"Actionable Insights to Fuel Your Growth"

Industrial Wood Pellet Market Size, Share & COVID-19 Impact Analysis, By Feedstock (Forest Wastes, Agricultural Waste, and Others), By Application (Power Generation, and Combined Heat and Power [CHP]), and Regional Forecast, 2020-2032

Last Updated: July 01, 2024 | Format: PDF | Report ID: FBI104844



Play Audio Listen to Audio Version

The global industrial wood pellet market size was USD 5.42 billion in 2019 and is projected to reach USD 11.97 billion in 2032 at a CAGR of 8.84% in the 2020-2032 period. The global impact of COVID-19 has been unprecedented and staggering, with industrial pellet mills experiencing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market will exhibit a huge decline of -21.91% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Wood pellets are manufactured from forest by-products, sawdust, and agricultural waste materials. As per the World Bioenergy Association, pellets can replace coal in power generation facilities. Rising concerns about environmental safety and increased demand for clean energy are key factors driving the growth of the market.

COVID-19 Pandemic to Severely Affect Pellet Industry

The outbreak of the infectious disease COVID-19 has caused chaos and panic all over the world resulting in the ceasing of all normal daily activities. Amid the increasing concern over the pandemic, several industries across the globe, such as automotive, aviation, and oil & gas, are experiencing a negative impact on their businesses. Amid the pandemic, there has been a slowdown in forest management activities owing to the shortage of workforce.

The forest-based industry such as the paper industry and wood industry is anticipated to have immediate consequences due to the decline in wood products, such as wood runoff, and disruption in the supply chain. However, the market is anticipated to recover post-pandemic due to a rise in the utilization of wood pellets and pulp for sanitary purposes. On the production side, the supply of raw material was reduced due to the slowdown of the sawmilling activity. For instance, in March 2020, Stelmet, Poland's largest pellet manufacturing company, shut down its wood pellet production until mid-April as a result of the coronavirus outbreak. Also, in the same month, the government of Malaysia enforced a lockdown to limit the spread of COVID-19. As a result, the country’s pellet industries were closed till mid-April.


Request a Free sample to learn more about this report.

Continuously Increasing Demand for Electricity is a Prominent Trend

Rapid growth in population, thriving industrial sector, and increasing infrastructure development have led to a significant rise in electricity generation. Owing to the development of countries and the improvement in the living standard of people, there is a greater demand for energy consumption. As the demand for electricity increases, regions across the globe surge their power generation capacity by installing new plants or expanding the capacity of the existing ones. Due to stringent government regulations regarding carbon emission, companies are more inclined toward the usage of renewable energy sources for power generation.

Using wood pellets has drawn considerable attention globally as an innovative strategy to tackle climate change, minimize GHG emissions, and fulfil the Kyoto Protocol agreements. According to the Global Energy Statistical Yearbook, Europe's total electricity consumption in 2017 was 3,395 TWh, which increased to 3,410 TWh in 2018. 


High Demand for Industrial Wood Pellets from End-use Industry to Fuel Market Growth

Wood pellets are becoming popular across the globe owing to the increasing prices of primary fuel. Moreover, the easy availability of pellet fuel feedstock and low production cost has led to its higher consumption in the industrial sector. Currently, power plants are the largest consumer of industrial pellets. Most of the companies in Europe & North America are converting their power plants from coal to biomass. This is majorly because governments of these countries have opted to fulfill their obligations for renewable energy use by using sustainable biomass for electricity generation.

Recently, Drax Group, a British electrical power generation company, started transitioning its units of coal into wood fuel because the U.K. government is putting tight restrictions on carbon emissions to help fight climate change. Additionally, Engie’s 731MW Rotterdam plant at 10%, Uniper’s 1.1GW Maasvlakte (MPP3) plant at 15%, and RWE’s 777MW Eemshaven A and B units at 15%, all are expected to begin commercial co-firing by the end of 2020. Thus, the demand for pellets is expected to increase continuously.

