The wood pellet market is one of the most potential markets worth exploiting in 2023. However, how to effectively exploit the wood pellet market depends on many other important factors such as demand. consumer needs, emerging trends and causes affecting the market. Let's find out with AGlobal the article below to answer the above question!
1. Overview of the wood pellet market
According to a report by Grand View Research, the global wood pellet market is forecast to reach a value of 17.33 billion USD by 2027, with a compound annual growth rate (CAGR) of 6.85% in the period 2022-2027.
Vietnam is the second largest pellet exporter in the world, after the United States. From 2013 to 2022, Vietnam's pellet export volume and value have increased significantly. However, in the first half of 2023, Vietnam's pellet exports decreased sharply compared to the same period in 2022.
Korea and Japan are the two largest pellet consumption markets of Vietnam, accounting for over 95% of the total volume of pellets exported from Vietnam to all markets.
Because of its advantages such as helping to reduce carbon emissions, save costs and increase efficiency compared to fossil fuels, wood pellets are a widely used ingredient in manufacturing industries. electricity production, heating, cooking... in European countries, Japan and Korea.
These are all large consumer markets for wood pellets due to policies encouraging the use of renewable energy.
With the increasing demand for wood pellets, this will be a product that brings businesses huge profits when doing business through large e-commerce platforms. For example, Amazon is an e-commerce platform that helps businesses reach many potential customers, while expanding the market and increasing sales.
2. Wood pellet market development trends in 2023
Increasing demand for clean energy production
One of the development trends of wood pellets is increasing demand for renewable energy. Countries around the world are looking for solutions to reduce their dependence on fossil energy sources, such as coal, oil, and gas.
Fossil energy sources are not only at risk of exhaustion, but also cause environmental pollution and climate change.
This is the main reason driving the wood pellet market in clean energy production, especially in the European region. However, the growing adoption and deployment of alternative renewable energy sources such as solar photovoltaics, wind power and geothermal power in different parts of the world is likely to hinder the growth of market during the forecast period.
Diversify raw materials
In addition to traditional wood and agricultural by-products, wood pellet manufacturers have also exploited new sources of raw materials such as seaweed and cotton.
These raw materials have the advantage of being readily available, cheaper and having less negative impact on the environment. However, they also have disadvantages such as unstable quality, high moisture content and may contain pollutants.
Development of production technology
Wood pellet production technology has been improved to increase efficiency, reduce costs and reduce emissions. New equipment such as presses, dryers and packaging machines have been applied to create products of higher quality and meet market requirements.
The technology of using wood pellets has also been upgraded to increase energy conversion efficiency, reduce ash and emissions. New equipment such as stoves, burners and steam turbines have been designed to take full advantage of the benefits of wood pellets.
Increased policy and regulatory support
An important trend is the rise of policies and regulations supporting the use of wood pellets as a renewable energy source. For example, the European Union (EU) has set a target of reducing greenhouse gas emissions by 55% by 2030 compared to 1990 and reaching emissions neutrality by 2050.
To achieve this goal, the EU has encouraged member states to increase the use of biomass energy sources such as wood pellets in industry and electricity. The EU has also issued sustainability standards for biomass products to ensure that they do not harm the environment and biodiversity.
3. Factors affecting wood pellet market demand
Price fluctuations
The price of wood pellets is influenced by factors such as supply, production costs, transportation costs and tariffs. In 2020, due to the impact of the COVID-19 pandemic, the wood pellet market witnessed a sharp decline in prices due to oversupply and lack of raw materials.
However, in 2021, as the epidemic situation was controlled and economic activity restored, wood pellet prices increased again due to increased demand from key markets such as Japan and South Korea. .
The price of wood pellets is also affected by the price of other energy sources such as coal, oil and gas. As the prices of these energy sources increase, the demand for wood pellets also increases and vice versa.
Development of the wood industry
The wood industry is the main source of raw materials for wood pellet production, including wood and agricultural by-products such as sawdust, bark, straw, etc. Vietnam is one of the countries with a strongly developed wood industry, with the export value of wood and forest products reaching 13.17 billion USD in 2020.
The wood industry also generates large amounts of wood waste, estimated at 30-40% of the total amount of raw materials. Therefore, the development of the wood industry will create more supply sources for wood pellet production, helping to reduce raw material costs and increase economic efficiency.
Consumption shift
The wood pellet market is also affected by consumption shifts in related sectors such as home heating, food processing and the paper industry. Consumers tend to choose products and services that have less negative impact on the environment and health, leading to increased demand for wood pellets.
In addition, factors such as reasonable price and high quality are also one of the reasons affecting the demand for wood pellets market.
4. Potential of the wood pellet market
Opportunity:
According to forecasts of the Vietnam Wood and Forest Products Association, Vietnam's pellet market will not change much in the last months of 2023. However, competition for raw material sources for pellet production will continue. harshly, because the export market for wooden products has not yet shown signs of recovery.
Forest Trends experts said that by 2030, demand for pellets in Japan will increase to 20 million tons, of which about 13-15 million tons are wood pellets. This opens up great opportunities for Vietnamese businesses, especially those with stable input material sources and sustainable certificates, large-scale production factories and methodical management.
For Vietnamese businesses, exploiting the wood pellet market through e-commerce platforms has many unbelievable benefits. One of the benefits is that e-commerce platforms own potential customer files from many countries around the world.
Therefore, trading wood pellets on e-commerce platforms will help businesses expand their markets, especially in countries with high demand for wood pellets. At the same time, save costs on product promotion and marketing, as well as reduce risks during the transaction process.
Challenge:
However, in the future, Vietnam's pellet industry will face competition from countries in Southeast Asia, especially Indonesia and Malaysia. Many new factories have been built and many machines are under construction.
However, with the growth of global pellet demand, the pellet production and consumption industry will become increasingly vibrant.
5. Summary of wood pellet market research
The wood pellet market is a potential market for businesses to exploit, promising to bring many profits to businesses. Therefore, businesses need to take advantage of the opportunity to take advantage of the wood pellet market to increase import and export opportunities to other potential foreign markets.
(Source: https://aglobal.vn/blog/phan-tich-thi-truong-vien-nen-go-quy-mo-xu-huong-139741990)
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