Wood Pellets Market 2020 and Forecast 2021-2027

                                          
Report Overview: Wood Pellets Market


The global wood pellets market size was estimated at USD 7.77 billion in 2020 and is expected to register a revenue-based CAGR of 8.3% over the forecast period 2021-2027. Growing consciousness regarding the use of renewable energy sources for space heating in residential and commercial heating is likely to propel the demand. Wood pellets undergo complete combustion while burning, thereby providing more heat as compared to the other biomass fuels. In addition, clean combustion of wood pellets contributes to its application in pellet stoves and pellet fireplaces along with the tax benefits and incentives associated with renewable energy and energy efficiency.

The demand for wood pellets in fueling the power plants for electricity generation is projected to witness significant growth owing to the rising number of power plants in the country. China has banned the use of coal-fired boilers in the East and Guangdong province. The low cost of the product in the aforementioned regions is also anticipated to drive the market growth in the forthcoming years.

The rising demand for wood pellets from power generation industry is likely to drive the market growth over the forecast period. In addition, increasing awareness regarding the use of renewable energy sources for power generation coupled with the high combustion of wood pellets is likely to augment the product demand.

Favorable government initiatives and global agreements in support of renewable sources of energy are anticipated to drive the market expansion in the forthcoming years. Governments of various countries provide incentives and subsidies to consumers using wood pellets for heating applications. The UK government launched the Domestic Renewable Heat Incentive (Domestic RHI) scheme for promoting the use of renewable heat.

The market players engage in R&D activities to increase the efficiency of the wood pellet manufacturing process. New and advanced designs for pellet mills are being developed to obtain high yield with optimum fuel input. Extensive research is being carried out to achieve high calorific value wood pellets from the available feedstock. All these factors are anticipated to positively influence the growth of the market in near future.

Application Insights: Wood Pellets Market

Based on application, the wood pellet market is segmented into residential heating, commercial heating, power plants, and Combined Heat and Power (CHP). Clean combustion of wood pellets contributes to its application in pellet stoves and pellet fireplaces, thereby driving its demand in the power generation and heating applications. Favorable government policies regarding the use of efficient technologies such as pellet stoves instead of coal for reducing the emissions from domestic coal and wood heating devices are projected to drive the product demand in the residential heating application. In addition, the automation in pellet stoves, such as the automatic pellet feeding system is anticipated to generate the demand.

Wood pellets are used in electricity generation in coal-based power plants, where they are co-fired along with the coal for the reduction in Greenhouse Gas (GHG) emissions. The easy adaptability of wood pellets with automated combustion systems in coal-fired power plants is expected to drive its demand from the power plants application segment.The commercial application segment is anticipated to show significant growth over the forecast period owing to increasing adoption of wool pellets for space heating in federal or municipal buildings, office buildings, educational facilities, and other commercial buildings. The attributes of wood pellets include convenience and ease of use, and bulk storage in less space is expected to augment its demand from the commercial heating segment.

Regional Insights: Wood Pellets Market

Europe accounts for a significant market share of 77.8% in terms of volume in 2019. The demand for wood pellets is expected to witness significant growth on account of a wide range of market factors including increasing consumption of the product in power generation and the incentives offered by the European Union (EU) member states over the forecast period.

The major factors driving the demand for wood pellets in North America include the regional price competitiveness with propane and residential heating oil along with the increasing replacement of traditional burners for improving automatic feed-in and comfort. The favorable climatic conditions for the requirement of heating in the residential and commercial building is expected to fuel the regional market growth over the forecast period.

Asia Pacific is expected to register the highest CAGR of 13.3% from 2020 to 2027 owing to the favorable government policies in Japan, China, and South Korea regarding power generation and CHP. Furthermore, the significant development of the renewable energy sector in India, Japan, and China coupled with the increasing number of power plants is anticipated to drive the regional demand for wood pellets.

Central and South America are one of the emerging regions with high manufacturing potential. The region has over one-fourth of the world’s entire forests and half of the tropical forest, providing essential national and global environmental services. The growing forestry sector is projected to increase raw material availability, thereby aiding the production of pellets.
Wood Pellets Market Share Insights

The key players operating in the market are the manufacturers such as

 	
 Canfor
 	
Schweighofer
 	
Stora Enso
 	
Drax Group Plc.
 	
Enviva LP
 	
Pinnacle Renewable Energy Group
 	
Pacific BioEnergy.

These companies position their products for important coal-based power generation companies such as Ørsted, E.ON, Npower, RWE, and Vattenfall AB, by signing long-term contracts.
Small-scale players cater to a particular country or region where they are located and compete on the basis of raw material availability and transportation facilities. They also compete on the basis of regional demand and their penetration in the regional markets. Several regional players adopt expansion strategies by becoming a distribution partner for global players.
This report forecasts market share and revenue growth at global, regional, and country levels and provides an analysis of industry trends in each of the sub-segments from 2016 to 2027. Trusted Business Insights has segmented the global wood pellets market report based on application and region:

Application Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

 	
Power Plants
 	
Residential Heating
 	
Commercial Heating
 	
Combined Heat and Power (CHP)