Download Sample, Wood Pellets Market is Still Being Supported by Demand for Carbon-Neutral and Sustainable Fuel
The demand for wood pellets in the commercial sector is anticipated to continue increasing over the forecast period due to the commercial heating industry, which represents a sizable potential market for pellets and is already showing some promising developments in Eastern Europe. They have the capacity to produce huge quantities of potable or non-potable hot water, which may be used in large central heating systems to supply process heat during a particular stage of a manufacturing process. New power generation facilities are being built, and old ones are being expanded in order to meet the increasing demand for energy globally. Due to the strict implementation of rules relating to carbon emissions, businesses are choosing renewable sources to generate power, which will increase the demand for wood pellets over the forecast period.
Over the forecast period, rising energy consumption in the Asia Pacific is anticipated to increase product demand. The region's increasing population and rate of urbanization are the major causes of this. Additionally, the region's expanding industrial and transportation sectors have required increased energy demand in recent years, which has boosted revenue growth. Additionally, it is anticipated that rising outdoor cooking and outdoor kitchen trends in developed North American and European nations will spread the use of wood pellets, acting as a substantial driver for revenue development.
Over the forecast period, rising energy consumption in the Asia Pacific is anticipated to increase product demand. The region's increasing population and rate of urbanization are the major causes of this. Additionally, the region's expanding industrial and transportation sectors have required increased energy demand in recent years, which has boosted revenue growth. Additionally, it is anticipated that rising outdoor cooking and outdoor kitchen trends in developed North American and European nations will spread the use of wood pellets, acting as a substantial driver for revenue development.
Environmental Concerns are Expected to Push Wood Pellets Market Growth
The rising usage of wood pellets for heating purposes, such as pellet stoves, kitchen appliances, small boilers, etc., in various developed countries is the main driver of the segment's growth. The product also becomes more popular because of its lower ash content. The expanding usage of high-quality heating fuel and growing concern about the impacts of carbon emissions will both serve to increase demand for products in this market. Compared to fossil fuels like natural gas and heating oil, wood pellets made from sawdust and wood shavings are safer for the environment. Low concentrations of hydrocarbons like carbon dioxide (CO2) and methane are generated by wood pellets. Furthermore, moving from coal or natural gas to wood pellets reduces greenhouse gas (GHG) emissions since wood pellets are carbon neutral.
In order to combat climate change and maintain its commitment to the Paris Agreement, Canada unveiled measures in December 2018 that will phase out power generated by coal and natural gas by 2030. The Canadian government's policy on greenhouse gas (GHG) emissions is anticipated to increase investment in the wood pellet market since wood pellets are seen as an effective substitute for the generation of green electricity.
In order to combat climate change and maintain its commitment to the Paris Agreement, Canada unveiled measures in December 2018 that will phase out power generated by coal and natural gas by 2030. The Canadian government's policy on greenhouse gas (GHG) emissions is anticipated to increase investment in the wood pellet market since wood pellets are seen as an effective substitute for the generation of green electricity.
Recent Trends in the Wood Pellets Industry
- Increasing demand for sustainable heating fuels drives the wood pellets market.
- Growth in residential and industrial biomass heating boosts wood pellets.
- Expansion of renewable energy initiatives propels the wood pellets market.
- Growing awareness of carbon-neutral heating options drives wood pellets demand.
- Government incentives for biomass energy contribute to wood pellets market expansion.
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Trees Damaged by Fire Provide a New Source to Increase the Production of Pellets
Manufacturers in the wood pellet industry are expanding their feedstock by using fire-damaged trees in addition to sawmill by-products and shavings. As a result of implementing these methods to improve their production volumes, stakeholders in Europe and Asia are gaining popularity. They are taking advantage of small-scale possibilities in the booming energy sector, which is driving up demand for wood pellets. In the energy sector, these wood pellets are gradually replacing fossil fuels. According to research done at a power station in the UK, wood pellets helped to dramatically reduce GHG (Greenhouse Gas) emissions compared to coal, even after taking into consideration emissions from fossil fuels throughout the supply chain during harvesting. Based on these discoveries, businesses in the wood pellet industry are increasing their production capacity by using forests that are sustainably sourced.
Lack of Consumer Awareness of Products in Developing Countries Might Limit Wood Pellets Market Growth
Although the market for wood pellets is expanding among end-user businesses for heating applications, the industry may be hampered by a lack of product awareness in emerging markets. However, with the increasing trend toward clean energy, there is a significant opportunity for developing nations in Asia, Africa, and Latin America to produce biomass pellets from easily accessible agricultural and forestry waste for use in cooking, heating, and power, which will significantly raise demand for the product in the forthcoming years.
Brazilian eucalyptus wood pellets are being used by Harvard start-up BiomassTrust to expand the use of sustainable bioenergy on a worldwide scale. To profit on the need for sustainable bioenergy, businesses in the wood pellets sector are drawing lessons from such breakthroughs. Manufacturers and start-ups are stepping up R&D to remove chlorine from this plant and commercialize the technique since burning pellets made from tropical eucalyptus trees might produce dangerous pollutants.
One of the largest wood pellet producers in the world, Enviva, announced in April 2022 that it will invest around $250 million in Bond, Mississippi to build a new wood pellet production facility. The factory is a key component of the company's expansion strategy, which seeks to double production capacity over the next five years from the current 6.2 million metric tonnes per year to about 13 million metric tonnes per year.
The international distributor of sustainable bioenergy pellets located in Canada, Pinnacle Renewable Energy Inc., and the British energy firm Drax Group plc have announced that the acquisition of Pinnacle by Drax has been completed.
The manufacturers of wood pellets have amassed a sizable client base by using premium packaging to improve brand recognition and diversify their brand portfolio. These players also work with a larger network of distributors and OEMs in the sector, as well as law enforcement organizations. On the international wood pellets market, some prominent participants are: Drax Biomass, Pinnacle, Sinclar Group Forest Products, Energex, Enviva LP, Graanul Invest, Lauzon, Wood Pellet Energy (UK) Ltd., United Company, I.C.S. (Lacroix) Lumber Inc., Highland Pellets LLC, Groupe Savoie Inc., Vermont Wood Pellet Company, AVPGroup, and Farm Fuels
Brazilian eucalyptus wood pellets are being used by Harvard start-up BiomassTrust to expand the use of sustainable bioenergy on a worldwide scale. To profit on the need for sustainable bioenergy, businesses in the wood pellets sector are drawing lessons from such breakthroughs. Manufacturers and start-ups are stepping up R&D to remove chlorine from this plant and commercialize the technique since burning pellets made from tropical eucalyptus trees might produce dangerous pollutants.
One of the largest wood pellet producers in the world, Enviva, announced in April 2022 that it will invest around $250 million in Bond, Mississippi to build a new wood pellet production facility. The factory is a key component of the company's expansion strategy, which seeks to double production capacity over the next five years from the current 6.2 million metric tonnes per year to about 13 million metric tonnes per year.
The international distributor of sustainable bioenergy pellets located in Canada, Pinnacle Renewable Energy Inc., and the British energy firm Drax Group plc have announced that the acquisition of Pinnacle by Drax has been completed.
The manufacturers of wood pellets have amassed a sizable client base by using premium packaging to improve brand recognition and diversify their brand portfolio. These players also work with a larger network of distributors and OEMs in the sector, as well as law enforcement organizations. On the international wood pellets market, some prominent participants are: Drax Biomass, Pinnacle, Sinclar Group Forest Products, Energex, Enviva LP, Graanul Invest, Lauzon, Wood Pellet Energy (UK) Ltd., United Company, I.C.S. (Lacroix) Lumber Inc., Highland Pellets LLC, Groupe Savoie Inc., Vermont Wood Pellet Company, AVPGroup, and Farm Fuels
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Europe Regional Revenue Share is Set to Increase Owing to Rising Focus on Renewable Energy Sources
The largest market for wood pellets used in the electricity generation process is in Europe. Because of government incentives for using renewable energy sources, it is predicted that demand for wood pellets will rise throughout the projected period.