Supportive Government Initiatives and Policies to Propel Industrial Wood Pellet Market Growth

Of late, carbon emissions have increased considerably due to rapid industrialization, which is ultimately leading to climate change. Governments of various countries are striving to lower the climate change impact by enhancing the penetration of renewable technologies. Several tax incentives programs, such as state income tax credit, state sales tax exemption, local property tax exemption, and corporate income tax deduction, are offered by various governments to promote the adoption of renewable resources.

Regulatory framework and government support, such as government grants and funding programs, which provide investment subsidies and tax benefits, play a key role in driving the industrial wood pellets market. Various government schemes, such as the Renewable Heat Incentive (RHI) introduced in April 2013 have resulted in generating substantial interest in the pellets market in the U.K. Such schemes are expected to drive the market in the near future.


Fulfilling Certification Criteria to Restrain Industrial Wood Pellet Market

Government certification is a valuable tool to assure customers that pellets have come from sustainably managed forests. The increasing certification criteria for exporting goods to Europe and other countries where various policies mandate renewable energy production is a key restraining factor in the market for industrial wood pellet. The Sustainable Forestry Initiative (SFI), American Tree Farm System, Forest Stewardship Council (FSC), and Program for the Endorsement of Forest Certification (PEFC) are the largest forest certification standard organizations and systems in the world. In the industrial sector, pellet producers are concerned about sustainability certification. This is to demonstrate to their customers, and ultimately to governments, that pellets used for power are produced sustainably. Currently, the U.S. has over 300 million hectares of forest land. However, major U.S. standards certify only around 19% of U.S. commercial forestland.


By Feedstock Analysis

To know how our report can help streamline your business, Speak to Analyst

Forest Waste Segment to Lead during the Forecast Period

Based on feedstock, the market is segmented into forest waste, agricultural waste, and others. The forest waste segment held the major share of the global market. Pellets are mainly produced from the by-products of traditional forestry operations such as sawmills and finished wood products manufacturing. Several companies such as Eviva and Drax Group own a private forest for pellet production. In the U.S., across the southeastern region, over 85% of forestland is owned by small scale, private family landowners. Most of these landowners manage their lands as working forests or forests that are carefully managed to sustainably supply a variety of forest products to various industries. 

The agricultural waste segment is expected to contribute significantly during the forecast period. As per the Global Bioenergy Statistics, energy generation from agricultural residues could meet about 3 – 14% of the total energy supply globally.

By Application Analysis

Power Generation Application Held the Dominant Share of the Market

Based on the application, the market can be segmented into power generation and combined heat and power (CHP). Stringent environmental regulations to reduce carbon emission and increasing renewable energy targets are the major factors driving the growth of the market. Emissions at the smokestack from using wood energy to produce power and heat are considered carbon-neutral by regulators and policymakers around the world. This will positively impact the industrial wood pellets market growth. Industrial pellets are considered much better for the environment than coal or any of the fossil fuels that legacy power plants use to produce electricity. According to the U.K. Environment Agency, switching to pellets from coal has been shown to reduce carbon emissions between 74 – 90%.

The CHP segment is projected to grow at a significant pace during the forecast period. The voluntary target within the updated Renewable Energy Directive (RED) for member states to increase renewable energy in heating and cooling by 1.3 percentage/year should open up opportunities for heating application. 


Europe Industrial Wood Pellet Market Size, 2019 (USD Billion)

To get more information on the regional analysis of this market, Request a Free sample

Geographically, the global market has been analyzed across five key regions, including North America, Europe, Asia Pacific, the Middle East & Africa, and South America. Europe held the major share of the global market in 2019. According to the European Pellet Council, the region remained the largest consumer of industrial pellets in the world and consumed 13.20 million tons of industrial pellets in 2019.

