Wood Pellet Market Size By Grade (Premium, Standard, Utility), By Application (Residential, Commercial, Industrial, Animal Bedding), Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast, 2019 – 2025

Published Date: Oct 2019  |  Report ID: GMI4387  |  Authors: Kiran Pulidindi, Soumalya Chakraborty

Report Format: PDF   |   Pages: 200   |   Base Year: 2018

Summary Table of Contents Industry Coverage Methodology

Industry Trends

Wood Pellet Market size was valued at over USD 8.5 billion in 2018 and is estimated to exhibit over 10% CAGR from 2019 to 2025.

Wood Pellet Market

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Wood pellets are renewable energy sources, derived from sawdust, wood shaving, dry chips, etc. Growing economic awareness, changing lifestyle, and global warming is likely to positively affect the demand for these renewable materials in the future. These products have a bulk density of around 650 kg/m3, ash content below 10%, dry content of more than 90% and diameter in the range of 6 to 8 mm. These provide key advantages such as cost effectiveness along with low impact on the environment compared to the traditional fuel sources. Wood pellets will be a great alternative to fossil fuels including coal, liquid petroleum gas, natural gas, etc. in the upcoming years as it improves the system efficiency significantly.

Wood Pellet Market Report Coverage
Report Coverage Details
Base Year: 2018 Market Size in 2018: 8.8 Billion (USD)
Historical Data for: 2014 to 2018 Forecast Period: 2019 to 2025
Pages: 200 Tables, Charts & Figures: 320
Geographies covered (22): U.S., Canada, Germany, UK, France, Italy, Denmark, Sweden, Belgium, Austria, Russia, Poland, China, Japan, South Korea, Australia, New Zealand, Brazil, Mexico, South Africa, Saudi Arabia, UAE
Segments covered: Grade, Application and Region
Companies covered (15): Stora Enso, Enviva Partners, Pacific BioEnergy, Drax Group, AS Graanul Invest, Lignetics, Ecochipp, Svenska Cellulosa Aktiebolaget, InstantHeat Wood Pellets, Pinnacle Renewable Energy, AMP Clean Energy, Mallard Creek, Ecowood pellets, German Pellets GmbH, The Westervelt Company
Growth Drivers:
  • Rising demand for renewable energy in major European countries
  • Policy changes in Canada related to coal-fired plants
  • Superior product characteristics compared to fossil fuels
  • Increasing energy demand in South Korea
  • Ongoing trends related to outdoor kitchens in developed nations
Pitfalls & Challenges:
  • Implementing sustainable standards
  • Trade challenges in emerging economies
  • Lack of awareness related to product in developing nations

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Focus on renewable energy sources will have significant influence

Favorable government policies in the European Union towards renewable energy sources (RES) is likely to be a driving factor for the wood pellet market in the next few years. Various government schemes including, tax credits, quotas, auction schemes, etc. and declining manufacturing & capital cost owing to expansion of production capacities have been key factors for the RES deployment in the region. Major countries including Germany, UK, and France among others have taken initiatives to promote RES development recently. For instance, France has planned to convert its Cordemais plant (1,200 MW capacity) from coal-based to wood pellet fuel based by 2022. Similarly, SIMEC Atlantis Energy announced the conversion of Uskamouth plant from coal-fired to biomass fuel based in 2019. Such initiatives are likely to boost the product demand in the upcoming years.

Another key growth driving factor for the industry is ongoing trends related to outdoor kitchens in the developed economies. This trend has created emergence of wood pellet grills in developed countries. For instance, Traeger’s wood pellet grill is the best example of this, which replaces fuel sources like natural gas or charcoal with pellets, to enhance cooking experience. Increasing requirement for outdoor kitchen concepts is likely to drive the demand for pellet grills, which will further enhance the consumption of wood pellets over the study period.

Although wood pellets are gaining considerable attention in the developed economies, the lack of awareness in the emerging countries are likely to affect the industry growth in the coming years. The key reason behind this is limited availability of production facilities in Latin America and Middle East & Africa. These regions are still at the nascent stage and are likely grow at considerable rate throughout the study period. However, increasing government efforts to promote use of these products will create potential growth opportunities for the region’s growth over the study period.

Premium grade will gain significant importance in residential heating sector

Wood Pellets Market, By Grade, 2014, 2018, and 2025, (USD Billion)
  Wood Pellets Market, By Grade, 2014, 2018, and 2025, (USD Billion)

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Premium grade is likely to account for a significant share in the overall industry due to growing product demand in the residential heating sector. The product possesses key advantages such as low ash content (around 1%), low moisture content (around 8%) and generates very little fines compared to the other grades. Premium grades are extensively utilized by the residential pellet boiler and pellet stoves as fuel source. Countries such as Germany, Sweden, Denmark, Austria, etc. consume this type of grade for residential heating purpose owing to cold climates.

Utility grade is expected to grow at a significant rate in the upcoming years due to its growing usage for the industrial heating applications. These products have low bulk density compared to premium grade products, which provides benefit for space utilization to the industrial sector. Electric utility sector is also likely to be a key consumer of these products in the upcoming years.

Residential heating sector will be a key application area in the wood pellet market in the U,S,

Residential heating sector will account for the largest wood pellet market share throughout the study period. Growing product consumption in North America and major European countries will drive the segment’s growth. Major countries in these regions have taken initiatives to increase dependency on renewable energy sources for reducing carbon emission. For instance, Canada’s five major clean fuel associations have set an objective to reduce 30 metric tons of GHG emission by 2030. These will include incorporating renewable energy sources in industrial, residential and transportation sector.

European industrial sector to boost regional consumption

U.S. & UK Wood Pellet Market Share, By Application, 2018
U.S. & UK Wood Pellet Market Share, By Application, 2018

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Europe is likely to have a major chunk of overall industry throughout the forecast time period. Growing demand for the product from both residential and industrial sector is likely to drive the region’s growth in upcoming years. Replacing coal fired power plant into pellet-based plant will stipulate product demand in the industrial sector. Further, growing focus on renewable energy sources in the region will have a positive impact on the industry growth in the forecast time period.

Middle East & Africa is likely to have the least share of the overall industry, but it will grow at considerable rate in the forecast time period. South Africa is a key consumer of wood pellets due to growing product demand for residential cooking purpose. Further, government initiative to reduce dependency on coal-fired plants will further drive the market share. For instance, South African government announced to build a 25 MW biomass plant in order to support its Renewable Energy Independent Power Producer Program.

Key industry participants in the wood pellet market share includes Stora Enso, Enviva, Lignetics, Pacific BioEnergy and Svenska Cellulosa Aktiebolaget. These players have entered into variety of strategic agreements with electric power producing companies to ensure long term supply of their products. For instance, Enviva Partners have established take or pay contract with major power producing companies in Europe including Drax Power, Engie Energy Management, and MGT Teesside.

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 2014 to 2025, for the following segments:

Wood Pellets Market, Grade by Application

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

Wood Pellets Market, by Application

  • Residential
  • Commercial
  • Industrial
  • Animal bedding

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

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • U.K.
    • 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

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