Global Wood Pellet Market to Reach USD 22.6 Billion by 2033, Driven by Increasing Renewable Energy Policies

According to the latest report by IMARC Group, titled “Wood Pellet Market Report by Feedstock Type (Forest Wood and Waste, Agriculture Residue, and Others), Application (Power Plants, Residential Heating, Commercial Heating, Combined Heat and Power (CHP), and Others), and Region 2025-2033,” the global wood pellet market size reached USD 14.0 Billion in 2024. Wood pellets are a type of biomass fuel made from compressed sawdust, wood shavings, or other wood residues. These small cylindrical pellets typically measure about 6-8 millimeters in diameter and 10-30 millimeters in length. Wood pellets are manufactured through a process called pelletization, where the raw wood materials are ground into a fine powder, dried, and then compressed at high pressure to form dense pellets. Wood pellets have gained popularity as a sustainable and environmentally friendly alternative to traditional fossil fuels like coal and oil. They are considered a renewable energy source because they are made from wood, a natural and abundant resource. The combustion of wood pellets releases carbon dioxide, but this is offset by the carbon dioxide absorbed by the trees during their growth, thus making wood pellets a carbon-neutral fuel source. Wood pellets are primarily used for heating purposes, especially in residential pellet stoves and boilers. They are also used in industrial settings for power generation and as a cost-effective fuel in some large-scale heating systems.

Global Wood Pellet Market Trends:

Government incentives and renewable energy targets facilitate the use of biomass fuels like wood pellets, which represents one of the key factors driving the growth of the market across the globe. Subsidies, tax credits, and mandates for renewable energy adoption are promoting the market growth. Wood pellets are considered carbon-neutral because the carbon dioxide released during combustion is offset by the carbon dioxide absorbed by the trees during their growth. This environmental benefit aligns with global efforts to mitigate climate change. Wood pellets have a high energy density, which makes them an efficient and cost-effective heating source for residential and industrial applications. This energy efficiency drives the adoption of wood pallets. Wood pellets often provide cost savings as compared to fossil fuels like heating oil or natural gas, especially in regions with abundant forest resources which makes wood pellets an attractive choice, thus fueling the growth of the market. The rising use of wood pellets for heating and energy production reduces greenhouse gas emissions as compared to coal or oil, aligning with emissions reduction goals and air quality improvement which is propelling the growth of the market. The growing consumer awareness of pellet stoves and boilers as efficient and clean heating options for homes is driving the demand for wood pellets in the residential sector. The rising use of wood pallets in various industrial processes, including power generation and district heating, as an environmentally friendly and sustainable fuel source is facilitating the growth of the market. Advances in pellet production technology are improving the quality and consistency of wood pellets, thus making them more appealing to consumers and industries. The growing environmental consciousness and concerns about air quality and deforestation promote the use of sustainably sourced wood pellets which is creating a positive outlook for the market across the globe. Looking forward, the market value is projected to reach USD 22.6 Billion by 2033, expanding at a CAGR of 5.5% during 2025-2033.

Market Summary:

• Based on the feedstock type, the market has been divided into forest wood and waste, agriculture residue, and others. Presently, forest wood and waste hold the largest market share across the globe.
• On the basis of the application, the market has been classified into power plants, residential heating, commercial heating, combined heat and power (CHP), and others. Currently, residential heating is dominating the market across the globe.
• Based on the region, the market has been divided into North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. Presently, Europe holds the largest market share across the globe.
• The competitive landscape of the market has been studied in the report with the detailed profiles of the key players operating in the market. Some of the key players include Andritz AG, Asia Biomass Public Company Limited, Drax Group PLC, Energex, Enviva LP, Fram Renewable Fuels LLC, Land Energy Limited, Lignetics Inc., Mallard Creek Inc., Pacific BioEnergy Corporation, Stora Enso Oyj, Svenska Cellulosa Aktiebolaget, Tanac S.A., etc.

Report Coverage:

About Us:

IMARC Group is a leading market research company that offers management strategy and market research worldwide. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses.

IMARC’s information products include major market, scientific, economic and technological developments for business leaders in pharmaceutical, industrial, and high technology organizations. Market forecasts and industry analysis for biotechnology, advanced materials, pharmaceuticals, food and beverage, travel and tourism, nanotechnology and novel processing methods are at the top of the company’s expertise.

Contact Us:

IMARC Group
134 N 4th St.
Brooklyn, NY 11249, USA
Email: Sales@imarcgroup.com
Americas:- +1 631 791 1145 | Africa and Europe :- +44-753-713-2163 | Asia: +91-120-433-0800