The U.K was the largest user of pellet-based energy with its consumption of more than 8 million tonnes. In countries including the U.K, Belgium, and the Netherlands, the residential use of pellets is negligible and the demand for wood pellets is dominated by large-scale power plants. Governments of these countries have opted to fulfill their obligations for renewable energy use by the utilization of sustainable biomass for the generation of electricity. As these countries lack sufficient domestic production of pellets, they largely depend on imports. In 2019, Europe imported around 6.89 million tonnes of pellets only from the U.S.

The Asia Pacific market is expected to grow at the highest pace during the forecast period. China, South Korea, and Japan are the major consumers of industrial wood pellets. South Korea is primarily importing its pellets from Vietnam and Malaysia, while Japan is sourcing its pellet principally from Canada. North America has been a significant region for industrial wood pellets. The U.S. pellet exports increased by 14% in 2019. The U.K. remained the largest importer of U.S. pellets with 78% of the total volume. The Southeastern part of the U.S. has emerged as a major supplier and net exporter of pellets. The industry has continued to thrive on the abundant timber resources in the Southeast. The region contains over 24 million acres of bottomland hardwood forests that account for 65% of the total amount found in the nation.


Key Participants to Concentrate on Expanding their Production Capacities

The global industrial wood pellet market is highly fragmented due to the presence of a large number of players. Each of the present companies in the market has a strong foothold on their base country and region. Several players across the global market are increasingly participating in organic & inorganic developments to solidify their positions globally. Most of the companies are concentrating on expanding their production capacities by introducing new plants or broadening the existing ones.

Recently, in July 2019, Pinnacle Renewable Energy entered into a limited partnership agreement with Tolko Industries Ltd. to build a new industrial pellet production facility in High Level, Alberta, the U.S. In July 2020, Alabama Pellets, a subsidiary of Pinnacle Renewable Energy Inc., planned to invest USD 95 million to construct a pellet production facility in Demopolis, Alabama. The Alabama Pellets facility is expected to have an annual production volume of 360,000 metric tons and will start the initial industrial pellet production by mid-2021.


  • Drax Group (U.K)

  • Enviva (U.S.)

  • Pinnacle Renewable Energy Group (Canada)

  • The Westervelt Company (U.S.)

  • Fram Renewables Fuels LLC (U.S.)

  • AS Graanul Invest (Estonia)

  • Bluesky Biomass Georgia (U.S.)

  • Thunderbolt Biomass Inc. (U.S.)

  • Energex Pellet Fuel, Inc. (U.S.)

  • An Viet Phat Group (Vietnam)


  • In October 2019, Enviva Partners LP decided to construct a new manufacturing plant for wood pellets in Lucedale, Mississippi, U.S. The company will invest around USD 140 million in this new plant.

  • In October 2018, Pinnacle Renewable Holdings Inc. announced that it has completed the acquisition of a 70 percent interest in an industrial pellet production facility located in Aliceville, Alabama from the Westervelt Company.


An Infographic Representation of Industrial Wood Pellet Market

To get information on various segments, share your queries with us

The industrial wood pellet market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies and leading feedstock, and the application of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth rate of the advanced market over recent years.




Study Period


Base Year


Forecast Period


Historic Period



  Value (USD Billion) & Volume (Thousand Tons)



By Feedstock

  • Forest Waste

  • Agricultural Waste

  • Others

By Application

  • Power Generation

  • Combined Heat & Power (CHP)

By Region

  • North America (By Feedstock, Application, and Country)

    • The U.S.

    • Canada

  • Europe (By Feedstock, Application, and Country)

    • The U.K

    • Germany

    • Belgium

    • Denmark

    • Sweden

    • Rest of Europe

  • Asia Pacific (By Feedstock, Application, and Country)

    • China

    • Japan

    • South Korea

    • Rest of Asia Pacific

  • Rest of World (By Feedstock and Application)

Frequently Asked Questions

As per Fortune Business Insights, the global industrial wood pellet market size was USD 5.54 billion in 2019.

