Wood Pellets Market Analysis

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.