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Wood Pellets Market By Application (Pellet Stove Inserts, Pellet Boilers, Free Standing Pellet Stoves), By End-use (Heat Generation, Power Generation, Co-firing, Combined Heat & Power (CHP), Others) - Growth, Share, Opportunities & Competitive Analysis, 2018 – 2026

Industry Outlook

In terms of market volume, the global market for wood pellets stood at 28,408.9 Kilo Tons in 2017 and expected to reach 49,595.5 Kilo Tons by 2026, expanding at a CAGR of 6.6% during the forecast period from 2018 to 2026. Europe dominated the wood pellets market in 2017 and expected to retain market dominance throughout the forecast period. However, Asia Pacific is identified as the fastest growing market during the forecast period.

Wood pellets are a type of fuel that are made from sawdust and industrial wastes involving manufacturing of wood products such as furniture, construction and milling lumber. Wood pellets are considered as a viable alternative to fossil fuels such as natural gas or coal. Virgin trees are most suitable for producing wood pellets. Wood pellets are cylindrical in shape and have a diameter of 6-12 mm and a length of 1-3 cm. Wood pellets are dry, therefore can be easily stored. Further, the hydraulic rate of wood pellets is stable when compared with other biomass fuels. Moreover, wood pellets have a high energy density, making allowing them to be transported for long distances. Wood pellets also emit lower amounts of carbon dioxide (CO2), thus making them a suitable alternative to fossil fuels.

Rising demand for renewable energy is a key factor driving the growth of the wood pellets market at present. Wood pellets are considered to be a source of renewable energy and are easily available, thus making it an important source of energy. Further, wood pellets are carbon dioxide (CO2) neutral i.e. the carbon that is released during the burning process is a part of natural circulation of carbon. Wood pellets do not require a high initial investment, thereby making them a suitable alternative to conventional fossil fuels. Europe is by far the largest consumer of wood pellets and it accounts for almost half of the regions renewable energy consumption. In countries such as Finland and Poland, wood accounts for close to 70% of the renewable energy demand. In addition, growing concerns over industrial pollution has led the governing bodies of several countries to shift to renewable sources of energy such as wood fuel. Industries contribute significantly to the economic development and welfare of a country, however, the pollution emitted from industrial activities poses significant threat to the environment. In U.S., more than 5 billion metric tons of carbon dioxide (CO2) were generated from energy consumption in 2017. Further in 2016, more than 35 billion metric tons of CO2 emissions were generated from fossil fuels and cement across the globe. These factors have paved the way for the heightened demand for wood pellets. However, rising construction activities have paved the way for deforestation, which is a key factor restraining the growth of the market.

Market Synopsis: Value

Wood Pellets Market

Heat Generation, Based on End-use is Likely to Continue Dominating the Wood Pellets Market in the Coming Years

Based on end-use, the heat generation segment accounted for the dominant share in 2017 and is likely to display similar trends in the coming years as well. This segment witnessed a steady growth in the past decade owing to the rising cost of alternative heating fuels. Wood pellets combined with the right type of heating devices such as pellet boilers and pellet stove inserts can transform more than 90% of the energy contained in the fuel into usable heat. Further, usage of wood pellets for heating purposes also has very less effect on the environment since wood absorbs the same amount of carbon dioxide as emitted during the combustion process.

However, the power generation segment is identified as the fastest growing segment during the forecast period from 2018 to 2026. Growing incidences of industrial pollution have created concerns over human health. Further, fossil fuels emit several air pollutants that have adverse effects on the environment as well. Sulfur dioxide (SO2) is emitted through the burning of coal and can result in acid rain and the formation of harmful particulate matters. Further, SO2 emissions also result in respiratory ailments such as nasal congestion, asthma, pulmonary inflammation and various others. Nitrogen oxide (NOX), a byproduct of fossil fuel combustion can result in acid rain or smog, which can make people more vulnerable to bronchitis, and asthma among others. These factors have created concerns over environmental pollution and on human health as well, which in turn has urged the commercial industries to shift to cleaner sources of energy such as wood pellets, which poses minimal threat to the environment.

