Global Wood Pellet Market Expected to Reach USD 22.6 Billion by 2033 - IMARC Group

Global Wood Pellet Market Statistics, Outlook and Regional Analysis 2025-2033

The global wood pellet market size was valued at USD 14.0 Billion in 2024, and it is expected to reach USD 22.6 Billion by 2033, exhibiting a growth rate (CAGR) of 5.5% from 2025 to 2033.

The rising global economy has increased the demand for energy generation from renewable sources, further expanding the global wood pellet market. Climate change is creating havoc, thus cutting greenhouse gas emissions is critical. The government's efforts to phase out fossil fuels are gaining traction in the market. Wood pellets can be an appealing alternative because they are renewable. The product is often created from compressed biomass, such as sawdust and wood shavings. Since the renewable energy industry, including bioenergy produced from wood, is spreading rapidly as countries scramble to diversify their energy sources and become carbon neutral, the wood pellet market opportunities may be promising. For instance, according to research published by the World Bioenergy Association in 2021, the world produced 1.9 billion m3 of wood fuel, and wood pellets are one of the fastest-expanding bioenergy sectors in the world.

Moreover, government incentives and sustainable policies have a significant effect on the wood pellet market pricing, promoting its growth and accessibility globally. For example, the Home Efficiency Rebate program, also known as the Clean Air program, in the United States supports the construction of biomass-fed heating systems, including those powered by wood pellets. By rewarding homes to replace their old heating systems with biomass-fed systems, the program hopes to expand the market for wood pellets and enhance the domestic wood pellet sector. Besides this, technological advancements are increasing the efficiency and viability of the wood pellet market. Innovations in pellet manufacturing processes, such as improved pelletizing machinery and automation, have led to increased production capacity, lower energy consumption and cost-effectiveness. For instance, in April 2022, CPM, a pellet mill and equipment manufacturer, introduced a breakthrough new technique to increase the efficiency of wood pellet mills. CPM's unique Twin Track technology was created after a decade of research, with the purpose of lowering energy consumption, assuring consistent pellet quality, and increasing mill capacity. Twin Track uses two rollers inside the pellet mill, each with its own track. The system is intended to move pellets with a single long, energy-efficient push per die revolution.

Global Wood Pellet Market Statistics, By Region

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Europe accounted for the largest wood pellet market share, owing to the growing awareness of climate change. 

North America Wood Pellet Market Trends:

Supportive government policies and incentives are promoting the adoption of renewable energy. For instance, various U.S. states offer subsidies and tax benefits for using biomass energy, encouraging the transition to wood pellets.

Europe Wood Pellet Market Trends:

Europe's commitment to renewable energy and carbon neutrality has boosted the continent's wood pellet business, making it the largest region in the market. Consideration of strict environmental regulations in numerous states, government incentives, and integrated policies aimed at meeting renewable targets have guided the use of wood pellets for heating and electricity generation, resulting in a market increase. Furthermore, the continent's commitment to alleviating greenhouse gas emissions and shifting away from fossil fuels has increased market demand for wood pellets, making Europe a key influencer of the global wood pellet market. For instance, according to the USDA Foreign Agricultural Service's Global Agricultural Information Network, the European Union (EU) used 24.8 million metric tons of wood pellets in 2022.

Asia Pacific Wood Pellet Market Trends:

Governments across the Asia-Pacific region are implementing policies to promote renewable energy. For instance, South Korea and Japan have provided financial support to develop biomass production in Indonesia, leading to increased wood pellet production to meet their energy needs.

Latin America Wood Pellet Market Trends:

Countries like Brazil and Argentina have extensive forested areas and significant agricultural residues, providing ample raw materials for wood pellet production. This availability supports local manufacturing and reduces reliance on imports.

Middle East and Africa Wood Pellet Market Trends:

In the Middle East and Africa, wood pellets are being increasingly utilized for heating purposes in both residential and commercial settings. Their efficiency and cost-effectiveness make them a preferred choice for heating applications, further driving the market’s growth.

Top Companies Leading in the Wood Pellet Industry

Some of the leading wood pellet market companies include 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, and Tanac S.A, among many others. For instance, in May 2023, Andritz AG launched a number of new and proven technologies, including the world's first autonomous logyard crane, the ANDRITZ PM30-6 biomass pellet mill, and an adjustable plug screw feeder.

Global Wood Pellet Market Segmentation Coverage

• On the basis of the feedstock type, the market has been bifurcated into forest wood and waste, agriculture residue, and others, wherein forest wood and waste represented the largest segment driven by its role in utilizing crop residues efficiently, providing an alternative to traditional agricultural waste disposal while contributing to renewable energy goals.
• Based on the application, the market is categorized into power plants, residential heating, commercial heating, combined heat and power (CHP), and others, amongst which residential heating accounted for the largest market share. There is a rising emphasis on green practices and energy efficiency in areas where people live, which has aided the growth of the global wood pellet market in the residential sector.

Browse IMARC Related Reports on Wood Pellet Market:

• Japan Wood Pellet Market Report