Wood Pellet Market Analysis, Size, Share, Trends, Growth and Outlook Report 2026-2034
Market Overview
The global Wood Pellet Market was valued at USD 14.8 Billion in 2025. It is expected to grow at a CAGR of 5.20% during the forecast period from 2026 to 2034, reaching USD 23.3 Billion by 2034. Europe leads the market, holding over 47.9% share in 2025, driven by government initiatives for renewable energy and carbon emission reduction.
Study Assumption Years
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Base Year: 2025
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Historical Year/Period: 2020-2025
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Forecast Year/Period: 2026-2034
Wood Pellet Market Key Takeaways
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In 2025, the global wood pellet market size was USD 14.8 Billion.
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The market is projected to grow at a CAGR of 5.20% during 2026-2034.
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Europe dominated the market with over 47.9% share in 2025.
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The market growth is fueled by increasing renewable energy demand and stringent carbon emission policies.
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Advancements in pellet production technology and government incentives support market expansion.
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Residential heating is the leading application segment.
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Forest wood and waste is the largest feedstock type segment by market share.
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Market Growth Factors
Demand exists for renewable and green energy. Carbon neutrality regulations exist. Wood pellets appear in industrial and domestic applications. Production technology and capacity experience rapid growth. These factors drive forward the wood pellet market. In October 2024, the Indonesian state-owned coal miner PT Bukit Asam Tbk started a 200 kg/hour biomass pilot plant. The plant is to curb coal use and emissions by co-firing and blended fuels.
Government subsidies, tax credits, and grants are found around the globe to promote bioenergy technology. For example, the US Home Efficiency Rebate program provides incentives in support of biomass heating systems, which in turn increases domestic demand for wood pellets. Stricter emission regulations for fossil fuels, and export demand from Europe, are driving the North American wood pellet market, with US exports totalling 9.5 million metric tons worth US$1.75 billion in 2023.
When people globally realize environmental issues exist, they also drive the market. The UNEP's Emissions Gap Report targets greenhouse gas emission reductions of 42% for 2030 and 57% for 2035 in 2024. The carbon-neutral property in wood pellets and the development of wood-pellet burning technologies with increased energy efficiency and low pollution emissions have proven attractive to environmentally conscious customers, and have helped create a worldwide market.
Market Segmentation
By Feedstock Type:
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Forest Wood and Waste: Largest segment in 2025 with around 33.6% market share, valued for cost-effectiveness and availability. Residues like sawdust and wood chips support sustainable pellet production, aligning with circular economy goals.
By Application:
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Residential Heating: Leading application segment with approximately 58.4% market share in 2025. Wood pellets are preferred for cleaner, efficient heating solutions backed by technological advances, government subsidies, and favorable climate conditions in Europe.
Regional Insights
Europe is the dominant region, holding over 47.9% market share in 2025. Its strict environmental regulations, government incentives, and focus on renewable energy have driven market growth. The EU consumed 24.8 million metric tons of wood pellets in 2022, supported by advanced production and distribution infrastructure. Continued investment in sustainable forestry and biomass projects cements Europe’s leadership position.
Recent Developments & News
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October 2024: BKtech expanded its wood pellet production capacity to meet growing global demand.
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October 2024: Leag (East German energy company) acquired Swedish pellet producer Scandbio AB and subsidiaries, entering the Scandinavian market.
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May 2023: Andritz AG launched new technologies including the world’s first autonomous logyard crane and biomass-specific pellet mill.
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January 2023: Andritz AG partnered with Stora Enso Oyj to upgrade the Oulu pulp and paper mill with biomass power and wood processing solutions.
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November 2021: Lignetics Inc. was acquired by EagleTree Capital’s private equity fund EagleTree Partners V.
Key Players
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Asia Biomass Public Company Limited
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Drax Group
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Enviva LLC
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Fram Fuels
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Groupe Savoie
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I.C.S. (Lacroix) Lumber Inc.
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Lauzon
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Lignetics Group
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Sinclar Group Forest Products
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Stora Enso
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Svenska Cellulosa Aktiebolaget SCA (publ)
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Vermont Wood Pellet Company
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