Wood Pellets Market Size – By Product Type, Application Analysis, Share, Growth Forecast, 2025 - 2034

Wood Pellets Market Size

The global wood pellets market was valued at USD 13.6 billion in 2024 and is estimated to grow at a CAGR of over 16.4% from 2025 to 2034, due to the growing consumer inclination towards renewable energy sources. The ongoing climate change, policy transition, and market liberalization have accelerated consumer inclination toward clean energy sources with sustainable benefits.
 

In addition, governments across developed economies, such as Europe, have been undertaking several R&D initiatives focused on reducing local air pollution and its impact on people's health, driving the expansion of RES (Renewable Energy Sources). For instance, RES account for approximately 17% of the total energy consumption in Europe, while over 75% of clean energy research and innovation in the region is conducted by the private sector, which has increased its operating budget. The flourishing public-private partnerships and the growing emphasis on boosting the deployment of renewable energy sources globally will stimulate the demand for wood pellets over the forecast period.
 

Several governments have estimated that it may take more than a decade to totally restore the carbon emissions caused by the consumption of biofuels. Technological improvements aimed at increasing the energy density and quality of wood pellets to reduce greenhouse gas emissions during transportation and upgrading conversation technology may dramatically reduce GHG emissions. Torrefaction is another significant technical innovation that may shape the wood pellets market in the coming years.
 

Wood Pellets Market Trends

The wood pellet market is seeing dynamic trends influenced by both policy and environmental factors. One key trend is the increased demand across Europe, largely due to stringent emissions policies and incentives for renewable heating systems. For instance, EU policies now support bioenergy expansion, promoting wood pellet use for heating and electricity as part of the broader climate targets to reduce reliance on fossil fuels. Germany and France have strong residential markets for wood pellets, driven by programs that incentivize biomass boiler installation amid high fossil fuel costs. However, EU domestic production hasn’t kept pace, leading to significant imports from the U.S. and Canada, along with a recent ban on Russian imports due to geopolitical shifts.
 

In the U.S., the wood pellet industry, primarily based in the southeastern states, also experiences growth largely driven by European demand. However, the EPA has raised concerns over the health and environmental impacts of large pellet production facilities, particularly on air quality and forest resources. Research is underway to assess these impacts and help shape policies that may affect production expansion and environmental safety in local communities.
 

These trends underscore a shift toward sustainable energy, though challenges remain around the balance of production, environmental health, and international trade policies.
 

Wood Pellets Market Analysis

With respect to grade, market is categorized into premium, utility, and standard segments. Utility segment is projected to grow at more than 18% CAGR through 2034, owing to the increasing usage of utility wood pellets in a variety of electronics applications. The product is gaining popularity in key European and Asian Pacific industrial sectors and thus may gain significant traction over the next ten years. However, on the flip side, the presence of more than 6% ash in the utility-grade wood pellets limits their usage in the residential heating sector.
 

Based on application, the industry divides into residential, commercial, industrial, and animal bedding. Industrial application segment of the wood pellets market is expected to account for more than $16.5 billion by the end of 2034. The industrial segment is expected to expand at an appreciable pace throughout the projected period, owing to growing product consumption in the utility and combined heat and power plant sectors across European nations. The recent trend of converting coal-fired facilities to biomass-based units is one of the key factors stimulating the industry revenue streams.
 

Europe wood pellets market is anticipated to grow at over 13.9% CAGR from 2025 to 2034. Major countries, including U.K., Germany and Spain, are driving product demand in the region. According to data provided by the Biomass Industry Society Network (BIN) and Solutions for Our Climate (SFOC), U.K. and Germany imported a total of 6 million metric tons of wood pellets in 2024. Increasing energy consumption in Western Europe is likely to emerge as a primary factor contributing to the product's success in the Europe Region.
 

Wood Pellets Market Share

In the wood pellet market, companies compete on price, sustainable sourcing, product quality, and distribution reach. Differentiation through certifications and efficient supply chains is key to capturing environmentally focused buyers.
 

Wood Pellets Market Companies

Major players operating in the wood pellets industry are: 

• AS Graanul Invest
• Ecochipp
• Ecowood Pellets
• Enviva Partners
• Land Energy
• Lignetics
• LP
• Mallard Creek
• Pacific BioEnergy
• The Westervelt Company
   

Wood Pellets Industry News

• Enviva Inc., the supplier of sustainably derived wood biomass, released a white paper that explored how biomass could be used in industries other than fossil fuels, such as steel, cement, lime, chemicals, and sustainable aviation fuel (SAF).
   
• In April 2020 Mitrabara Adiperdana(MBAP) intended to begin constructing its first wood pellet plant, marking its entry into the renewable energy market. It was the company's subsidiary MalinauHijau Lestari's first venture into the wood pellet manufacturing industry with the construction of the plant, which was expected to be able to produce at least 120,000 tons of pellets per year when fully operational. The plant was expected to be operational in the first quarter of 2024 and gradually ramp up production. 
   

The wood pellets market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Billion) & volume (Kilo Tons) from 2021 to 2034, for the following segments:

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  Market, By Grade

• Premium
• Standard
• Utility

Market, By Application

• Residential
• Commercial
• Industrial
• Animal-bedding

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa