Heat segment is expected to witness highest growth during forecast period
The heat segment is expected to grow at a highest CAGR during the projected period, which is mainly driven by significant rise in the popularity of biomass boilers as a heating solution for both residential and commercial properties, as these boilers can burn wood pellets to generate heat, while providing a renewable and cost-effective alternative to traditional heating systems. It is being considered as a carbon-neutral source of energy, which makes them an attractive option for consumers and businesses who are looking to reduce their carbon footprint and adopt sustainable solutions, thereby propelling the segment market growth at rapid pace.
The power segment led the industry market with significant revenue share in 2022, mainly due to the growing efforts by major government authorities to promote the use of biomass power generation to meet the rising need, as a result of growth in industrialization, urbanization, and population growth across the globe. In addition, the cost-effectiveness of the product than other forms of renewable energy such as solar or wind power and can be produced from waste wood, sawdust, and other by-products of the timber industry, which further reduces their cost compared to fossil fuels, are few other factors boosting the product adoption among consumers.
Residential and commercial segment accounted for the largest market share in 2022
The residential and commercial segment accounted for more than major global market share in 2022, and is likely to retain its market position throughout the forecast period. The growth of the segment market can be mainly attributed to growing prevalence of wood pellets among houseowners due to numerous attributes including sustainability, cleansing, and greenness among others. Furthermore, the wood pellets are easily available and often more affordable than other forms of renewable energy such as solar panels or wind turbines, which led to increased number of consumers opting for the product especially who want to reduce their dependence on fossil fuels and save money on their energy bills, which in turn, has significantly propelled the growth of the segment market in the recent years.
The industrial segment is projected to exhibit significant growth rate over the coming years, which can be highly attributable to increased number of governments around the world providing incentives and subsidies to encourage the business towards the use of renewable energy sources including wood pellets. These incentives can include tax credits, grants, and other financial incentives that make wood pellets more attractive to industries as a fuel source while maintaining the sustainability.
Europe region dominated the global market in 2022
The Europe region dominated the global market for wood pellet with significant market share in 2022, and is projected to maintain its dominance throughout the forecast period. The growing consumption of the product for power generation across the region and various types of subsidies provided by government sources of energy along with the widespread adoption of power boilers are the primary factors spurring the demand for the product. Beside this, several European countries are taking measures for spreading the awareness pertaining to the adoption and utilization of wood pellets. For example, The United Kingdom amended their Domestic Renewable Heat Incentive to promote the use of renewable heat at residential levels.
The Asia Pacific region is projected to witness noteworthy growth with a healthy CAGR during the projected period. The presence of favorable government policies to boost up the use of wood pellets and rise in the number of power plants especially in countries like South Korea, Japan, China, and Malaysia coupled with the growing penetration among countries towards aggressively subsiding their biomass sector, which is hindering the adoption of other available renewable sources, has been propelling the growth of the market.
Competitive Insight
Some of the major players operating in the global market include German Pellets, Pinnacle Renewable Energy, Enviva LP, Wood & Sons, Drax Group, Stora Enso, Svenska Cellulosa, Brookridge Group, Wood Pellet Energy, Vermont Wood Pellet, Farm Fuels, Sinclar Group Forest Products, Graanul Invest, Energex, Lauzon, United Company, Highland Pellets, Groupe Savoie, and I.C.S. Lumber.
Recent Developments
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In April 2022, Drax, new pellet manufacturing facility at the Alabama, that will be the company’s second pellet production facility in the state and will produce approx. 360,000 tns of sustainable pellets each year.
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In November 2021, NXR TRADE India, signed new agreement to deploy “Biomass Pellet Installation” from the “CPM Global Biomass”. This biomass pellet mill has a capacity of 2 tonnages/hour, that is the first professional pellet in Jammu & Kashmir territory, and the start of the product in the region.
Wood Pellet Market Report Scope
