Wood Pellets Market Size, Share, Trends, Industry Analysis Report: By Application (Heat, CHP, and Power), End User, and Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) – Market Forecast, 2025-2034

The global wood pellets market size is expected to reach USD 16.85 billion by 2034, according to a new study by Polaris Market Research. The report “Global Wood Pellets Market Size, Share, Trends, Industry Analysis Report: By Application (Heat, CHP, and Power), End User, and Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) – Market Forecast, 2025 - 2034” gives a detailed insight into current market dynamics and provides analysis on future market growth.

Wood pellets are compacted biomass fuels made primarily from sawdust, wood shavings, and agricultural residues, offering a high-energy, low-emission alternative to fossil fuels. The wood pellets market growth is driven by increasing demand for renewable energy, stringent environmental regulations, and the shift toward carbon-neutral energy solutions. Industrial and residential sectors are accelerating market due to their efficiency in heating and power generation. This growth is further influenced by rising investments in biomass energy infrastructure, technological advancements in pellet production, and government policies promoting sustainable energy sources.

Wood pellets market demand is surging as industries seek cost-effective and eco-friendly alternatives to coal and natural gas. Power plants are increasingly co-firing wood pellets with coal to reduce carbon emissions, which is contributing to market that show a growing share of bioenergy in global energy consumption. Residential adoption is also rising, fueled by government incentives for biomass heating solutions and advancements in pellet stove technologies. The surge in research and development aimed at enhancing pellet combustion efficiency, storage stability, and moisture resistance, drives the market.

The wood pellets market opportunity is expanding with advancements in supply chain optimization, including improved pellet storage, transportation, and distribution networks. Increased production capacities and strategic investments by key industry players are ensuring stability while the international trade of wood pellets continues to rise. The integration of artificial intelligence in pellet quality assessment and automated manufacturing processes is optimizing production efficiency. Sustainability concerns are prompting companies to focus on certified sourcing and carbon offset programs, further aligning with regulatory frameworks. The market is poised for continued acceleration, driven by increasing global emphasis on decarbonization and energy diversification.

Wood Pellets Market Report Highlights

In terms of application, the heating segment accounted for the largest market share in 2024 due to the rising demand for biomass-based heating solutions in residential, commercial, and industrial applications.

Based on end user, the industrial segment dominated the market in 2024 due to the widespread utilization of wood pellets in manufacturing, food processing, and heavy industries for heat and power applications.

In 2024, Europe accounted for the largest wood pellets market share due to stringent carbon reduction policies, high adoption of biomass heating systems, and strong government incentives promoting renewable energy.

The wood pellets market in Asia Pacific is expected to witness the highest CAGR over the forecast period due to rising energy security concerns, increasing investments in renewable power generation, and supportive government policies.

Some of the global key market players are Drax Group Plc; Energex; Enviva LP; Galaxy wood pellet company; Georgia Biomass, LLC; Groupe Savoie Inc.; Hanwha Corporation; Pinnacle Renewable Energy Inc.; SINGPELLET Pte. Ltd.; The Westervelt Company, Inc.; United Company; and Wood Pellet Energy Ltd.

Polaris Market Research has segmented the wood pellets market report based on application, end user, and region:

By Application Outlook (Revenue USD Billion 2020 - 2034)

Heat

CHP

Power

By End User Outlook (Revenue USD Billion 2020 - 2034)

Residential

Commercial

Industrial

By Regional Outlook (Revenue USD Billion 2020 - 2034)

North America

US

Canada

Europe

Germany

France

UK

Italy

Spain

Netherlands

Russia

Rest of Europe

Asia Pacific

China

Japan

India

Malaysia

South Korea

Indonesia

Australia

Rest of Asia Pacific

Middle East & Africa

Saudi Arabia

UAE

Israel

South Africa

Rest of Middle East & Africa

Latin America

Mexico

Brazil

Argentina

Rest of Latin America