Market Overview
In 2024, the worldwide biomass pellet industry size stood at USD 11.9 billion, and the market is also estimated to advance at a CAGR of 6.7% over the projection period. The developing awareness regarding advantages of using biofuels and other renewable power sources for commercial, residential and industrial heating and power production applications among consumers is a key reason propelling the development of the industry.
Further, the government initiatives to promote renewable power sources, growing need for low-carbon fuel, and easy obtainability of raw materials bolster the demand for biomass pellets.
Biomass pellets are emerging as a dependable energy source due to their renewable nature, carbon-neutral characteristics, and easy availability. Governments worldwide are implementing various initiatives to promote the use of biomass energy, including biomass pellets.
Given the advantages associated with biomass, such pellets hold significant potential as a substantial energy resource. The widespread availability, renewable status, and carbon neutrality of biomass pellets are particularly noteworthy factors driving their adoption.
The increasing demand for renewable energy sources stems from dwindling fossil fuel reserves and heightened awareness of the detrimental environmental impacts associated with fossil fuel-based products and processes.
Moreover, there is a growing imperative for sustainable energy solutions, which is expected to boost the market for biomass pellets. Renewable energy sources and technologies are generally perceived as environmentally friendly alternatives due to their minimal environmental impact compared to conventional options.
Key Insights
- Wood sawdust holds the largest market share in 2024, at 30%, primarily due to its affordability and usefulness as a raw material for producing low-moisture solid fuel pellets.
- Biomass pellets made from wood sawdust are gaining traction as a cost-effective and profitable renewable energy source, offering a solution to increasing pollution concerns.
- The residential heating application segment accounted for the largest revenue share, 40%, in 2024, driven by government incentives favoring efficient technologies like pellet stoves over coal for reducing domestic emissions.
- The commercial heating category is expected to grow the fastest, with a projected growth rate of 7.2% over the forecast period, fueled by increasing adoption of biomass pellets in office buildings, government facilities, and educational institutions.
- Europe dominates the biomass pellet market with a market share of approximately 45% in 2024 and is projected to grow at a significant CAGR.
- The Asia-Pacific (APAC) region is forecasted to grow at the highest rate (7.0% CAGR) during the forecast period, driven by rapid expansion in renewable energy industries in countries like China, Japan, and India.
Source: P&S Intelligence
