Industrial Wood Pellet Market to Grow at 8.56% CAGR till 2027; Rising Concerns about Environmental Safety to Augment Growth

The global industrial wood pellet market is projected to reach USD 7.69 billion by 2027 owing to the increasing initiatives by governments to promote the usage of biofuels, observes Fortune Business Insights™ in its report, titled, “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, 2020-2027.” As per the analysis, the market value stood at USD 5.54 billion in 2019 and is expected to register a CAGR of 8.56% from 2020 to 2027.

Pinnacle Renewable Energy Inc. Enters Two New Long-term Contracts

In July 2019, Pinnacle Renewable Energy Inc. entered into two new long-term, take-or-pay off-take contracts with customers in Japan and South Korea. The contract in Japan is an extension of an existing contract with Mitsubishi Corporation, a globally integrated business enterprise in Japan. Under this contract, the company will supply 110,000 to 120,000 metric tons per annum of industrial wood pellets to Mitsubishi Corporation from the beginning of 2021.

The contract in South Korea is agreed with GS Global Corporation, which is a diversified conglomerate in the country. In addition, the company is the first dedicated biomass independent power producer in the country. Under this contract, Pinnacle will supply 100,000 MTPA of industrial wood pellets to GS from the first quarter of 2022.

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Rising Demand in End-user Industries to Drive Growth

Increasing initiatives from governments across the world promoting biofuel in order to reduce carbon emissions are anticipated to drive the industrial wood pellet market growth. For instance, according to the Economic Times, in May 2018, the Indian government approved the National Policy on Biofuels, which was aimed at promoting the use of biofuels. In addition, the rising demand for industrial type of wood pellets in various end-user industries is projected to further strengthen their growth. However, stringent certification criteria from governments worldwide regarding wood pellets are estimated to restrain growth.

Increasing Production Capacity to Aid Key Players Gain Prominence

Key players operating in the global market are focusing on enhancing their production capacity to a greater scale. This will help them gain prominence over other enterprises. For instance, in July 2020, Alabama Pellets, a subsidiary of Pinnacle Renewable Energy Inc., announced its plans to invest USD 95 million for the construction of a wood pellet production facility in Demopolis, Alabama.

Industry Developments-

• In December 2019, Enviva LP received the approval of a permit from the Alabama Department of Environmental Management (ADEM) for the construction of a wood pellet facility in Sumter County. The facility will be located at the Port of Epes Industrial Park and represent an initial investment of USD 175 million.
• In October 2019, In October 2019, Enviva Partners LP announced the construction of a new manufacturing plant for wood pellets in Lucedale, Mississippi, U.S. The company will invest around USD 140 million in this new plant.

List of Key Players Covered in the Report:

• 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)
• Others

Further Report Findings:

• Based on the feedstock, the forest waste segment is estimated to dominate the market. It held 92.1% industrial wood pellet market share in 2019 as by-products from actively managed forests are the primary source for producing industrial wood pellets.
• Based on the region, Europe is set to lead the market in the forecast timeline with a market value of USD 2.76 billion in 2019. High consumption in the region is the primary driving factor.

Table of Segmentation