Biomass Pellets Market, by Source (Agricultural residue and waste, Forest and wood waste, Virgin lumber, Food waste, Energy crops, Others) , by Application (Heating, Power generation, Others) : Global Opportunity Analysis and Industry Forecast, 2024 - 2033

Market Dynamics

Renewables are crucial to clean energy transformations. The use of renewables for power generation, heat production for housing and industry, and transportation is an essential component of keeping the average world temperature rise below 1.5°C. Nowadays, modern bioenergy is the world's greatest source of renewable energy, accounting for more than half of worldwide consumption in 2022.

Further, according to Earth.Org, renewable energy accounted for 22% of total U.S. electricity output by 2022. Besides, early projections predict that the worldwide renewable energy industry will be worth two trillion dollars by 2030. In 2022, the U.S. renewable energy industry was estimated at $269 billion. The International Energy Agency (IEA) predicts that by 2025, renewables will be the main source of worldwide power. With U.S. profits from fossil fuels accounting for $138 billion per year, the figure is likely to diminish as renewable energy infrastructure and costs improve, as well as more government is continuously making efforts to reduce dependency on fossil fuels. In addition, India remains committed to meeting its ambitious objective of 500 GW of non-fossil electricity generation by 2030. In April 2023, it announced a plan to auction 50 GW of additional capacity each year to achieve this target. Consequently, growing awareness about climate change and the need to reduce greenhouse gas emissions has led to increased interest in renewable energy sources such as biomass wood pellets. Their carbon-neutral or low-carbon properties compared to fossil fuels make them an attractive option for heating and power generation, thereby bolstering biomass pellets market growth.

However, ?constraints?such?as?the?expensive?extraction?method, ?inferior?product?quality, ?and?high?raw?material?costs?are expected to limit?the?biomass pellets market?growth. Nevertheless. advances in biomass processing and pelletization technology have improved the efficiency and quality of wood pellet production, which is expected to offer lucrative growth opportunities for market growth throughout the forecast period. Advanced pelletization technologies can contribute to the environmental sustainability of wood pellet production by minimizing waste generation, reducing energy consumption, and optimizing resource utilization. Sustainable practices enhance the marketability of wood pellets as eco-friendly energy sources. Besides, advanced biomass processing technologies enable the production of value-added wood pellet products, such as specialized blends for specific applications or pellets with enhanced properties like higher energy content or lower emissions. These value-added products cater to diverse customer needs and preferences, driving market differentiation and growth.

Market Segmentation

The biomass pellets market is segmented into source, application, and region. On the basis of source, the market is categorized into agricultural residue & waste, forest & wood waste, virgin lumber, food waste, energy crops, and others. On the basis of application, the market is classified into heating, power generation, and others. Region-wise the biomass pellets market share is studied across areas such as North America, Europe, Asia-Pacific, and LAMEA.

Regional/Country Market Outlook

The Asia-Pacific biomass pellet industry is expected to be the world's fastest growing region. The growing emphasis on sustainability among consumers and government initiatives towards the use of renewable energy in the region is expected to drive demand for biomass pellets in the region during the forecast period. The abundance of agricultural waste in nations such as India and China enable biomass pellet producers to easily establish manufacturing plants in this region. Rapid urbanization and industrialization, together with attractive government incentives for the use of biomass products, are expected to drive market expansion in the Asia-Pacific region in the coming years.

The Chinese government has implemented various policies and incentives to support the development of the biomass energy sector, including wood pellets. These policies aim to promote the use of biomass resources for heat generation, power generation, and industrial applications. Subsidies, tax incentives, and renewable energy targets have incentivized investment in wood pellet production and utilization. China has witnessed significant investments in wood pellet production facilities, both domestically and through partnerships with international companies. The country's abundant biomass resources, including forestry residues, agricultural residues, and industrial waste, provide a sustainable feedstock base for wood pellet production. As a result, China has become one of the leading producers of wood pellets globally.

