Biomass Pellets Market Trends

Global Biomass Pellets Market Overview

Biomass Pellets Market Size was valued at USD 6.9 Billion in 2023. The Biomass Pellet industry is projected to grow from USD 7.28 Billion in 2024 to USD 10.5 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 5.50% during the forecast period (2024 - 2032). Due to their high burning efficiency, low moisture content, and decreased density, wood pellets are in great demand across a variety of end uses sectors, contributing to the growing need for renewable energy, are the key market drivers enhancing the market growth.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Biomass Pellets Market Trends

• Government initiatives encouraging biomass growth is driving the market growth

Given the advantages provided by biomass, biomass pellets are a significant source of energy. In addition to being renewable and carbon neutral, biomass pellets are also easily accessible. These factors have led to numerous programs and subsidies being granted by most governments. These programs and financial aid encourage the use of energy made from biomass, such as biomass pellets. In North America, for instance, the Biomass Thermal Utilization Act (BTU Act) of 2019 aims to acknowledge and promote the economic and environmental advantages of fuels and energy sources derived from biomass. This law offers home and business applications using clean wood heating systems a 15% to 30% rebate.

In India, the Biomass Power and Cogeneration initiative was put into place by the Ministry of New and Renewable Energy. This project's main goal is to encourage the usage of biomass pellets. It also encourages the production of energy using conventional fuels like coal. In India, among other places, this effort is used for cogeneration in sugar refineries and thermal power plants. The establishment of biomass power and bagasse cogeneration projects is facilitated by loans and advantageous subsidies from the Indian Renewable Energy Development Agency (IREDA). It is anticipated that these policies will promote the use of biomass pellets.

Demand for renewable energy sources has increased significantly, which is one of the main drivers fueling market expansion. Because of this, many businesses in the electricity sector are moving toward using these pellets. Regulatory agencies and international organizations from all over the world are concentrating on the adoption of rigorous environmental restrictions in response to growing worries about warming. As a result, biomass pellets are emerging as one of the crucial effective options that might aid in lessening the dependence on fossil fuels. In addition, these pellets are considered a viable option for reducing emissions of greenhouse gases. Thus, driving the Biomass Pellets market revenue.

Enviva and J-Power agreed on a long-term deal in November 2021 whereby Enviva would extensively supply sustainable wood biomasses sourced from its production facilities located in the Southeast US to J-Power-owned coal-fired power reactors in Japan. Enviva and Jay Power reached the agreement that allowed Enviva to extensively source fuel for Jay Power’s coal-fired electricity generating plants in Japan from its operations based in the eastern part of the United States. 

Biomass Pellets Market Segment Insights

Biomass Pellets Source Insights

The Biomass Pellets market segmentation, based on Source, includes industrial waste & co-product, agriculture residue, food waste, energy crops, virgin lumber, and others. During the anticipated period, the agricultural residue segment is anticipated to continue to rule the market as it did in 2022. Agriculture has a large GDP contribution in nations like Brazil, India, and others. In these nations, crop residue is abundant and widely available. The manufacturing of biomass pellets uses this surplus. Pellets made from agricultural waste, or biomass, are becoming more popular.

Biomass Pellets Type Insights

The Biomass Pellets market segmentation, based on Type, includes wood pellets, agri pellets, torrefied pellets, and others. In 2022, the wood pellets category led the world market for biomass pellets. One of the main causes impacting the unavoidable increase in the growth rate is the growing demand for wood pellets in the residential and commercial heating sectors, which is compelling producers to create them in large quantities.

Biomass Pellets Application Insights

The Biomass Pellets market segmentation, based on application, includes power generation, industrial heating, residential heating, and others. The biomass pellets market was dominated by the power generation sector in 2022. As demand increases as a result of factors like urbanization, industrialisation, and population development, governments around the world are striving to switch to biomass power generation. As rural electrification makes it possible for decentralized energy generation, which is predicted to drive the market during the forecasted period, demand for biomass gasifiers is rising.

Figure 1: Biomass Pellets Market, by Application, 2023 & 2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Biomass Pellets Regional Insights

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. Europe Biomass Pellets market dominated this market in 2022 (45.80%). For the purpose of generating electricity, Europe is the top consuming region for wood pellets. Due to government incentives for using renewable energy sources, it is predicted that demand for biomass pellets would rise throughout the projection period. Further, the German Biomass Pellets market held the largest market share, and the U.K Biomass Pellets market was the fastest growing market in the European region

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: BIOMASS PELLETS MARKET SHARE BY REGION 2023 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

The North America Biomass Pellets Market is expected to register significant growth from 2023 to 2032. Due to the increasing number of power plants in the area, it is anticipated that the need for biomass pellets used to fuel power plants for the production of electricity will increase significantly. Further, the U.S. Biomass Pellets market held the largest market share, and the Canada Biomass Pellets market was the fastest growing market in the North America region.

The Asia Pacific Biomass Pellets market, accounted for the healthy market share in 2022. In the east and in the province of Guangdong, China has outlawed the use of coal-fired boilers. Additionally, market expansion is predicted to be fueled by the low cost of pellets in the aforementioned regions. Moreover, China’s Biomass Pellets market held the largest market share, and the Indian Biomass Pellets market was the fastest growing market in the Asia-Pacific region.

Biomass Pellets Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Biomass Pellets market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Biomass Pellets industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the Biomass Pellets industry to benefit clients and increase the market sector. In recent years, the Biomass Pellets industry has offered some of the most significant advantages to medicine. Major players in the Biomass Pellets market, including Drax Group Plc, Enviva, German Pellets GmbH, AS Graanul Invest, Pinnacle Renewable Energy Inc, Lignetics, Zilkha Biomass Energy, Fram Fuels, Abellon CleanEnergy Limited, Ecostan, JP Green Fuels, The Westervelt Company, Inc, Forest Energy Corporation, and New England Wood Pellet, are attempting to increase market demand by investing in research and development operations.

