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

Philippines Charcoal Market Trends & Drivers

Changing Food Preferences Are Key Market Trend

• The market is seeing a significant change in pattern, which is being driven by varying food preferences. Consumers are increasingly adopting the process of grilling and barbecuing as a segment of their cooking choices, which adds fuel to the demand for charcoal for these cooking procedures.
• This change is prompted by factors like a cultural inclination toward grilled cooking, rising social gatherings, and increasing outdoor dining experiences.
• This changing food preferences is hitting the charcoal market, which leads to an increase in demand for different forms of charcoal for grilling applications.

Charcoal’s Cost Advantage in Residential and Commercial Settings

• In general, households and commercial installations in the Philippines prefer charcoal, owing to traditional favorability and highly charcoal-integrated historical cooking regimes, relative ease in availability of feedstock (wood and coconut shells), affordability of stoves and accessories, taste favorability, and low cost of charcoal in comparison to conventional fuels.
• Low-income households to even upper-income households demonstrate high volume usage patterns of the conventional fuel source owing to the aforementioned factors.
• In addition, the growing sales of barbecue food in the country, which uses lump charcoal or charcoal briquettes to cook food with a flavor of smoky and grilled.
• Furthermore, the demand for such products to produce activated carbon is expected to catalyze the demand during the forecast period.

Overcoming Regulatory Hurdles in Deforestation Practices

• Charcoal production is often perceived to have a destructive environmental and ecological impact. One of the most cited effects is the clearance of woodlands or forests, i.e., deforestation.
• Several charcoal producers in the country follow unsustainable ways of producing charcoal to meet their energy needs, as sustainable solutions, such as the utilization of metal kilns, are quite expensive.
• The majority of unsustainable charcoal production comes from the cutting down of forest trees.
• Methods for producing charcoal involve the use of pit kilns and earth mound kilns. In the pit kiln method, wood is placed inside a hole excavated in the ground, covered with dirt, and then burned.
• In the earth mound kiln method, the wood is accumulated on the ground, covered with soil, and then burned. The drawback of these methods is that they do not yield the maximum amount of charcoal and, thus, result in the wastage of more wood than required to produce a certain amount of charcoal.
• This high requirement of wood to produce charcoal leads to deforestation, which as a result causes an adverse impact on the local species inhabiting the area. Thus, the increasing deforestation rate may restrain the charcoal market growth in the forecast period.

Philippines Charcoal Industry Outlook

Type Insights

• Lump charcoal is the largest category, with a revenue share of 40% in 2023, in the market. This dominance is due to several reasons such as lump charcoal is pure wood, free from binders or petroleum-based accelerants.
• The lump charcoal can be refueled without producing the acrid smoke that is associated with freshly lit briquettes.
• In addition, the lump charcoal lights more quickly, burns hotter (around 1000 oF), produces less ash content, and imparts flavor to foods.
• Owing to the aforementioned reasons, it is mostly used as a fuel in cooking applications.
• Thus, the rising use of lump charcoal as a recreational cooking material over industrial applications is also driving the Philippines charcoal market.
• On the other hand, the charcoal briquettes category is expected to witness the highest CAGR of 3.0% from 2024 to 2030 in the market.
• This can be due to their advantages such as steady heat output, long-burning time, easy usage, high efficiency, and environmental sustainability.
• There are so many customers who are using briquettes over other charcoals since they have constant burning properties and produce less smoke as compared to others.
• This pattern of utilization is aligning with a worldwide movement toward more sustainable and appropriate charcoal substitutes.

Further, the type segment is categorized into:

• Lump Charcoal (Largest Type)
• Charcoal Briquettes (Fastest-Growing Type)
• Japanese Charcoal
• Sugar Charcoal
• Others

Application Insights

• The cooking fuel category dominates the market, with a share of around 35% in 2023. The growing demand for charcoal as a fuel in the country is due to its advantages over other fuels, as it produces less smoke while burning, requires little preparation before actual use, has high energy content per unit mass, can be easily transported, stored, and reused when left over after cooking.
• Furthermore, despite changes in lifestyle and technological advancements, Filipinos prefer charcoal as the fuel for cooking purposes over other sources of energy such as electricity, kerosene, and liquified petroleum gas (LPG), owing to its smoky fragrance that enhances the flavor of food.
• Whereas, the filtration category is expected to witness the highest CAGR of 3.2% from 2024 to 2030 in the market. This category is witnessing growth due to the rising awareness about environmental pollutants and the need for cleaner air and water resources.
• Activated charcoal has a versatile nature in directing filtration needs, which adds popularity to this category. Also, it has exceptional adsorption properties, which is helping in driving the market.

Further, below are the listed applications:

• Metallurgical
• Cooking Fuel (Largest Application Category)
• Industrial
• Filtration (Fastest-Growing Category)
• Others

Competitive Analysis

The Philippines charcoal market is highly unorganized in nature. It is characterized by high-volume manufacturing of charcoal by residential end-users for self-consumption, and sales using unregulated market channels to close proximity buyers. Players operating in the country are small-to-medium-scale enterprises. In recent times, they have added green charcoal to their product portfolios, to effectively navigate environmental and regulatory constraints.

Philippines Charcoal Industry News

• In December 2023, Toyota Philippines accelerated carbon neutrality with 100% renewable energy in manufacturing.
• In December 2023, the Philippine-based energy major, ACEN Corp announced a new collaboration with The Coal to Clean Credit Initiative (CCCI) to use carbon finance to retire a coal power plant and replace it with renewable energy.