Description

The global biomass pellets market size was predicted to grow from USD 15.74 billion in 2025 and reach USD 29.76 billion by 2033, at an 11.7% CAGR during the forecast period, 2025-2033. The biomass pellets market has emerged as a critical component of the global renewable energy transition, offering a low-carbon alternative to fossil fuels in power generation, heating, and industrial applications. Composed of compressed organic materials—typically wood, agricultural residues, and energy crops—biomass pellets are increasingly adopted for their high energy density, ease of storage and transport, and compatibility with existing boiler infrastructure. The global push toward decarbonization, especially in Europe and parts of Asia, has accelerated demand in residential, commercial, and industrial heating sectors. Meanwhile, co-firing in coal power plants presents a scalable transitional solution in developing economies. Technological advancements in pellet manufacturing, such as torrefaction and pellet densification, are improving energy efficiency and combustion properties. Governments and utilities view biomass as a key component of net-zero strategies, particularly for hard-to-electrify sectors. However, sustainability certification, land-use impact, and raw material sourcing remain under scrutiny, shaping future policy and investment decisions.

Market Dynamics

The biomass pellets market is shaped by environmental policy, raw material availability, and evolving energy economics. Key drivers include global climate commitments, renewable energy subsidies, and demand for low-carbon heating in both urban and rural settings. European Union mandates and Renewable Energy Directive (RED II) targets have been especially influential. Restraints stem from sustainability concerns over forest resource exploitation, high transportation costs for low-density feedstocks, and regulatory uncertainties in international pellet trade. Opportunities are expanding in industrial decarbonization, especially in cement, steel, and district heating systems. The integration of agricultural waste (e.g., bagasse, rice husks) offers regional diversification and circular economy potential. Challenges include competition with other bioenergy forms, logistical inefficiencies, and rising scrutiny over the true carbon neutrality of biomass combustion. Lifecycle emissions, certification requirements (e.g., ENplus, SBP), and community opposition to land conversion for biomass production add complexity to market growth, especially in advanced economies.

Impact of Current Geopolitical Factors

Geopolitical dynamics are reshaping the biomass pellets market by influencing trade flows, energy security priorities, and investment patterns. The Russia–Ukraine war, for instance, disrupted natural gas supplies to Europe, intensifying the continent’s reliance on alternative fuels like biomass pellets—especially for district heating. This sudden demand spike exposed vulnerabilities in pellet supply chains and pushed prices upward. Concurrently, rising tensions in the Red Sea and trade bottlenecks through the Suez Canal have complicated pellet exports from Asia to Europe. U.S.–China relations are also affecting the market, particularly as the U.S. becomes a major exporter of industrial wood pellets to Europe and Asia. Moreover, global carbon border tax proposals (e.g., the EU’s CBAM) are influencing how biomass emissions are accounted for, affecting competitiveness. As countries prioritize energy sovereignty and resilience, biomass pellets—particularly those sourced locally—are increasingly positioned as strategic assets in national energy portfolios, though under rising environmental scrutiny.

Scope of the Report

The report outlines the global biomass pellets market study based on source, application, type, and end-use industry.

Based on the source, the biomass pellets market has been segmented into –

• Agricultural Residue
• Wood Sawdust
• Others

Based on the application, the biomass pellets market has been segmented into –

• Feed
• Civil Fuels
• Industrial Fuel
• Others

Based on the type, the biomass pellets market has been segmented into –

• Wood Pellets
• Fuel Pellets

Based on the end-use industry, the biomass pellets market has been segmented into –

• Power Generation
• Industrial Heating
• Commercial & Domestic Heating
• Others

Biomass Pellets Market: Regional Outlook

Europe: The world’s largest consumer of biomass pellets, driven by strong policy support, decarbonization targets, and reliance on pellets for heating and electricity in countries like the UK, Germany, and the Netherlands. Imports dominate, especially from North America.
North America: Major producer and exporter of wood pellets, with the U.S. and Canada supplying Europe and Asia. Domestic consumption is growing slowly, driven by state-level clean energy mandates and rural heating needs.
Asia-Pacific: Rapid demand growth, particularly in South Korea and Japan, where government subsidies for biomass co-firing are strong. China is expanding its pellet infrastructure both for export and domestic heating, though sustainability concerns remain.
Latin America: Emerging producer with significant agricultural residue potential. Brazil, Chile, and Argentina show growth in biomass power and pellet exports. Infrastructure development and policy incentives remain uneven.
Middle East & Africa: Nascent market focused on agricultural waste valorization and rural electrification. Potential growth hinges on technology transfer, investment, and policy alignment with clean energy goals.

Key Global Biomass Pellets Market Competitors Includes –

The global biomass pellets market is highly fragmented, with a large number of small players across the globe. The biomass pellets manufacturers operating in the global market are –

• Drax Biomass Inc.
• Enviva Partners
• German Pellets GmBH
• Pinnacle Renewable Energy Inc.
• Abellon CleanEnergy Limited
• Energex
• Internation WoodFuels, LLC
• Helius Energy Ltd.

The key players in the biomass pellets market are focusing on growth strategies such as expansion, acquisitions, joint ventures, new product lines, and advance technology adaption on a global level to enhance their market share. The report will include an in-depth qualitative and quantitative assessment of the segmental/regional outlook with the market players’ presence in the respective segment and region/country.

Biomass Pellets Market Report Covers Comprehensive Analysis On:

• Market Segmentation & Regional Analysis
• Market Size of 10 years
• Pricing Analysis
• Supply & Demand Analysis
• Product Life Cycle Analysis
• Porter's Five Forces & Value Chain Analysis
• Developed & Emerging Economies Analysis
• PEST Analysis
• Market and Forecast Factor Analysis
• Market Opportunities, Risks, & Trends
• Conclusion & Recommendation
• Regulatory Landscape
• Patent Analysis
• Competition Landscape
• 15+ Company Profiles

Biomass Pellets Market Regional Analysis Includes:

• North America (US, Canada, Mexico)
• South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
• Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
• Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
• The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA

Biomass Pellets Market: Target Audience

• Biomass pellets manufacturers
• Chemical Industries
• Boiler manufacturers
• Renewable energy companies
• Raw material suppliers for biomass companies
• Clean energy research labs – Universities and private institutions
• Trade publications and magazines
• Government authorities, associations, and organizations

Key Issues Addressed

• What is the market size by various segmentation of the biomass pellets by region and their respective countries?
• What are the customer buying behavior, key takeaways, and Porter's 5 forces of the biomass pellets market?
• What are the key opportunities and trends for manufacturers involved in the biomass pellets supply chain?
• What are the fundamental dynamics (drivers, restraints, opportunities, and challenges) of the market?
• What and how regulations, schemes, patents, and policies are impacting the growth of the market?
• What are the upcoming technological solutions influencing market trends? How will existing companies adapt to the new change in technology?
• What will be the impact of cutting-edge technology on the biomass pellets market?
• How has COVID-19 impacted the demand and sales of biomass pellets in the global market? Also, the expected BPS drop or rise count of the market and market expected recovery period.
• Detailed analysis of the competitors and their latest launch, and what are the prominent startups introduced in the target market? Also, detailed company profiling of 25+ leading and prominent companies in the market.