale, Mississippi, in October 2019. These new factories may cost the corporation about US$ 140 million. The firm has eight production sites in the southeastern United States, producing more than 3 million metric tonnes of pellets yearly. The construction of these additional plants can take 15 to 18 months.

Key Companies Profiled

  • Energex
  • Enviva LP
  • Graanul Invest
  • Drax Biomass
  • Pinnacle
  • Sinclar Group Forest Products
  • Lauzon
  • Wood Pellet Energy (UK) Ltd.
  • United Company
  • Highland Pellets LLC
  • Groupe Savoie Inc.
  • I.C.S. (Lacroix) Lumber Inc.

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Key Segments Covered in the Wood Pellets Market Report

Wood Pellets Market by Feedstock:

  • Forest and Wood Waste Resources
  • Agricultural Residue and Waste
  • Food Waste
  • Virgin Lumber
  • Energy Crops

Wood Pellets Market by End User:

  • Wood Pellets for Residential/Commercial Heating
  • Wood Pellets for CHP/District Heating
  • Wood Pellets for Co-firing

By Region:

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • Asia Pacific Excluding Japan (APEJ)
  • Japan
  • The Middle East & Africa (MEA)

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Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.

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