Wood Pellet Market Size, Share & Growth Trends 2025-2033

The global wood pellet market is witnessing significant growth, driven by the increasing demand for renewable energy sources and the need to reduce carbon emissions. In 2024, the market was valued at USD 14.0 billion and is projected to reach USD 22.6 billion by 2033, exhibiting a CAGR of 5.5% during 2025-2033. Factors such as government initiatives promoting sustainable energy, advancements in pellet production technology, and the cost-effectiveness of wood pellets compared to fossil fuels are propelling market expansion. 

Study Assumption Years

• Base Year: 2024

• Historical Years: 2019-2024

• Forecast Years: 2025-2033

Wood Pellet Market Key Takeaways

• The global wood pellet market reached USD 14.0 billion in 2024 and is expected to grow to USD 22.6 billion by 2033, with a CAGR of 5.5% from 2025 to 2033.

• Europe dominated the market in 2024, accounting for over 47.9% of the global share, driven by strong renewable energy policies and infrastructure.

• Forest wood and waste emerged as the leading feedstock type, holding approximately 33.6% market share in 2024, due to their availability and cost-effectiveness.

• Residential heating was the largest application segment in 2024, comprising around 58.4% of the market, fueled by the demand for sustainable and efficient heating solutions.

• Technological advancements in pellet production and combustion technologies are enhancing efficiency and reducing emissions, supporting market growth.

• Government incentives, including subsidies and tax benefits for adopting bioenergy solutions, are further boosting market adoption across various regions.

• The Asia-Pacific region is experiencing robust growth, primarily driven by increasing demand for renewable energy in countries like Japan, South Korea, and China. 

 Market Growth Factors

1. Growing Residential Heating Applications

Wood pellets are quickly becoming a favorite choice for home heating, largely because they’re cost-effective and good for the environment. In both Europe and North America, many are turning to pellet stoves and boilers as a viable alternative to oil and gas heating. Consumers love pellets for their ease of storage, clean burning, and consistent heat output. Plus, with more compact heating systems available and a growing focus on eco-friendly lifestyles, it’s no wonder that demand for wood pellets is on the rise worldwide.

2. Expansion of Biomass Power Plants

Across major economies, biomass power plants are on the rise. These facilities utilize wood pellets as a crucial fuel source to create clean energy. With the global push to lower greenhouse gas emissions, biomass plants are emerging as a trustworthy renewable option. Energy producers are transitioning from coal to pellets, which produce much lower CO₂ emissions. Continuous investment in renewable infrastructure is fostering long-term growth for the wood pellet market, especially in regions like Europe, Japan, and South Korea.

3. Technological Advancements in Pellet Production

The latest advancements in wood pellets are really transforming their uses and boosting market growth. Notable developments include higher-density torrefied pellets that improve energy efficiency during transport, as well as AI-driven supply chain optimizations that aim to lower costs and emissions. Innovations in manufacturing and combustion technologies are leading to more efficient, clean-burning heating systems. Additionally, wood pellets are being incorporated into hybrid biomass systems and are even being used to produce sustainable aviation fuel (SAF), indicating a shift towards renewable energy sources. Moreover, pellets contribute to circular economy efforts by generating biochar from waste. The market is driven by strict renewable energy mandates, increasing environmental awareness, and growing opportunities in emerging markets like Southeast Asia and China, further supported by investments in sustainable forestry practices and biomass infrastructure.

Request for a sample copy of this report: 

https://www.imarcgroup.com/wood-pellet-market/requestsample

Market Segmentation

By Feedstock Type

• Forest Wood and Waste: Comprising residues like sawdust and wood chips, this segment leads the market due to its abundance and cost-effectiveness in pellet production.

• Agriculture Residue: Includes crop residues such as straw and husks, offering an alternative to traditional agricultural waste disposal while contributing to renewable energy goals.

• Others: Encompasses various other biomass materials utilized in pellet production, supporting diversification in feedstock sources.

By Application

• Power Plants: Utilization of wood pellets for electricity generation, aiding in the transition from coal to renewable energy sources.

• Residential Heating: Dominant application segment, driven by the demand for sustainable and efficient heating solutions in households.

• Commercial Heating: Adoption of wood pellets in commercial settings for space and water heating, contributing to energy efficiency.

• Combined Heat and Power (CHP): Integration of wood pellets in systems that simultaneously generate electricity and useful heat, enhancing energy utilization.

• Others: Includes various other applications of wood pellets across different industries and sectors.

Breakup by Region

• North America (United States, Canada)

• Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)

• Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)

• Latin America (Brazil, Mexico, Others)

• Middle East and Africa

Regional Insights

Europe holds the largest share in the global wood pellet market, accounting for over 47.9% in 2024. The region's strong commitment to renewable energy and carbon neutrality, coupled with supportive government policies and advanced infrastructure, drives the demand for wood pellets in power generation and heating applications. Additionally, Europe's focus on reducing greenhouse gas emissions and transitioning away from fossil fuels further bolsters market growth.

Recent Developments & News

In October 2024, PT Bukit Asam Tbk launched a Wood Pellet Pilot Plant in Tanjung Enim, South Sumatra, producing 200 kg of biomass from Red Kaliandra per hour. This initiative aims to support coal co-firing in power plants and contribute to emission reduction efforts, aligning with government sustainability goals. Such developments highlight the increasing investments in wood pellet production to meet renewable energy targets and reduce carbon emissions. 

Key Players

Andritz AG, Asia Biomass Public Company Limited, Drax Group PLC, Energex, Enviva LP, Fram Renewable Fuels LLC, Land Energy Limited, Lignetics Inc., Mallard Creek Inc., Pacific BioEnergy Corporation, Stora Enso Oyj, Svenska Cellulosa Aktiebolaget, Tanac S.A., etc.

Ask Analyst for Customization: 

https://www.imarcgroup.com/request?type=report&id=5088&flag=C

If you require any specific information that is not covered currently within the scope of the report, we will provide the same as a part of the customization.

About Us:

IMARC Group is a global management consulting firm that helps the world’s most ambitious changemakers to create a lasting impact. The company provides a comprehensive suite of market entry and expansion services. IMARC offerings include a thorough market assessment, feasibility studies, company incorporation assistance, factory setup support, regulatory approvals and licensing navigation, branding, marketing and sales strategies, competitive landscape, and benchmarking analyses, pricing and cost research, and procurement research.

Contact Us:
IMARC Group
134 N 4th St. Brooklyn, NY 11249, USA
Email: sales@imarcgroup.com
Tel No:(D) +91 120 433 0800
United States: (+1-201971-6302)