The growth of the wood pellets market is propelled by growing share of biomass in power generation, soaring emphasis on reducing carbon footprint, and escalating need for electricity in developing countries, says this report.
SELBYVILLE, Del., Nov. 16, 2021 /PRNewswire/ -- As per the report by Global Market Insights Inc., the Wood Pellets Market was estimated at USD 8.92 million in 2020 and is projected to surpass a valuation of USD 20 billion by 2027, , registering a CAGR of 15% from 2021 to 2027. The latest research report gives a detailed analysis of market size & estimations, top winning strategies, drivers & opportunities, wavering market trends, competitive scenario, and major investment pockets.
Wood pellets refer to biofuels produced from compressed wood fiber, which are used extensively in industrial as well as domestic applications. They have gained massive popularity as a biofuel that has significant climate benefits compared to fossil fuels. The energy industry is increasingly utilizing wood pellets as an alternative to fossil fuels in order to lower greenhouse gas (GHG) emissions, which is set to positively influence product outlook in the coming years. Moreover, governments across the globe are focusing on establishing facilities for renewable energy generation in light of prevalent concerns pertaining to carbon emissions from the heating industry, which is also speculated to bolster market growth over the forecast period.
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Standard grade wood pellets usually have less than 3% ash content. Notably, this grade of wood pellets has comparatively lower bulk density than premium grade pellets, which limits its application in end-user industries. Owing to low product usage in industrial and residential sectors, the standard grade segment is estimated to register a CAGR of around 13% through the analysis timeline.
Key reasons for wood pellets market growth:
- Increasing product usage in energy generation.
- Rising uptake in residential and industrial sectors.
- Growing prominence in reducing carbon footprint.
2027 forecasts show 'residential' segment retaining its dominance:
In terms of application, the residential segment is expected to be valued at more than USD 10 billion by the end of 2027, registering notable growth through the study timeline driven by increased pellet utilization in small boilers, cooking application, pellet stoves, and so forth. Additionally, mounting consumption of high-quality heating fuel, coupled with concerns regarding carbon emissions, is set to further support segmental growth over the following years.
Asia Pacific to maintain top status in terms of revenue:
The Asia Pacific wood pellets market is slated to exceed a demand of 7.5 million tons by 2027, expanding at a considerable CAGR through the forecast period. Japan and South Korea are touted to be the largest importers in the APAC region on account of rising demand for wood pellets in electricity generation. The regional production of wood pellets is moderately fragmented, with some major countries, such as Indonesia, Malaysia, and Vietnam, among others, accounting for substantial production capacities. Moreover, leading countries in the region are seeking alternatives to decrease their dependency on import to accommodate their domestic demand for electricity, which is likely to augment pellet usage in Asian nations, thereby fostering regional market outlook in the forthcoming years.
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Impact of COVID-19 pandemic on wood pellets market:
The COVID-19 outbreak impacted economies and disrupted the global supply chain, bringing operations to a halt across virtually all industries, including the wood pellets sector. In addition, prominent shortage of skilled labor, high reliance on external policies, and insufficient stakeholder engagement also hindered production in the initial stages of the pandemic. However, with worldwide immunization drives, surging government focus on expediting economic recovery, and increasing significance of the product in energy generation, the global wood pellets market is gradually regaining its pre-COVID growth momentum.
Leading market players:
Key players operating in the global wood pellets industry include Svenska Cellulosa Aktiebolaget, Enviva Partners, Drax Group, Pinnacle Renewable Energy, and Stora Enso, among others.
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SOURCE Global Market Insights Inc.