The global wood pellets market size was estimated at USD 8.88 billion in 2019 and is expected to reach USD 18.22 billion by 2027, exhibiting a revenue-based CAGR of 9.4% during the forecast period.
Growing consciousness regarding the use of renewable energy sources for space heating in residential and commercial heating is likely to propel the demand. Wood pellets undergo complete combustion while burning, thereby providing more heat as compared to the other biomass fuels. In addition, clean combustion of wood pellets contributes to its application in pellet stoves and pellet fireplaces along with the tax benefits and incentives associated with renewable energy and energy efficiency.
Gather more insights about the market drivers, restrains and growth of the Global Wood Pellets Market
The demand for wood pellets in fueling the power plants for electricity generation is projected to witness significant growth owing to the rising number of power plants in the country. China has banned the use of coal-fired boilers in the East and Guangdong province. The low cost of the product in the aforementioned regions is also anticipated to drive the market growth in the forthcoming years.
The rising demand for wood pellets from power generation industry is likely to drive the market growth over the forecast period. In addition, increasing awareness regarding the use of renewable energy sources for power generation coupled with the high combustion of wood pellets is likely to augment the product demand.
Favorable government initiatives and global agreements in support of renewable sources of energy are anticipated to drive the market expansion in the forthcoming years. Governments of various countries provide incentives and subsidies to consumers using wood pellets for heating applications. The UK government launched the Domestic Renewable Heat Incentive (Domestic RHI) scheme for promoting the use of renewable heat.
The market players engage in R&D activities to increase the efficiency of the wood pellet manufacturing process. New and advanced designs for pellet mills are being developed to obtain high yield with optimum fuel input. Extensive research is being carried out to achieve high calorific value wood pellets from the available feedstock. All these factors are anticipated to positively influence the growth of the market in near future.
Wood Pellets Market Segmentation
Based on the Application Insight the market is segmented into Power Plants, Residential Heating,Commercial Heating, and Combined Heat and Power (CHP)
Based on application, the wood pellet market is segmented into residential heating, commercial heating, power plants, and Combined Heat and Power (CHP). Clean combustion of wood pellets contributes to its application in pellet stoves and pellet fireplaces, thereby driving its demand in the power generation and heating applications.
The commercial application segment is anticipated to show significant growth over the forecast period owing to increasing adoption of wool pellets for space heating in federal or municipal buildings, office buildings, educational facilities, and other commercial buildings.
Based on the Regional Insights the market is segmented into North America, Europe, and Asia Pacific, Middle East & Africa, Central & South America
Europe accounts for a significant market share of 77.8% in terms of volume in 2019. The demand for wood pellets is expected to witness significant growth on account of a wide range of market factors including increasing consumption of the product in power generation.
Asia Pacific is expected to register the fastest CAGR of 14.4% from 2020 to 2027 owing to the favorable government policies in Japan, China, and South Korea regarding power generation and CHP.
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Market Share Insights
Jan 2021: Pinnacle Renewable Energy (“Pinnacle” or the “Company”) (TSX: PL) announced that it has entered into an extension of a long-term, take-or-pay off-take contract with Mitsubishi Corporation Ltd. (“Mitsubishi”), a large, diversified trading company in Japan.
Key Companies Profile:
Small-scale players cater to a particular country or region where they are located and compete on the basis of raw material availability and transportation facilities and also compete on the basis of regional demand and their penetration in the regional markets.
Some prominent players in the global wood pellets market include:
Drax Group Plc.
Pinnacle Renewable Energy Group
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