Wood Pellets Market

Europe Likely to Dominate the Wood Pellets Market During the Forecast Period

The global market for wood pellets was dominated by Europe in 2017 and the region is expected to retain its dominance throughout the forecast period. The region is massive consumer for pellets. A major portion of the wood pellets that are produced in the region are used for heat generation. However, the growth of the wood pellet market in region is going through a slowdown on account of mild winters and low price of fossil fuels, growing competition from other technologies and declining sales of pellet heating appliances. Due to these factors, several producers of wood pellets operating in the region have overproduced in 2016, resulting in overstock. However, the power generation sector is witnessing a robust growth in United Kingdom and Belgium. The wood pellets industry in Belgium is primarily driven by the presence of large scale power plants, and the EU 20 percent renewable fuels target for energy use by 2020. Further, the wood pellet production in Germany has witnessed a promising growth over the past few years, making it the biggest producer of wood pellets in the European Union. Rising local consumption of wood pellets coupled with the increasing demand for pellet boilers and pellet stoves are some of the key factors driving the growth of the wood pellets market in Germany. Moreover, the optimistic growth of wood pellets in the country is also attributed to the ENplus certification of wood pellets. The country’s target is to increase the share of renewable energy consumption to approximately 18% by the end of 2020.

However, the demand for wood pellets in Asia Pacific is expected to witness a significant growth during the forecast period from 2018 to 2026. Demand for renewable energy in the region is on the rise as the governments are seeking alternatives to fossil fuels in order to reduce carbon footprint and to ensure long term energy security. China is expected to be one of the key markets for wood pellets in the coming years. Rapidly growing population, insatiable demand for energy, rising pollution levels are some of the key factors that are expected to augment demand for wood pellets in China in the coming years. Further, Malaysia is aiming to increase its share of renewable energy to 17% by 2030, while Thailand is aiming to increase its share to 25% by 2030. These factors are expected to augment market demand for wood pellets in Asia Pacific in the coming years.

Wood Pellets Market

Collaborations & Joint Ventures are Some of the Key Strategies of the Companies Operating in the Wood Pellets Market

Key players operating in the global wood pellets market include Agon Biomass, AS Graanul Invest, Drax Biomass Inc., Enviva Partners LP, German Pellets GmbH, Pinnacle Renewable Energy Inc., Premium Pellet Ltd., Rentech Inc., Viridis Energy Inc., and Zilkha Biomass Energy LLC among others.

In October 2018, Enviva Partners LP formed an off-take agreement to supply 180,000 metric tons of wood pellets per year to Marubeni Corporation for a period of 15 years starting from 2022. Further, in September 2018, Pinnacle Renewable Holdings Inc. acquired 70% stake in an industrial wood pellet production facility that is located in Aliceville, Alabama from the Westervelt Company. The production plant at Aliceville produces approximately 270,000 metric tons of wood pellets annually for industrial use. This acquisition is expected to increase the production capacity of Pinnacle Renewable Holdings Inc., for wood pellets, and also expected to enhance the company’s position in the South East U.S., which is one of the major fiber baskets in North America.

Wood Pellets Market

Historical & Forecast Period

2016 – Historical Year

2017 – Base Year

2018-2026 – Forecast Period

Our study analyzed each market segment during the period from 2016 to 2026 with 2017 as the base year. Forecast period between 2018 and 2026 considered for the CAGR calculation.

Report Scope

The report enlightens the thorough outline of global wood pellets market by categorizing the market in different segment given below:

Application Segment (2016–2026; Kilo Tons, US$ Bn)

  • Pellet Stove Inserts
  • Pellet Boilers
  • Free Standing Pellet Stoves

End-use Segment (2016–2026; Kilo Tons, US$ Bn)

  • Heat Generation
    • Residential Heating
    • Commercial Heating
  • Power Generation
  • Co-firing
  • Combined Heat & Power (CHP)
  • Others (absorbents, horse bedding)

Geography Segment (2016–2026; Kilo Tons, US$ Bn)

  • North America
    • United States
    • Canada
  • Europe
    • Germany
    • U.K.
    • France
    • Rest of Europe
  • Asia Pacific (APAC)
    • China
    • India
    • Japan
    • Rest of Asia Pacific
  • Latin America (LATAM)
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa (MEA)
    • GCC
    • Rest of Middle East & Africa

Wood Pellets Market

This research report describes leading continents and their major countries, along with profiles of key players operating in overall market and their planned developments. Our report further defines the overall market dynamics such as drivers, challenges, and opportunities prevalent in the market to understand global wood pellet market more explicitly. Our in-depth quantitative and quantitative analysis of each segment up to country level highlights revenue pockets and investment opportunities in the market.

Key questions answered in this report

  • Who are the major manufacturers and distributors operating in wood pellets market?
  • What are the largest segments in the market during the forecast period from 2018 to 2026?
  • Which are the fastest growing segments in the market for the forecast period?
  • What are the current market trends in the wood pellets market and valuable opportunities for the players?
  • How are the regulatory frameworks affecting the global as well as regional markets?
  • Which are the key players operating in the global market and the strategies adopted by them?
  • What is the market size and trend in emerging and developed markets?
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Published Date:  Nov 2018
Category:  Energy
Report ID:   58698
Report Format:   PDF
Pages:   120
Rating:    4.3 (55)
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