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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 kilos per tonne in 2017 and is expected to reach 49,595.5 kilos per tonne by 2026, expanding at a CAGR of 6.6% during the forecast period from 2018 to 2026. Europe dominated the wood pellet market in 2017 and is 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 is made from sawdust and industrial wastes involving the manufacturing of wood products such as furniture, construction, and milling lumber. Wood pellets are considered 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 and, 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 it possible to transport them over long distances. Wood pellets also emit lower amounts of carbon dioxide (CO2), thus making them a suitable alternative to fossil fuels.

The rising demand for renewable energy is a key factor driving the growth of the wood pellet market at present. Wood pellets are considered a source of renewable energy and are easily available, making them 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 part of the 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 region's 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 have 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 a significant threat to the environment. In the U.S., more than 5 billion metric tonnes of carbon dioxide (CO2) were generated from energy consumption in 2017. In 2016, more than 35 billion metric tonnes 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

Heat generation, based on end-use, is likely to continue dominating the wood pellet 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 has witnessed 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. Furthermore, using wood pellets for heating has little impact on the environment because wood absorbs the same amount of carbon dioxide that is 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 matter. 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 human health as well, which in turn has urged the commercial industries to shift to cleaner sources of energy, such as wood pellets, which pose minimal threats to the environment.

During the forecast period, Europe is expected to dominate the wood pellets market.

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 a massive consumer of pellets. A major portion of the wood pellets that are produced in the region is used for heat generation. However, the growth of the wood pellet market in the region is slowing on account of mild winters, the 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 overproduced in 2016, resulting in overstock. However, the power generation sector is witnessing robust growth in the United Kingdom and Belgium. The wood pellet industry in Belgium is primarily driven by the presence of large-scale power plants and the EU's 20 percent renewable fuels target for energy use by 2020.

Further, wood pellet production in Germany has witnessed 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 pellet 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 the Asia Pacific is expected to witness significant growth during the forecast period from 2018 to 2026. The region's demand for renewable energy is increasing as governments seek alternatives to fossil fuels to reduce their carbon footprint and ensure long-term energy security. China is expected to be one of the key markets for wood pellets in the coming years. Rapidly growing populations, an insatiable demand for energy, and 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.

Collaborations and joint ventures are some of the key strategies of the companies operating in the wood pellet market.

Key players operating in the global wood pellet 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 tonnes of wood pellets per year to Marubeni Corporation for a period of 15 years starting in 2022. Further, in September 2018, Pinnacle Renewable Holdings Inc. acquired a 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 tonnes 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 enhance the company's position in the Southeast U.S., which is one of the major fiber baskets in North America.

Periods of History and Forecast

2016 : Historic 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. The forecast period between 2018 and 2026 is considered for the CAGR calculation.

The report provides a detailed overview of the global wood pellet market by categorizing it into the following segments:

By Application Segment (2016-2026; Kilo Tons; US Dollar Billions)

  • Pellet stove inserts
  • Pellet Boilers
  • Free-standing pellet stoves

By End-use Segment (Kilo Tons; US$ Billion)

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

By Geography Segment (2016-2026; Kilo Tons; US Dollar Billion)

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 and Africa (MEA)

  • GCC
  • Rest of the Middle East and Africa

This research report describes leading continents and their major countries, along with profiles of key players operating in the 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 the global wood pellet market more explicitly. Our in-depth quantitative and qualitative analysis of each segment up to the country level highlights revenue pockets and investment opportunities in the market.

Key questions are answered in this report.

  • Who are the major manufacturers and distributors operating in the wood pellet 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 pellet market and the most valuable opportunities for the players?
  • How are the regulatory frameworks affecting global as well as regional markets?
  • Which are the key players operating in the global market and the strategies adopted by them?
  • What are the market size and trends in emerging and developed markets?

Frequently Asked Questions:

The market for Wood Pellets Market is expected to reach US$ XX Mn By 2026.

The Wood Pellets Market is expected to see significant CAGR growth over the coming years, at 6.6%.

The report is forecasted from 2018-2026.

The base year of this report is 2017.

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, are some of the major players in the global market.

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Trusted By
Godaddy
Published Date:  Nov 2018
Category:  Energy
Report ID:   58698
Report Format:   PDF
Pages:   120
Rating:    4.8 (80)
Delivery Time: 24 Hours to 48 Hours   
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