Renewable Energy Policies and Increasing Demand for Bioenergy Propel the Global Wood Pellets Market in the Forecast Period 2025-2029
The TechSci Research report, "Wood Pellets Market - Global Industry Size, Share, Trends, Opportunity, and Forecast 2019-2029," anticipates robust growth in the Global Wood Pellets Market during the forecast period. The primary drivers include the rising demand for wood pellets in clean energy generation, particularly in Europe. However, the adoption of alternative renewable energy sources globally, such as solar photovoltaic, wind energy, and geothermal, may hinder market growth. The heating application, holding a significant market share in 2021, is expected to dominate throughout the forecast period.
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Wood pellets, recognized for their potential to replace coal in power generation facilities by the World Bioenergy Association, have undergone thermal upgrading processes, including torrefaction, hydrothermal carbonization, and steam explosion. This upgrade allows wood pellets to function with coal properties. The Asia-Pacific region, with a substantial number of coal power plants, presents an opportunity for market growth. Europe, with significant wood pellet production in 2021, is projected to dominate the market during the forecast period.
In terms of applications, the Heating segment emerged as the dominant segment in 2023. Wood pellets, being a solid biomass fuel primarily produced from wood residues and agricultural by-products, offer standardized properties, high energy content, and high density. They are widely used in residential and commercial sectors for various purposes, such as cooking, grilling, and supplying heat to homes. The cost-effectiveness of wood pellets compared to other fuels has made them a preferred option in residential and commercial sectors. The wood pellet market experienced a price decline in 2020 due to oversupply.
Wood pellets, as a renewable energy source, have received subsidies and incentives from governments globally. In January 2021, the United States introduced the Wood and Pellet Heater Investment Tax Credit (ITC), providing a 26% tax credit for efficient wood and pellet stoves. The United Kingdom amended its Domestic Renewable Heat Incentive (Domestic RHI) in April 2021 to promote renewable heat at residential levels.
Regionally, Europe is expected to dominate the market throughout the forecast period, with a predicted 30-40% increase in wood pellet demand between 2021 and 2026. Europe accounts for over 50% of global pellet demand, with applications in residential heating, power plants, commercial heating, and combined heat and power plants. The region has witnessed the conversion of power stations, such as Drax Power Station in North Yorkshire, to exclusively use biomass.
As of 2020, sawmill residues constitute 85% of the mix for wood pellet production, followed by roundwood (13%) and recovered wood (2%). While wood residues remain essential feedstock, technological advancements in the region are likely to increase demand for wood pellets.
Key market players in the Global Wood Pellets Market are: -
- Enviva Partners LP
- AS Graanul Invest
- Drax Group PLC
- Fram Renewable Fuels LLC
- Segezha Group JSC
- Lignetics Inc.
- Biopower Sustainable Energy Corp.
- Asia Biomass Public Company Limited
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The global wood pellets market is driven by renewable energy policies worldwide, aligning with efforts to reduce carbon emissions. The increasing demand for bioenergy, along with government incentives and technological advancements, enhances the market's growth. Consumer awareness of the environmental benefits of wood pellets further contributes to the market's buoyancy, aligning with the global push for a green energy transition. The report, titled "Wood Pellets Market - Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented by Application (Heating and Power Generation), End-User (Residential, Industrial, Commercial), By Region, and By Competition 2019-2029," aims to provide comprehensive market intelligence for informed decision-making.
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