Biofuel Wood Pellets Market Size, Share, Growth, and Industry Analysis, By Type (Conventional, Organic), By Application (Residential Heating, Commercial Heating & CHP), and Regional Forecast to 2033

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BIOFUEL WOOD PELLETS MARKET OVERVIEW

The global Biofuel Wood Pellets Market is poised for significant growth, starting at USD 9.481 billion in 2024, rising to USD 10.172 billion in 2025, and projected to reach USD 17.860 billion by 2033, with a CAGR of 7.29% from 2025 to 2033.

More people wanting greener energy around the world has sparked strong growth in the biofuel wood pellets market. Making pellets from organic materials can cut down on the amount of fossil fuels used for heat and power. The main reasons for the rise of the market are rules from governments and our greater knowledge of how we affect nature. Using new technologies to make pellets and an increased use in industry are encouraging more growth in the market. Generally, wood pellets made from biofuel are expected to make a big contribution to using clean energy in countries around the world.

COVID-19 IMPACT

Biofuel Wood Pellets Industry Had a Negative Effect Due to Supply disruptions during COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

Because of the COVID-19 pandemic, the market for biofuel wood pellets saw a big fall in the amount being produced and bought. Over half of respondents claimed wood pellet production was adversely affected, as a lack of sawmills and logistics caused roughly a third to scale down production. Strong action to contain the pandemic led to a worldwide market shrinkage of almost 22% in 2020, mainly because of a drop in industry, little demand for heating, and trouble in shipping. Getting feedstock sources was tricky for many producers, making some shut down or operate at a slower pace. Diminished activity among commercial buyers also stretched the market’s ability to operate.

LATEST TRENDS

Market growth driven by industrial biofuel wood pellet adoption

Because of rising demand for renewable energy and advances in the processes, the global biofuel wood pellets market is seeing substantial growth. An important pattern is that industrial sectors are adopting wood pellets more frequently, mainly for combined heat and power applications. Using wood pellets, these plants provide electricity and heat in an environmentally friendly way instead of regular fossil fuels. Especially in Europe, Finland is an example, switching coal-fired plants to those powered by biomass to reach their target of carbon neutrality. In addition, improvements such as torrefaction, a process that raises the energy density and waterproofing of pellets, help pellets last longer and support their use.

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BIOFUEL WOOD PELLETS MARKET SEGMENTATION

BY TYPE

Based on Type, the global market can be categorized into 0.5% of Biofuel Wood Pellets

0.5% of Biofuel Wood Pellets: Biofuel wood pellets with little moisture are very prized for their great energy efficiency and ability to burn well. Less moisture in these pellets lets them burn cleanly and provide increased heat used in homes and at high levels in industries. Because they have less moisture, these foods can be kept longer without serious mold issues. As a consequence, more markets choosing fuel efficiency and environmentally friendly practices are selecting 0.5% moisture wood pellets.

BY APPLICATION

Based on Application, the global market can be categorized into Residential Heating, Commercial Heating & CHP

• Residential Heating: Biofuel wood pellets are popular at home because they burn cleanly and supply a lot of heat. They offer a better way of heating buildings with an endless supply. Many people are now choosing fireplace inserts and boilers because they aim for sustainable heating. Being able to easily deliver and store pellets is helping more people use them at home.

• Commercial Heating: Office buildings, schools and hospitals often use biofuel wood pellets to drive boilers and heat their spaces. With options supplied by renewable energy, companies can save money and lessen their negative effect on the environment compared to fossil fuels. The good quality and high density of pellets enable commercial buildings to heat up reliably. Greater pressure from rules on emissions is causing companies to increase their use of pellets.

• CHP: Using biofuel wood pellets in CHP plants, it is now possible to create both electric power and heat in a single system, making the whole process more energy efficient. Maximizing how we use fuel and reducing wastey helps us support smart energy policies. Places interested in using less fossil fuel often install CHP systems that use wood pellets.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.                          

DRIVING FACTOR

Environmental goals and carbon neutrality drive market growth

The aim of countries worldwide to cut carbon emissions and stop climate change is an important driver for the growth of the biofuel wood pellets market. Governments and businesses around the world are focusing on renewables to aid their environmental work. Wood pellets being carbon neutral means that using them to heat and power electrical systems is much better than using fossil fuels. Because people are being more environmentally conscious, biofuel wood pellets have become more popular and are being used in homes, offices, and companies.

Advanced technologies enhance pellet quality, boosting global market growth

New manufacturing tools and techniques have raised the standard and efficiency of biofuel wood pellets. Improvements in both torrefaction and pelletizing methods make wood biomass more energy-rich, stronger, and easier to burn. New technologies in wood pellets help cut costs and make them an attractive alternative to other energy types. For this reason, market growth is being supported by better quality pellets that can be stored and used easily in many countries and resulting biofuel wood pellets market growth.

