Biomass pellets are high-density, processed biomass compressed in small cylindrical form. It is derived from organic materials, such as agricultural residue, wood waste, wood chips, sawdust, and forest residue. Biomass pellets are used in power generation as well as heating applications in residential, commercial, and industrial sectors. It has many advantages over unprocessed biomass, such as standardized characteristics, high energy content, storage feasibility, and ease of transportation. Biomass pellets, namely wood pellets, are widely used in residential pellet stoves and boilers. The government's efforts to reduce greenhouse gas emissions and promote the utilization of biomass pellets is driving the biomass pellets market growth.
With the growing focus on sustainability, the demand for biomass pellets such as wood pellets has increased significantly. Wood pellets can be utilized for electricity production as an alternative to coal feedstock. Further, biomass pellets are uniformly shaped, possess high density, and are feasible for transportation and storage. The demand for wood pellets has substantially grown for power generation applications. In Europe and North America, as well as in Asian countries such as China, Japan, and South Korea—wood pellets are primarily used for co-firing at coal-fired power plants. There is a rise in the utilization of alternative materials for coal in large-scale power plants worldwide. In 2021, the Ministry of Power of India mandated at least 5% utilization of biomass pellets in fuel-mix with coal in all coal-fired power plants. Such mandates are driving the growth of the biomass pellets market in India. Further, the large-scale power utilities in several European countries such as the Netherlands and Belgium sourced biomass pellets from the US, Russia, and Canada, as per the United States Department of Agriculture. Thus, the rising demand for wood pellets from the power generation industry is driving the biomass pellets market. Biomass pellets are derived from organic materials such as wood, agricultural residue, and industrial wastes. Many countries consider biomass pellets as a sustainable fuel source; however, there are several environmental concerns related to biomass pellets. The combustion of biomass pellets releases pollutants in the air, including particulate matter, nitrogen oxides, and volatile organic compounds. Further, the production of biomass involves a significant amount of water consumption for processing. Hence, the environmental concerns pertaining to biomass pellets are hampering the biomass pellets market growth.
The global biomass pellets market is segmented on the basis of source, application, and geography. Based on source, the biomass pellets market is segmented into agricultural residue, industrial waste, wood, and others. Based on application, the biomass pellets market is segmented into power plants, industrial heating, residential and commercial heating, and others. By geography, the biomass pellets market is segmented into North America (US, Canada, and Mexico), Europe (Germany, France, Italy, UK, Russia, and Rest of Europe), Asia Pacific (Australia, China, Japan, India, South Korea, and Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and Rest of South & Central America)
Based on source, the biomass pellets market is segmented into agricultural residue, industrial waste, wood, and others. The wood segment held the largest share in the biomass pellets market and is expected to register significant growth over the forecast period. Biomass pellets are manufactured using wood wastes such as sawdust, wood chips, wood shavings, bark, and other residual materials generated from woodworking, sawmills, and timber processing. The wood waste is collected, processed, dried, and pelletized. Wood biomass pellets are widely used in residential heating applications, industrial furnaces, and power plants.
Based on geography, the biomass pellets market is segmented into five key regions—North America, Europe, Asia Pacific, South & Central America, and Middle East & Africa. The global biomass pellets market was dominated by Europe, which accounted for ~US$ 6,478 million in 2022. Asia Pacific is the second-largest contributor, which recorded more than 30% of the global biomass pellets market share in the same year. North America is expected to register a CAGR of over 4.5% during the forecast period. In North America, the biomass pellets market is significantly driven by the regional cost competitiveness of biomass pellets as compared to residential heating oil and propane. The production of wood pellets in North America has gained traction over the past few years due to rising demand from overseas markets. According to the United States Department of Agriculture, the US and Canada supply wood pellets to power plants in the Netherlands and Belgium. The increase in domestic demand for biomass pellets in the region has prompted manufacturers to expand their production capacities. In 2023, Grand River Pellets (Canada) invested US$ 30 million to expand the biomass pellets production capacity from 140,000 to 220,000 metric ton per year. All these factors are driving the biomass pellets market growth in North America.
Various initiatives taken by the key players operating in the biomass pellets market are listed below:
The regional trends and factors influencing the Biomass Pellets Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Biomass Pellets Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.
| Report Attribute | Details |
|---|---|
| Market size in 2022 | US$ 11 Billion |
| Market Size by 2030 | US$ 16.14 Billion |
| Global CAGR (2022 - 2030) | 4.9% |
| Historical Data | 2020-2021 |
| Forecast period | 2023-2030 |
| Segments Covered |
By Source
|
| Regions and Countries Covered | North America
|
| Market leaders and key company profiles |
The Biomass Pellets Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.
Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.
Major Companies operating in the Biomass Pellets Market are:
Disclaimer: The companies listed above are not ranked in any particular order.
The COVID-19 pandemic affected almost all industries in various countries. Lockdowns, travel restrictions, and business shutdowns in North America, Europe, Asia Pacific (APAC), South & Central America, and the Middle East & Africa (MEA) hampered the growth of several industries, including the chemical & materials industry. The shutdown of manufacturing units of biomass pellets companies disturbed global supply chains, manufacturing activities, and delivery schedules. Various companies witnessed delays in product deliveries and a slump in sales of their products in 2020. Most of the power plants and industrial plants were shut down during the pandemic, decreasing the consumption of biomass pellets. In addition, the pandemic has caused fluctuations in biomass pellets prices. However, various industries revived their operations after supply constraints were resolved. Moreover, the rising demand for biomass pellets from the industrial and residential sectors is substantially promoting the biomass pellets market growth.
A few players operating in the global biomass pellets market include Drax Group Plc, Enviva Inc, AS Graanul Invest, Lignetics Inc, Valfei Products Inc, Mallard Creek Inc, Energex American Inc., Wismar Pellets GmbH, UAB Redal Ltd, and Premium Pellet Ltd. Players operating in the global biomass pellets market focus on providing high-quality products to fulfill customer demand.
The List of Companies - Biomass Pellets Market
A few players operating in the global biomass pellets market include Drax Group Plc, Enviva Inc, AS Graanul Invest, Lignetics Inc, Valfei Products Inc, Mallard Creek Inc, Energex American Inc., Wismar Pellets GmbH, UAB Redal Ltd, and Premium Pellet Ltd.
In 2022, Europe held the largest share of the global biomass pellets market. The major consumers of wood pellets in the EU are Italy, the Netherlands, Germany, Denmark, France, Sweden, Belgium, and Austria. The demand for wood pellets in the Netherlands, Denmark, and Belgium was driven by the rising use of pellets in power plants.
The wood segment held the largest share in the global biomass pellets market in 2022. Biomass pellets are manufactured using wood wastes such as sawdust, wood chips, wood shavings, bark, and other residual materials generated from woodworking, sawmills, and timber processing.
The projected growth of the market is attributed to the rising demand for wood pellets from the power generation industry and the adoption of biomass pellets for animal bedding.
Asia Pacific is estimated to register the fastest CAGR in the global biomass pellets market over the forecast period. The rising imports of wood pellets and increasing biomass plant capacities are projected to surge the demand for biomass pellets in the Asia Pacific.
The power plant segment held the largest share of the global biomass pellets market in 2022. Biomass pellets are widely used in power plants to generate electricity. Biomass pellets in power plants offer several environmental benefits, such as renewable energy sources, reduced greenhouse gas emissions, and waste management.