Wood Pellets Market size is set to grow by USD 5.28 billion from 2023-2027, AS Graanul Invest, Binderholz GmbH and Bio Eneco, and more to emerge as Some of the Key Vendors, Technavio
NEW YORK, April 18, 2024 /PRNewswire/ -- The global wood pellets market size is estimated to grow by USD 5283.83 mn from 2023 to 2027, according to Technavio. The market is estimated to grow at a CAGR of 7.84% during the forecast period. Europe held the largest share of the global market in 2022, and the market in the region is estimated to witness an incremental growth of 73%.
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Major Players in the Market
Numerous companies are capitalizing on this growing trend by implementing strategic measures such as alliances, partnerships, mergers, and acquisitions. Among the notable players in the cheese based snacks market are:
AS Graanul Invest, Binderholz GmbH, Bio Eneco, BioPower Sustainable Energy Corp., CT Pellet, Drax Group Plc, ECARE, Energy Pellets of America LLC, Enviva Inc., Highland Pellets LLC, JP Green Fuels Pvt. Ltd., Land Energy Girvan Ltd., Laxmi Subhi Sales Corp., Lignetics Inc., Pfeifer Holding GmbH, PREMIUM PELLETS s.r.o, PRODESA, proPellets Austria, SNOW ENTITIES Inc., VIRIDIS ENERGY INC.
Analyst Review
The Wood Pellets Market is experiencing significant growth due to the increasing demand for renewable energy sources and the shift towards carbon-neutral industrial processes. Fossil fuels, such as natural gas, are being replaced by wood biomass, including wood pellets, in power boilers. Co-firing of biomass with fossil fuels in paper and sawmills is also becoming common practice. Private landowners, loggers, and wood dealers are key contributors to the wood pellets market, providing feedstock sources such as lumber production residuals, mill residuals, and sawmill residues. Wood waste and agricultural residue are also valuable feedstock sources. Wood pellets are produced from various types of woody feedstock, including eucalyptus and fire-damaged trees. The renewable energy sector is driving the demand for wood pellets, which can be used to generate electricity and heat. Transportation costs are a significant factor in the wood pellets market, as the pellets need to be transported from the production sites to the end-users. However, the environmental benefits of using wood pellets as a renewable energy source outweigh the transportation costs. Chlorine is used in the production of some wood pellets, which can be a concern for some consumers due to its potential environmental impact. However, advancements in technology are being made to produce chlorine-free wood pellets.
Key Market Drivers
The industrial sector is transitioning towards low-carbon energy sources to reduce greenhouse gas (GHG) emissions. Wood pellets, derived from biomass, have gained popularity as a sustainable alternative to coal in industries. Wood pellet boilers, equipped with self-cleaning systems, are increasingly used in place of traditional coal-fired boilers. Agencies such as the EPA and the Intergovernmental Panel on Climate Change encourage this shift through regulations and grants. In 2021, Enviva Pellets Waycross produced over 1 million metric tons of wood pellets. Cell line development and feedstock sources, including forest residues, mountain pine beetle-infested trees, and fire-damaged trees, contribute to the production. Biomass boilers, including those using Eucalyptus wood pellets, emit less chlorine compared to coal-fired boilers. The implementation of compliances with international agreements like the Kyoto Protocol and the European Union's Emissions Trading System has accelerated the adoption of renewable energy sources, such as solar photovoltaic, wind energy, and biomass power generation. Natural gas and fossil fuels, major contributors to global warming, face increasing competition. Wood biomass, sourced from private landowners, loggers, mill residuals, and paper and sawmills, is transported to pellet production facilities and shipping firms for distribution. Heating and power generation applications in the residential segment are significant markets for wood pellets. The shift towards biomass power generation is expected to continue, reducing carbon emissions from energy production and contributing to the global effort against climate change.
Challenges and Opportunities
The commercial segment of the wood pellets market is growing due to the increasing demand for renewable energy and the adoption of biomass boilers. However, challenges persist, particularly in urban areas where space is limited for fuel storage. CO2 emissions are a concern, with Drax power station's Drax Biomass division leading the way in emission control through co-firing and biomass boiler grants. Renewable energy sector players are focusing on feedstock sources such as agricultural residue, wood waste, and sawmill residues to ensure carbon neutrality. Self-cleaning systems and biomass boiler regulations are key considerations for industrial installations. In 2020, Enviva Pellets Waycross produced over 1 million metric tons of pellets. The renewable energy sector is also exploring solar photovoltaic and wind energy as complementary sources. Law enforcement agencies are implementing compliances to ensure proper feedstock sourcing and carbon emissions reduction. The International Energy Agency emphasizes the importance of natural gas as a transition fuel, but biomass and hydrocarbons face challenges from chlorine emissions and deforestation concerns. Wood pellets derived from mountain pine beetle-infested trees and fire-damaged trees are gaining popularity as sustainable feedstock. Eucalyptus wood pellets are also an emerging option. Biomass boilers must meet stringent design, construction, operation, and maintenance standards to ensure efficiency and minimize greenhouse gas emissions.
The global shift towards renewable energy sources and reducing CO2 emissions is leading to a decline in the use of fossil fuels, particularly coal, for power generation. China's cancellation of 103 coal power plants represents a loss of 120 GW in installed capacity, creating an opportunity for alternative energy sources like wood pellets. Lumber production, wood biomass, and mill residuals are key feedstock sources for wood pellets. Private landowners, loggers, and paper and sawmills contribute to the supply chain. Transportation costs and shipping firms play a crucial role in delivering pellets to heating and power generation applications. Wood pellets are used in residential and commercial heating applications and biomass power generation. Drax Power Station, a significant player in the biomass power sector, uses Drax Biomass for co-firing and has achieved brand recognition. Agricultural residue, wood waste, and sawmill residues are essential woody feedstock. Biomass power generation is carbon neutral and helps reduce greenhouse gas emissions. Industrial sector adoption of wood pellet boilers and self-cleaning systems is increasing. Biomass boiler grants and government initiatives support the implementation of compliances. Metric tons of pellets are produced by companies like Enviva Pellets Waycross, and cell line development continues to improve pellet quality. Renewable energy sector growth includes solar photovoltaic and wind energy. Natural gas prices and the implementation of compliances impact the wood pellet market. Law enforcement agencies monitor illegal logging and ensure sustainable practices.
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Market Overview
The Wood Pellets Market is experiencing significant growth due to increasing demand for renewable energy sources and the shift towards sustainable heating solutions. The global market for wood pellets is projected to expand at a robust pace, driven by factors such as government initiatives to reduce carbon emissions and the availability of abundant raw materials. Major players in the market include Carbon Energy, Bioenergy Europe, and Drax Group. These companies are investing in research and development to improve pellet production efficiency and reduce costs. Additionally, the use of advanced technologies like torrefaction and hydrothermal carbonization is gaining popularity to enhance pellet durability and energy density. The market is segmented by application, end-user, and region. Residential and commercial heating are the major applications, while industrial processes and power generation are other significant end-users. Europe and North America dominate the market, but Asia Pacific is expected to witness the fastest growth due to rising demand from countries like China and India.
About Technavio
Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.
With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.
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SOURCE Technavio
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