RESTRAINING FACTOR

Raw material issues and costs negatively impact market growth

A significant challenge for this market is that wood biomass, which is needed, is often unreliable and costly. Sometimes, when there are problems with getting raw materials or other industries also using them for their own needs, the volatility in pricing makes it hard for the pellet industry to be profitable. Also, places with fewer forest resources have difficulties in increasing how they produce pellets sustainably. When alternative energy is simpler to get or less expensive than petroleum, these factors can hold down market growth.

Carbon policies and global demand drive market growth

Opportunity

The biofuel wood pellet market is benefiting from the increasing number of carbon-neutral policies and new emission rules internationally. More funding for biomass plants and helpful incentives offered by the government make it easier for the market to grow. Moreover, greater demand in developing parts of the world for clean ways to heat their homes makes clean investment a promising area for expansion. Because of both government policies and more customers, biofuel wood pellets have strong development potential.

Competing renewables and sustainability concerns limit market growth

Challenge

Biofuel wood pellets face a major problem from competing with forms of energy like solar and wind power. Because renewable energies receive more money and applause from lawmakers and society, wood pellets have a tougher time standing out in the market. Besides, worries about cutting down forests and getting sustainable materials lead to both environmental and regulatory problems. With more responsible harvesting and better cost efficiency for wood pellets, these challenges can be overcome.

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BIOFUEL WOOD PELLETS MARKET REGIONAL INSIGHTS

• NORTH AMERICA

U.S. exports and policies support North America's market growth

North America is significant in the biofuel wood pellets market, mainly because of the United States’ high supply of wood and its strong infrastructure. More than half of what the region produces is designed for export, and the U.S. is a prominent exporter to Europe and Asia. The United States shipped out over 9.54 million metric tons of wood pellets in 2021, with sales worth USD 1.75 billion. Such export growth is made possible by building new factories and introducing positive policies for renewable energy. The United States biofuel wood pellets market is growing due to these benefits and rising interest around the world in using renewable energy.

• EUROPE

EU demand and policies strongly drive market growth

Biofuel wood pellet producers and consumers worldwide view Europe as especially important due to its leading role in this industry. Last year, the EU made and used 24.8 million metric tons (MMT) of wood pellets, a record figure, and is expected to use 25.6 MMT in 2023. Pellets are mostly bought by Germany, France, and Italy, mainly for home heating and use in combined heat and power systems. Thanks to the EU's focus on renewable energy, shown in REDIII, wood pellets are now more in demand in Europe.

• ASIA

Asia's clean energy demand boosts market growth

Asia holds remarkable  biofuel wood pellets market share due to rising needs for clean energy and the help of government officials. Last year, Japanese and South Korean companies imported the bulk of the wood pellets used in Asia, where consumption totaled 13 million tons, growing by 7.1%. Vietnam, China, and Malaysia supply much of the region’s demand for these products by providing large shipments to it. But such a rise in demand worries environmentalists, especially because some parts of the biomass industry lead to deforestation in countries like Indonesia.

KEY INDUSTRY PLAYERS

Key players' innovation and expansion strategies fuel market growth

Main players in the biofuel wood pellets market are driving its growth by making strategic investments, inventing new technologies, and broadening their production capacity. Many companies are now spending on new pelletizing technologies to enhance product quality, use less energy, and decrease their costs. A lot of them are linking up and expanding their reach into new regions, mainly in Europe and Asia, where demand is increasing. Moreover, these players make sure they follow sustainable procedures to focus on the environment and fulfill regulations. The heavy emphasis on research and powerful marketing plans is helping the industry to develop and spread more widely across the globe.

LIST OF TOP BIOFUEL WOOD PELLETS COMPANIES

• Vyborgskaya Cellulose (Russia)
• Energex (U.S)
• Enviva (U.S)
• Graanul Invest (Estonia)
• Highland Pellets (U.S)

KEY INDUSTRY DEVELOPMENT

June 2023: A major recent change in the biofuel wood pellets market is that Enviva Inc. is currently building its new Epes plant in Sumter County, Alabama. The facility is built with a target of producing 1.1 million metric tons annually, and it should be operational in mid-2024, with a complete build-up planned for 2025. Long-term arrangements with European and Asian clients allow the plant to assist in meeting demand for more renewable energy. Expanding its production capacity and helping drive global sustainability is clear from Enviva’s recent investment.

REPORT COVERAGE       

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential Applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

This research report examines the segmentation of the market by using both quantitative and qualitative methods to provide a thorough analysis that also evaluates the influence of strategic and financial perspectives on the market. Additionally, the report's regional assessments consider the dominant supply and demand forces that impact market growth. The competitive landscape is detailed meticulously, including shares of significant market competitors. The report incorporates unconventional research techniques, methodologies and key strategies tailored for the anticipated frame of time. Overall, it offers valuable and comprehensive insights into the market dynamics professionally and understandably.