Due to the increasing number of power plants in the nation, the demand for wood pellets used to fuel power plants for the purpose of producing electricity is anticipated to increase significantly. In the east and the province of Guangdong, China has banned the use of coal-fired boilers. Additionally, market expansion is projected as a result of the low price of pellets in the aforementioned regions. The regional price competitiveness with propane and domestic heating oil, together with the growing replacement of conventional burners for improved automated feed-in & comfort, are the primary factors influencing the market for wood pellets in North America.
Due to the increasing number of power plants in the nation, the demand for wood pellets used to fuel power plants for the purpose of producing electricity is anticipated to increase significantly. In the east and the province of Guangdong, China has banned the use of coal-fired boilers. Additionally, market expansion is projected as a result of the low price of pellets in the aforementioned regions. The regional price competitiveness with propane and domestic heating oil, together with the growing replacement of conventional burners for improved automated feed-in & comfort, are the primary factors influencing the market for wood pellets in North America.
The report provides a detailed overview of the wood pellets market insights in regions including North America, Latin America, Europe, Asia-Pacific, Oceania, and the Middle East and Africa. The country-specific assessment for the wood pellets market has been offered for all regional market shares, along with forecasts, market scope estimates, price point assessment, and impact analysis of prominent countries and regions. Throughout this market research report, Y-o-Y growth and CAGR estimates are also incorporated for every country and region, to provide a detailed view of the wood pellets market. These Y-o-Y projections on regional and country-level markets brighten the political, economic, and business environment outlook, which is anticipated to have a substantial impact on the growth of the wood pellets market. Some key countries and regions included in the wood pellets market report are as follows:
| North America | United States, Canada |
| Latin America | Brazil, Mexico, Argentina, Colombia, Chile, Rest of Latin America |
| Europe | Germany, United Kingdom, France, Italy, Spain, Russia, Poland, Netherlands, Switzerland, Belgium, Austria, Sweden, Norway, Denmark, Finland, Ireland, Rest of Europe |
| Asia Pacific | China, India, Japan, South Korea, Australia & New Zealand, Indonesia, Singapore, Malaysia, Vietnam, Thailand, Rest of Asia Pacific |
| Middle East and Africa | GCC Countries, South Africa, Nigeria, Egypt, Morocco, Algeria, Israel, Iran, Kenya, Turkey, Rest of MEA |
Wood Pellets Market Research Report Covers In-depth Analysis on:
- Wood pellets market detailed segments and segment-wise market breakdown
- Wood pellets market dynamics (Recent industry trends, drivers, restraints, growth potential, opportunities in wood pellets industry)
- Current, historical, and forthcoming 10 years market valuation in terms of wood pellets market size (US$ Mn), volume (Tons), share (%), Y-o-Y growth rate, CAGR (%) analysis
- Wood pellets market demand analysis
- Wood pellets market pricing analysis over the forecast period (by key segment and by region)
- Wood pellets market regional insights with a region-wise market breakdown
- Competitive analysis – key companies profiling including their market share, product offerings, and competitive strategies.
- Latest developments and innovations in the wood pellets market
- Regulatory landscape by key regions and key countries
- Supply chain and value chain analysis in the wood pellets market
- Wood pellets market sales and distribution strategies
- A comprehensive overview of the parent market
- A detailed viewpoint on the wood pellets market forecast by countries
- Mergers and acquisitions in the wood pellets market
- Essential information to enhance market position
- Robust research methodology
- Frequently Asked Questions -
What factors are driving the growth of the wood pellets market?
The growth of the wood pellets market is largely driven by increasing demand for renewable energy, government incentives for green energy solutions, and the rising awareness of sustainability in energy production.
How is the demand for wood pellets expected to evolve in the next decade?
The demand for wood pellets is expected to increase significantly as more countries transition towards renewable energy sources, with continuous growth anticipated in both residential and industrial sectors.
What challenges does the wood pellets industry face?
The wood pellets industry faces challenges like fluctuations in raw material availability, regulatory changes, competition from other renewable energy sources, and logistical issues related to transportation and distribution.
