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Wood Pellets Market Size By Grade (Premium, Standard, Utility), By Application (Residential, Commercial, Industrial, Animal Bedding), Industry Analysis Report, Regional Outlook, Growth Potential, Price Trend, Covid-19 Impact Analysis, Competitive Market Share & Forecast, 2021 – 2027

  • Report ID: GMI4387
  • Published Date: Nov 2021
  • Report Format: PDF

Industry Overview

Wood Pellets Market size exceeded USD 8.92 million in 2020 and is estimated to grow at a CAGR of over 15% from 2021 to 2027. The increasing deployment of renewable energy facilities around the world is estimated to enhance the product penetration.

In Europe, the Renewable Energy Sources (RES) demand is rapidly growing and accounted for around 17% of the total energy consumption in the region from 2017 to 2020. The steps taken to curb carbon emission from the energy sector, market liberalization, policy changes, climate changes, etc., have led to product acceptance in the European countries rapidly.

Wood Pellet Market

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Superior product characteristics of wood pellets is another key growth enabling factor that will further nourish industry development by 2027. The product features lower moisture and ash content as compared to conventional fossil fuels such as commercial butane, propane, LPG, coal, etc. Although there are major trade challenges present in the wood pellets market, including lower heating value, shipping over long distance, etc., the product is still getting substantial attention from renewable producers in the U.S. and European countries.

Ongoing coronavirus pandemic has marginally affected the global wood pellets market growth in 2020 due to disruption in production and distribution activities of biomass pellets. The shortage of materials and labor considerably declined the production over a very short period of time in many countries. However, the strategic offtake agreements for wood pellets established by many companies are estimated to counterbalance the negative impact of the pandemic between 2021 and 2027.

Rising need for high-quality heat source in the residential segment to propel premium wood pellet sales

Wood Pellets Market Size By Grade

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Wood pellets market from premium wood pellets segment is projected to exceed USD 10 billion by 2027 due to rising product demand in residential heating & cooling applications in the European countries. The product is sold under baggage packaging usually, which is costlier as compared to other products owing to premium charged by the manufacturers. However, the fines produced by this grade is typically lower as compared to standard pellets, which is projected to be a key reason behind the segment’s expansion.

Trending conversion of traditional power plants into biomass-based facilities to drive product demand

Wood Pellets Market Size, By Application

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The industrial sector is expected to account for over 35% share in the global wood pellets market by 2027. The rising product usage in combined heat & power plants is projected to propel the industry development. The growing trends of converting coal-based facilities into biomass plants will further advance the consumption of pellets in the industrial segment. In 2019, Drax, a coal-fired plant based in the UK, announced to become one of the world’s first carbon-free businesses by 2030. Similarly, Koehler Group planned to start the conversion of its pulverized lignite-based facility in Germany into fine wood-derived fuel by June 2025. Such initiatives are expected to propel the product penetration across European region.

Certified pellets to fuel biomass-derived energy demand across Europe

Wood Pellets Market Size By Region

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Europe wood pellets market will generate a demand of over 70 million tons by 2027 due to the growing product demand in utility and energy sectors over the past few years. The increasing focus on renewable energy sources deployment will further pave the way for regional market demand for wood pellets in the next few years. Governments have been encouraging power producers to utilize biomass pellets for energy generation application. Furthermore, the increasing demand for certified grade of pellets, including ENplus, Din, Din Plus, etc., is estimated to enhance product penetration at a substantial rate in the region.

Off-take agreement to build competitiveness of top pellet suppliers

Global wood pellets industry is moderately fragmented with the presence of small to medium-scale manufacturers in Asia Pacific. The key manufacturers in the wood pellets market include Enviva Partners, Pinnacle Renewable Energy, Drax Group, Svenska Cellulosa Aktiebolaget, and Stora Enso. These companies utilize various strategic initiatives, such as strategic acquisitions, capacity expansion, take-or-pay agreements, and new product launches, to remain competitive in the industry.

The take-or-pay agreement is forming basis for the growing usage of pellets in many parts of the world. Since the partnership agreement enables supply of pellets over a specified period of time at the agreed price, it further creates a win-win situation for both suppliers & buyers and saves them from large losses during the contract period. The top players are driving their competitiveness using this strategy.

Pacific BioEnergy entered into a strategic off take agreement with Skeena Sawmill in 2019, under which the company agreed to purchase of all the pellets manufactured in Skeena Sawmill. Similarly, Pinnacle Renewable Energy has announced to extend its existing long-term off take agreement with Mitsubishi to supply over 80 kilo tons of industrial pellets starting from the first quarter of 2023. Such trends are projected to enhance the share of top players in the global wood pellets industry from 2021 to 2027.

The Wood Pellets Market research report includes in-depth coverage of the industry with estimates & forecast in terms of volume in Kilo Tons and revenue in USD Million from 2017 to 2027 for the following segments:

By Resin

  • Premium
    • Residential
    • Commercial
    • Industrial
    • Animal bedding
  • Standard
    • Residential
    • Commercial
    • Industrial
    • Animal bedding
  • Utility
    • Residential
    • Commercial
    • Industrial
    • Animal bedding

By Application

  • Residential
  • Commercial
  • Industrial
  • Animal bedding

The above information has been provided on a regional and country basis for the following:

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • UK
    • France
    • Italy
    • Denmark
    • Sweden
    • Belgium
    • Austria
    • Russia
    • Poland
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • Australia
    • New Zealand
  • Latin America
    • Brazil
    • Mexico
  • Middle East & Africa
    • South Africa
    • Saudi Arabia
    • UAE


Authors: Kiran Pulidindi, Akshay Prakash

Frequently Asked Questions (FAQ) :

The wood pellets industry size was over USD 8.92 million in 2020 and will register a CAGR of more than 15% up to 2027 due to the rising deployment of renewable energy facilities worldwide.

Demand for premium wood pellets is likely to reach USD 10 billion by 2027, as it is widely utilized in residential heating & cooling applications, mainly in European countries.

The industrial application segment held around 35% of the wood pellets industry revenue share up to 2027 owing to the increasing penetration in heat & power plants.

Wood pellets market size in Europe is expected to cross 70 million tons in terms of volume through 2027 driven by the surging need in utility and energy sectors in the region.

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Premium Report Details

  • Base Year: 2020
  • Companies covered: 15
  • Tables & Figures: 317
  • Countries covered: 23
  • Pages: 200

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