Previously known as Enviva Partners LP, Enviva Inc (Enviva) is a provider of utility-grade wood pellets. The business collects wood fiber from natural resources and transforms it into a transportable form. Wood pellets and wood chips, which are processed forms of woody biomass fuels, make up its products. The corporation runs large-scale manufacturing facilities in the US Mid-Atlantic and Gulf Coast regions. In order to ship and sell wood pellets to power plants in the UK and Europe, Enviva also has access to rivers and railroads. Additionally, it offers terminaling services to owners of other bulk commodities as well as to producers of wood pellets outside of its own operation. The US city of Bethesda, Maryland, is home to Enviva's headquarters. Enviva, Inc. and J-Power, a Tokyo-based utility, agreed into a long-term partnership in November 2021 for the large-scale supply of sustainable wood biomass from Enviva's production facilities in the Southeast of the United States to J-Power's coal-fired power plants in Japan.

The company A.P. Moller - Maersk AS (APMM) offers logistics and transportation services. Through its subsidiaries and affiliates, it runs ports and shipping containers. The business provides intermodal transportation and transports dry goods, refrigerated freight, special cargo, as well as sells secondhand containers. Maersk Line, Damco, APM Terminals, Svitzer, Twill, Sealand, Hamburg Sud, Alianca, Maersk Container Industry, and Maersk Training are some of APMM's principal brands. Additionally, the business produces dry and chilled containers. APMM provides services to the manufacturing, shipbuilding, retail, and logistics sectors. In addition to Asia-Pacific, the corporation is present in North America, the Middle East, Europe, and Africa. Copenhagen, Denmark serves as the home office for APMM. The largest geothermal heating plant in the EU will be developed and run by A.P. Moller Holding's Innargi geothermal heating company near Aarhus, Denmark. The arrangement is for 30 years.

Key Companies in the Biomass Pellets market include

• Drax Group Plc


• Enviva


• German Pellets GmbH


• AS Graanul Invest


• Pinnacle Renewable Energy Inc


• Lignetics


• Zilkha Biomass Energy


• Fram Fuels


• Abellon CleanEnergy Limited


• Ecostan


• JP Green Fuels


• The Westervelt Company, Inc


• Forest Energy Corporation


• New England Wood Pellet

Biomass Pellets Industry Developments

Pinnacle Renewable Energy Inc.’s purchase by Drax Group PLC that concluded last year made bioenergy with carbon capture& storage (BECCS) available so as to permanently take out carbon dioxide from the atmosphere. It is zero-emission energy generation which involves capturing CO2 produced by burning organic materials like biomass and utilizing it instead of being released into the air as an energy source. 

The Biomass Thermal Utilization Act (BTU Act) of 2019 is an attempt made in North America to acknowledge the benefits of environmentally friendly and renewable fuels derived from biomass. This law allows fifteen percent (15%) to thirty percent (30%) credit for clean wood heating systems used both residentially and commercially.

NCBI projected two hundred eighty-one million metric tons of biomass by 2030-2031. Replacing coal with other energy, such as electricity, can help mitigate approximately two hundred five million metric tons of CO2 by the year 2030-31. Also, agricultural residues will soon increase the demand for biomass pellets. Enviva is currently the largest producer of wooden pellets. Which on June 2023 announced that construction activities had started for a new plant producing wood pellets in Sumter County, Florida, USA.

October 2024: WKE is a company committed to using alternative fuels in the manufacturing process. They have added more pellet sizes to their product line – 9mm and 6mm gradual columns for cement kilns with longer burning time and lesser residual mass and 16mm columns for biomass facilities. These advancements are intended to alleviate major problems in the industry and satisfy the rising needs of both the UK and overseas markets. The new range of pellet sizes is a giant leap towards the accomplishment of their goal to sell cleaner, cheaper and greener substitute fuels. By providing custom-tailored products for specific sectors like cement, they will also help these energy-intensive industries further reduce their fossil fuel reliance while reducing their energy expenditure and managing the large volume of waste flying to landfills.

In May 2024, Malakoff Corporation Berhad, along with MAXIM, took the initiative and implemented the Biomass Co-Firing project combining this technology on its 2,100 MW coal-fired Tanjung Bin Power Plant (TBPP) situated at Johor Pontian. As part of these efforts, which include the Government of Malaysia`s National Energy Transition Roadmap (NETR), on May 1, 2017, Malakoff committed to achieving a 45% reduction in carbon intensity and a 70% share of Renewable Energy mix by the year of 2050. This main project hopes to have TBPP operating with 15% biomass co-firing with coal by 2027. After a successful trial of a 0.5% biomass blend in December 2022, Malakoff started last year an investment campaign to expand up to a total of 2% biomass co-firing capacity in the first quarter of 2024, aiming to improve it between 3%-5% in 2025, with a final objective of reaching 15% by 2027. It will further improve the stability of the grid, consistent with Malaysia`s objectives of a Just Energy Transition which aspires to a holistic green economy with opportunities and jobs benefiting all people and addressing energy security, sustainability and affordability simultaneously.

Biomass Pellets Market Segmentation

Biomass Pellets: Source Outlook

• Industrial Waste & Co-product


• Agriculture Residue


• Food Waste


• Energy Crops


• Virgin Lumber


• Others

Biomass Pellets Type Outlook

• Wood Pellets


• Agri Pellets


• Torrefied Pellets


• Others

Biomass Pellets Application Outlook

• Power Generation


• Industrial Heating


• Residential Heating


• Others

Biomass Pellets Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America