ALBANY, NY - The production of wood pellets has seen a spike in recent years, thanks to their attributes such as high energy density and ease of production/supply. These qualities of wood pellets have gained significance in the backdrop of tighter emission control norms. Based on these trends, it is expected that the global wood pellets market will rise at a remarkable 14.1% CAGR between 2015 and 2023, by which year the market is expected to touch a value of US$20 billion.
Governments and environmental regulation agencies have stressed on the use of wood pellets as a means to cut back on the high degree of dependence on fossil fuel, especially coal.
Transparency Market Research has released a new market research report titled Wood Pellets Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2015 - 2023. According to the report, the global wood pellets market was valued at $6.26 billion in 2014 ,and is anticipated to reach $20 million by 2023, expanding at a CAGR of 14.1% between 2015 and 2023.
Wood pellets production has increased substantially in the past few years, owing to the stringent emission norms in Europe and North America. High energy density and easy availability are some of the advantages of wood pellets that facilitate their international trade. Efforts to increase the use of renewable technologies for both heat and power generation are expected to provide a major boost to the wood pellets market. Government support in countries such as the U.K., Sweden, China, and South Korea is expected to foster additional growth in the wood pellets market.
Efforts by wood pellets manufacturing companies and public institutions to remove existing growth barriers are expected to be scaled up in the near future. This would induce substantial growth in the wood pellets market in certain regions such as Europe. Furthermore, targets set by the European member states to reduce carbon emissions and build a low carbon economy are anticipated to augment the wood pellets market in Europe. Use of wood pellets as an energy source can provide numerous energy, economic, employment, and environmental benefits.
The heating application segment dominated the wood pellets market in 2014 and will contintue to do so during the forecast period. The wood pellets market is established successfully, owing to the various incentives, such as feed-in tariffs, renewable portfolio standards, capital grants, and green certificate trading, provided for biomass-fired heat and power generation. According to current estimates, heating was the largest application segment of the wood pellets market, accounting for nearly 70% share in 2014.
Key participants in the global wood pellets market include Andritz AG, Drax Group plc, Enito Singpellet Pte Ltd, Enviva LP, F.E. Wood & Sons, German Pellets GmbH, Georgia Biomass, LLC, Allance Pellet Machinery, The Westervelt Company, Pinnacle Renewable Energy Group, Rentech, Inc., Energex, and Wood Pellet Energy (UK) LTD. The report provides an overview of these companies, followed by their financial revenues, business strategies, and recent developments.
The production of wood pellets has seen a spike in recent years, thanks to their attributes such as high energy density and ease of production/supply. These qualities of wood pellets have gained significance in the backdrop of tighter emission control norms. Based on these trends, it is expected that the global wood pellets market will rise at a remarkable 14.1% CAGR between 2015 and 2023, by which year the market is expected to touch a value of US$20,073.1 million. Governments and environmental regulation agencies have stressed on the use of wood pellets as a means to cut back on the high degree of dependence on fossil fuel, especially coal.
Thus, it is easy to see why nearly every stakeholder across the value chain of the global wood pellet market will benefit from the impending boom in the market.
Canada and U.S. Top Global Wood Pellet Exports
As things stood in 2014, Canada and the United States were the largest wood pellet exporters in the world. In both these countries, wood pellet production has been encouraged because of two key reasons:
Wood pellets are regarded as a sustainable alternative to fossil fuels, helping them gain the stamp of approval from regulatory agencies. Because wood pellets are an affordable, carbon-neutral and easily-available biofuel, several industries have been quick to adopt them. They are made from raw material that would otherwise find little use in other applications. From bark to saw dust to wood shavings, a variety of superfluous materials go into the production of wood pellets.
Regional Subsidies Provide an Impetus to Global Wood Pellet Market
As wood pellets are widely regarded as a carbon-neutral fuel and energy source, environmental agencies are formulating policies that encourage the use of pellet fuel. Subsidies have been the most effective way to attract the attention of industrial players and prompt them to replace fossil fuel with wood pellets. This has caused the demand for wood pellets to swing upward – it will continue to show this upward trend for the next few years, expect market analysts.
Europe, which is a region that lays great emphasis on green industrial policies, was the largest wood pellet market in the world as of 2014. The United Kingdom, with a slew of initiatives encouraging the uptake of wood pellets, was the largest wood pellet market within Europe. Germany is yet another large market for wood pellets – the country produced an estimated 980,000 tons of the fuel source in 2015 (H1), says IHB, a network for professionals in the German timber market. Likewise, stringent emission norms enforced in most states in the United States create a conducive environment for the growth of the wood pellet market here.
Demand for Wood Pellets in Heating Applications to Remain Highest
The use of pellet fuel is primarily seen in power generation and in heating applications. Market analysts expect that heating, which was the predominant application of wood pellets in 2014, will remain the largest in the global market until early next decade. Existing and anticipated incentive packages will continue to fuel the growth of the global wood pellets market; however, the key drawback that the global market will have to contend with is the release of flue gases during the storage their storage.
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