Biomass Pellet Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Biomass Pellet Market Trends & Growth Drivers

Government Initiatives for Emission Reduction Are Key Trend

• Biomass pellets are becoming a reliable source of energy, driven by their renewability, carbon-neutral nature, and easy accessibility, Governments of all nations are organizing multiple programs to encourage the utilization of energy from biomass, including biomass pellets.
• Given the benefits that biomass has to offer, biomass pellets have the potential to be a substantial energy source. The fact that biomass pellets are widely available, renewable, and carbon neutral is the most important element.
• The Biomass Thermal Utilization Act of 2019 in North America promotes biomass-derived fuels and energy sources due to their economic and environmental benefits. In the same way, in India, the Ministry of New and Renewable Energy has launched the Biomass Power and Cogeneration Initiative to promote the usage of biomass pellets, in an effort to reduce energy production from conventional fuels, such as coal. The government also supports industries, such as sugar refineries and thermal power plants, with loans and subsidies from agencies such as the Indian Renewable Energy Development Agency (IREDA).

Increasing Demand for Renewable Sources of Energy Is Major Driver

• The demand for renewable energy sources is continuously burgeoning due to the depleting fossil fuel resources and growing awareness of the harmful environmental effects of products and processes based on fossil fuels. Additionally, the rising need for sustainable energy is expected to drive the demand for biomass pellets.
• In comparison to others, renewable energy sources and technologies typically have little to no environmental effects. For this reason, they are regarded as environment-friendly options.
• Biomass pellets are classified as renewable energy sources as they are produced from wood. These pellets are made of entire logs, sawmill residues, and heaps of forest waste, along with dried and compressed wood fibers. Biomass is an organic resource that may be efficiently used as a source of energy, and it is carbon-neutral, which leaves net-zero-carbon emissions on burning.

Abundance of Biomass Feedstock also Propels Market

• The abundance of biomass feedstock derived from agricultural residue is credited to the rise in crop yields and the consequent availability of wood residue.
• The National Center for Biotechnology Information projects that by 2030–2031, there will be 281 million tons of biomass available. An estimated 205 million tons of CO2 might be mitigated in 2030–31 by replacing coal with other energy sources, such as electricity. Therefore, it is expected that the utilization of agricultural leftovers as the source will help drive the demand for biomass pellets in the near future.

Manufacturing of Biomass Pellets Is Major Challenge

• The use of fertilizers and pesticides, as well as the discharge of agricultural waste, may lead to water pollution during biomass production processes.
• The importance of implementing sustainable practices and comprehensive environmental legislations to mitigate the risks associated with biomass pellet production and use is augmented by these adverse effects on the environment.
• High raw material prices, expensive extraction procedures, and subpar product quality limit the market for biomass pellets. However, as advantageous government policies and regulations change their priority to the adoption of non-conventional and renewable energy sources to expand, players will be presented with profitable business opportunities over the projection period.

Growing Wood Pellet Market Is an Opportunity

• The wood pellets market has a promising opportunity for industry players, driven by the rising demand for renewable energy and supportive government policies.
• Amidst the rising environmental concerns and increasing preference for renewable energy sources, there is a demand for wood pellets as an alternative to fossil fuels.

Biomass Pellet Industry Outlook

Source Insights

• Wood sawdust holds the largest share in the market in 2024, of 30%.For companies looking for inexpensive solutions to recycle their waste materials, wood sawdust has become important.
• It is used as a raw material to produce solid fuel with low moisture content.Sawdust for biomass is a highly cheapest and profitable source of renewable energy.
• Pellets made from this material offer a solution to the increasing pollution issue and have the potential to be an important source of energy in the upcoming years.
• Wood sawdust can be burned to produce steam, which can be used in power generation and commercial and residential space heating.
• Wood sawdust is easily available at homes, commercial spaces, and factories that have had woodwork done.

The sources covered in the report include:

• Industrial Waste
• Wood Sawdust (Largest and Fastest-Growing Category)
• Energy Crops
• Food Waste
• Agriculture Residue
• Virgin Lumber

Application Insights

• The residential heating application category accounted for the largest revenue, share, of 40%, in 2024. The favorable government regulations encouraging the adoption of efficient technologies, such as pellet stoves, instead of coal to reduce emissions from domestic coals are boosting their demand in residential heating applications.
• The commercial heating category is projected to grow at the highest rate over the forecast period, of 7.2%. This will be owing to the growing usage of biomass pellets for heating applications in office buildings, government authority buildings, educational institutions, and other commercial buildings.

The following Application are included in the report:

• Industrial Heating
• Residential Heating (Largest Category)
• Commercial Heating (Fastest-Growing Category)
• Power Generation
• Combined Heat and Power (CHP)

Europe Accounts for the Largest Market Share

• Europe is dominating the biomass pellet market, with a market share of around 45% in 2024, and the regional market is expected to grow at a significant CAGR over the forecast period.
• This growth can be ascribed to the surging demand for biomass pellets for power generation, along with favorable government policies in support of renewable sources of energy across the region. Moreover, the rising pace of technological advancements in the sector are expected to increase the demand for biomass pellets in the coming years.
• The APAC market will grow at the highest rate during the forecast period, of 7.0%. This can be ascribed to the fast expansion in the renewable energy industry in countries, such as China, Japan, and India.
• APAC is the most-polluted region in the world, and countries here are taking concrete initiatives to rejuvenate the environment.
• This includes implementing stringent emission limits on vehicles, power plants, factories, and other industrial energy consumers and promoting low-emission sources of heat and electricity.
• As per estimates, air pollution kills more than 2 million people in India and China each, every year, which reflects the dire need for cleaner air.

The regions and countries analyzed in this report include:

• North America
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe (Largest Regional Market)
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

Biomass Pellet Market Share

• The Biomass Pellet industry is fragmented with the presence of several key players.
• Prominent industry participants are making significant investments in R&D to broaden their product offerings, hence contributing to the expansion of the biomass pellets market. In order to increase their market share, market players are also engaging in a range of calculated strategic actions.
• The developments in this regard include the introduction of new products, contracts, mergers and acquisitions, investment, and cooperation with other businesses. In order to grow and thrive in an increasingly competitive and developing market, player need to provide affordable products.
• The leading companies are also range entering in strategic partnerships and collaborations to acquire more customers and new distribution channels.

Biomass Pellet Industry News

• In February 2022, the Indian government launched the SAMARTH program to support the usage of biomass in thermal coal power.
• In April 2022, CPM launched the twin-track wood pellet technology.
• In November 2021, Enviva and J-Power signed a long-term agreement for the extensive supply of sustainable wood biomass to J-Power's coal-fired power reactors in Japan from Enviva's production facilities in the Southeast of the U.S.
• In September 2022, Enviva inaugurated its wood biomass facility in George County, Mississippi, in order to meet its annual allowed production capacity of 750,000 metric tons per year (MTPY).
• In April 2022, Drax Group PLC inaugurated a new pellet facility in Demopolis, Alabama, which turns sawmill waste, such as sawdust, chips, and shavings, into sustainable biomass pellets.
• In April 2021, Pinnacle Renewable Energy Inc. was purchased by Drax Group PLC, to enable the permanent removal of carbon dioxide from the environment, by providing bioenergy with carbon capture and storage (BECCS).