Competitive Landscape

Key players in the biomass pellets market include Enviva, Inc. Drax Group plc, Forest Energy Corporation, Energex Corporation, Buhler AG, Sumitomo Corporation, JP Green Fuels, Ecostan Biofuel, Zilkha Biomass Fuels, and Fram Fuels.

Recent Developments

• In April 2022, California Pellet Mill (CPM) introduced Twin Track wood pelleting technology. The novel approach aims to increase the efficiency of wood pellet mills. CPM's unique Twin Track technology was created after a decade of study, with the purpose of lowering energy consumption, assuring constant pellet quality, and increasing mill throughput. Twin Track uses two rollers within the pellet mill, each with its own track. The mechanism is intended to move pellets with a single lengthy, energy-efficient push per die revolution.
• In November 2021, Enviva, Inc. signed a long-term agreement with J-Power, a Tokyo-based utility, to provide substantial amounts of sustainable wood biomass from Enviva's production facilities in the Southeast of the U.S.?to J-Power's coal-fired power plants in Japan. The agreement is intended to create an executable and investable plan under which Enviva will build new infrastructure to produce and deliver up to 5 million metric tons of sustainable wood pellets per year to permanently replace coal in J-Power's existing coal-fired power plants, significantly reducing the utility's greenhouse-gas emissions. The MOU establishes a framework for advancing the position of biomass as a renewable and sustainable energy source, as well as assisting J-Power in meeting its "Blue Mission" objective of being carbon-neutral by 2050.

Key Industry Trends

• The Indian government announced the SAMARTH initiative in February 2022. This initiative is being developed to encourage the use of biomass in coal-fired thermal power facilities. The effort aims to minimize air pollution and prevent stubble burning. The Ministry of Power's policy on "Biomass Utilisation for Power Generation through Co-firing in Coal-based Power Plants" announced in October 2021 requires all thermal power plants in the country to use 5 to 10% biomass in addition to coal for power generation. The policy has started to provide encouraging outcomes. Currently, roughly 59, 000 metric tons (MT) of biomass have been cofired in thermal power plants around the nation, while bids for 12 million metric tons (MMT) are in various stages of development for both short- and long-term durations. Out of this, the biomass co-fired in the NCR region is at 21000 MT, while bids floated in the region total 5.50 MMT.
• In 2024, Leading Japanese companies NYK Line (NYK) , NYK Bulk & Projects Carriers (NBP) , TSUNEISHI SHIPBUILDING Co., Ltd. ("TSUNEISHI SHIPBUILDING") , and British renewable energy company Drax Group (Drax) have signed a new memorandum of understanding (MoU) to develop the world's first biomass-fueled ship (bioship) and the technology that will power it. The firms will perform early research to create the new shipping technology, an on-board biomass fuel plant, which would be necessary to power a bioship, under the terms of the MoU, which was signed at the British Embassy in Tokyo.

Public Policies

• The Biomass Thermal Utilization Act (BTU Act) of 2019 in North America seeks to recognize and promote the environmental and economic benefits of biomass-derived fuels and energy sources. This policy gives a 15% to 30% credit for clean wood heating systems in both residential and commercial uses.
• The Indian Renewable Energy Development Agency (IREDA) offers loans and advantageous subsidies to help further develop biomass power and bagasse cogeneration facilities. These measures are intended to boost the use of biomass pellets.

Key Sources Referred

• Wood Pellet Association of Canada
• Carbon Leadership Forum Community
• European Biomass Industry Association
• Bioenergy Association of New Zealand
• Forest Stewardship Council
• The World Bioenergy Association
• International Renewable Energy Agency

Key Benefits For Stakeholders

• This report provides a quantitative analysis of the biomass pellets market segments, current trends, estimations, and dynamics of the market analysis from 2023 to 2033 to identify the prevailing market opportunities.
• The market research is offered along with information related to key drivers, restraints, and opportunities.
• Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
• In-depth analysis of the biomass pellets market segmentation assists to determine the prevailing market opportunities.
• Major countries in each region are mapped according to their revenue contribution to the global biomass pellets market statistics.
• Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
• The report includes the analysis of the regional as well as global biomass pellets market trends, key players, market segments, application areas, and market growth strategies.