The global Wood Pellet Market was valued at USD 14.8 Billion in 2025. It is projected to reach USD 23.3 Billion by 2034, growing at a CAGR of 5.20% during the forecast period of 2026-2034. Europe led the market in 2025, holding over 47.9% share, driven by renewable energy demand, biomass power generation, and government initiatives promoting carbon emission reductions.
Study Assumption Years
Base Year: 2025
Historical Year/Period: 2020-2025
Forecast Year/Period: 2026-2034
Wood Pellet Market Key Takeaways
The global wood pellet market size was USD 14.8 Billion in 2025.
The market is expected to grow at a CAGR of 5.20% during 2026-2034.
Forecast period for the market is 2026-2034.
Europe dominated the market in 2025 with over 47.9% share due to strong renewable energy policies.
Increasing biomass power generation and growing applications in residential and industrial sectors are key growth drivers.
Government incentives like subsidies and tax benefits boost adoption.
Rising environmental awareness and carbon neutrality policies are fueling demand.
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Market Growth Factors
The reverse logistics market is driven by the e-commerce industry as it has increased the volume of returns. Easy return policy of e-retailers requires the retailers to invest in reverse logistics to process their returns and undertake further remanufacturing, repairing, and reselling. Government regulations and environmental concerns also create a need for organizations to adopt reverse logistics methods to reduce waste and comply with regulations, thus, fueling the market growth.
Technologies such as blockchain, Internet of Things (IoT), AI and ML can help improve transparency and predictive analytics in reverse supply chain management. These technologies can improve data visibility, help in the optimization of the returns process, improve customer experience, streamline reverse supply chain processes, and reduce costs associated with reverse supply chains.
Sustainability and corporate social responsibility are other factors, as reverse logistics entails recycling, waste management, and extending the lifecycle of products. Companies are driven to adopt green practices due to pressure from consumers to become better at sustainable packaging, service, and disposal. This increases their competitiveness and attractiveness to consumers.
Market Segmentation
Analysis by Feedstock Type:
Forest Wood and Waste: Largest segment with around 33.6% market share in 2025. Dominates due to availability and cost-effectiveness. Includes residues like sawdust, wood chips, and tree trimmings serving as sustainable inputs. Vietnam exported 2.6 million tons in 2024 valued at $345.5 million, a 25.9% volume increase.
Analysis by Application:
Residential Heating: Leading application with around 58.4% share in 2025. Driven by cleaner and sustainable fuel aspirations, wood pellets replace traditional fossil fuels conveniently. Increased residential consumption in European countries like Germany and the Netherlands contributed to record EU consumption of 23.1 million metric tons in 2021. Advancements in stove technology, distribution networks, and government incentives support growth.
Regional Insights
Europe is the dominant region, holding over 47.9% market share in 2025. Driven by strict environmental regulations, government incentives, and integrated renewable energy policies, wood pellets are widely used for heating and power generation. In 2022, the EU consumed 24.8 million metric tons of wood pellets, supported by advanced infrastructure and sustainable forestry investments that sustain Europe’s leadership globally.
Recent Developments & News
October 2024: BKtech expanded wood pellet production capacity to meet rising global demand for sustainable energy.
October 2024: Leag signed an agreement to acquire Swedish producer Scandbio AB, expanding into the Scandinavian market and enhancing biomass production footprint.
May 2023: Andritz AG introduced innovations including the world's first autonomous logyard crane and the ANDRITZ PM30-6 pellet mill designed for biomass.
January 2023: Andritz AG partnered with Stora Enso Oyj to upgrade the Oulu pulp and paper mill in Finland with biomass power solutions.
November 2021: Lignetics Inc. was acquired by EagleTree Capital via EagleTree Partners V private equity fund.
Key Players
Asia Biomass Public Company Limited
Drax Group
Enviva LLC
Fram Fuels
Groupe Savoie
I.C.S. (Lacroix) Lumber Inc.
Lauzon
Lignetics Group
Sinclar Group Forest Products
Stora Enso
Svenska Cellulosa Aktiebolaget SCA (publ)
Vermont Wood Pellet Company
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