The global industrial wood pellet market is projected to grow at a CAGR of 8.56% in the forecast period

Europe industrial wood pellet market stood at USD 2.76 billion in 2019.

Based on the application, the power generation segment is holding the dominant share in the market

The global market size is anticipated to reach USD 7.69 billion by 2027.

Based on the feedstock, the forest waste segment is the leading segment in the market.

Rising concerns about environmental safety and increasing demand for clean energy are the factors driving the growth of the market

The top players in the market are Enviva, LP, Pinnacle Renewable Energy Inc., and Drax Group.

Seeking Comprehensive Intelligence on Different Markets?
Get in Touch with Our Experts

Speak to an Expert
  • 2019-2032
    (In Process)
  • 2023
    (In Process)

Personalize this Research

  • Granular Research on Specified Regions or Segments
  • Companies Profiled based on User Requirement
  • Broader Insights Pertaining to a Specific Segment or Region
  • Breaking Down Competitive Landscape as per Your Requirement
  • Other Specific Requirement on Customization
Request Customization Banner

Energy & Power Clients


Client Testimonials

“We are quite happy with the methodology you outlined. We really appreciate the time your team has spent on this project, and the efforts of your team to answer our questions.”

- One of the largest & renowned medical research centers based in the U.S. on a report on the U.S. NIPT Market.

“Thanks a million. The report looks great!”

- Feedback from a consultant on a report on the U.S. Beef Market.

“Thanks for the excellent report and the insights regarding the lactose market.”

- Brazil based company specializing in production of protein ingredients.

“I liked the report; would it be possible to send me the PPT version as I want to use a few slides in an internal presentation that I am preparing.”

- Global Digital Services Agency on a report on the Global Luxury Goods Market.

“This report is really well done and we really appreciate it! Again, I may have questions as we dig in deeper. Thanks again for some really good work.”

- U.S.-based biotechnology company focussing on treatment of chronic pain.

“Kudos to your team. Thank you very much for your support and agility to answer our questions.”

- Europe-based provider of solutions to automate data centre operations.

“We appreciate you and your team taking out time to share the report and data file with us, and we are grateful for the flexibility provided to modify the document as per request. This does help us in our business decision making. We would be pleased to work with you again, and hope to continue our business relationship long into the future.”

- India-based manufacturer of industrial and specialty intermediates with a strong global presence.

“I want to first congratulate you on the great work done on the Medical Platforms project. Thank you so much for all your efforts.”

- One of the largest cosmetics company in the world.

“Thank you very much. I really appreciate the work your team has done. I feel very comfortable recommending your services to some of the other startups that I’m working with, and will likely establish a good long partnership with you.”

- U.S. based startup operating in the cultivated meat market.

“We received the below report on the U.S. market from you. We were very satisfied with the report.”

- Global hearing aids manufacturer.

“I just finished my first pass-through of the report. Great work! Thank you!”

- U.S. based solar racking solutions provider.

“Thanks again for the great work on our last partnership. We are ramping up a new project to understand the imaging and imaging service and distribution market in the U.S.”

- World’s leading advisory firm.

“We feel positive about the results. Based on the presented results, we will do strategic review of this new information and might commission a detailed study on some of the modules included in the report after end of the year. Overall we are very satisfied and please pass on the praise to the team. Thank you for the co-operation!”

- Germany based machine construction company.

“Thank you very much for the very good report. I have another requirement on cutting tools, paper crafts and decorative items.”

- Japanese manufacturing company of stationery products.

“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”

- One of the Leading Food Companies in Germany

“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”

- Intuitive Surgical

“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”

- Major Food Company in Japan

“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”

- Ziering Medical

“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”

- Major Manufacturer of Precision Machine Parts in India

“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”

- Hewlett-Packard

“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”

- Global Management Consulting Firm

“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”

- UK-based Start-up in the Medical Devices Sector

“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”

- One of the Largest Companies in the Defence Industry
We use cookies to enhance your experience. By continuing to visit this site you agree to our use of cookies . Privacy.