Wood Pellets Market Size, Share & Trends Analysis Report By Application (Heating, Power Generation), By End-use (Residential, Industrial, Commercial), By Region, And Segment Forecasts, 2024 - 2030

Wood Pellets Market Size, Share & Trends Analysis Report By Application (Heating, Power Generation), By End-use (Residential, Industrial, Commercial), By Region, And Segment Forecasts, 2024 - 2030

Wood Pellets Market Growth & Trends

The global wood pellets market size is anticipated to reach USD 13.38 billion by 2030, growing at a CAGR of 6.2% from 2024 to 2030, according to a new report by Grand View Research, Inc. Since wood pellets form a clean, environmentally beneficial, sustainable, and renewable biomass, the rising global demand for renewable energy is driving the demand for product to reduce the usage of fossil fuels that contributes to global warming.

The applications of wood pellets in co-firing, cogeneration, and direct firing in coal-based power generation aid in reducing greenhouse gas emissions. Furthermore, the growing price of heating oil used in residential and commercial heating is projected to drive the market demand over the forecast period.

Raw materials used for manufacturing wood pellets include sawdust from sawmills and wood residues from timber processing companies. These materials are obtained at a low cost by the wood pellet manufacturers. In addition, urban wood waste, such as wood chips obtained by recycling residues and disposed of wooden pallets, is considered feedstock for manufacturing products. These raw materials are procured by manufacturers and transported to the production facilities using trucks.

Companies involved in manufacturing these pellets include Drax Biomass, Georgia Biomass, LLC, Energex, Vermont Wood Pellet Co., Singpellet Pte. Ltd., and Pinnacle Renewable Energy, Inc. Majority of the aforementioned companies have vertically integrated supply chains, wherein they are involved in harvesting raw materials, manufacturing product, and supplying them to power plants or residential applications.

Market entry is expected to be feasible through vertical integration, which includes wood products manufacturing companies investing in pelletization. The entry cost for new players is low; however, other factors, such as construction & start-up costs and exit costs, are high. Furthermore, high sunk costs and the need for expertise in the wood pellets market are expected to lower the threat of new entrants in the market.

The mode of transportation of products from manufacturers to traders is dependent on the distance. For instance, trucks and trains are used for transporting wood pellets over short and medium distances, respectively. Riverboats and barges are used to transport pellets through waterways for short distances, while ships are used to transport them over long distances. Wood pellets are distributed in small bags, big bags, and bulk materials through tankers and pneumatic filling of silos or storage bunkers. The problems that can arise due to moisture are also to be taken into consideration while planning the transportation of products.

Wood Pellets Market Report Highlights

• Based on application, the heating industry, a huge potential market for pellets, is already showing some exciting advances in Eastern Europe and is expected to continually grow the demand for wood pellets in the commercial sector from 2024 to 2030. They can generate enormous amounts of potable or non-potable hot water for use in big central heating systems for providing process heat during a specific phase of a manufacturing procedure.
• Based on end-use, the residential segment is anticipated to grow at a CAGR of 6.2% from 2024 to 2030, owing to the increasing usage of wood pellets in residential homes for efficient combustion in smaller stoves for heating and cooking as a result of the subsidies provided by the government.
• In the North America, the wood pellets industry has witnessed remarkable growth in recent years, driven by increasing application majorly in the residential heating and power plants segments. The major markets for wood pellets manufactured in Canada include countries in Europe and Asia. In addition, these pellets have applications in residential heating in the U.S.
• Key industry players are undertaking mergers and collaborations to expand their reach and increase production capacity, thereby advancing their market share. Additionally, prominent suppliers are focusing on research & development activities to reduce operational costs; maximize the efficiency of production and storage, and enhance the quality of products to maintain their position in the market.

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