Press release
Wood Pellets Market Outlook 2025 to 2035 Growth Insights with Fram Renewable Fuels, German Pellets GmbH, Lignetics, Inc., Graanul Invest, Pinnacle Renewable Energy, Drax Group plc, and Enviva Partners, LP
A new market analysis reveals the global wood pellets market is on a robust growth trajectory, driven by a worldwide push for renewable and low-carbon energy solutions. The market, estimated at $12.1 billion in 2025, is forecasted to soar to $31.3 billion by 2035, demonstrating an impressive Compound Annual Growth Rate (CAGR) of 9.9% over the forecast period. This significant expansion is being fueled by a combination of favorable regulatory landscapes, technological advancements, and increasing adoption across residential, industrial, and utility-scale applications.Wood pellets are gaining prominence as a high-efficiency, sustainable alternative to traditional fossil fuels such as coal and natural gas. Their uniform size, low moisture content, and high energy density make them ideal for a range of applications, from residential pellet stoves to large-scale co-firing operations in power plants. As governments worldwide implement stricter carbon reduction mandates and renewable energy targets, the demand for wood pellets as a decentralized and carbon-neutral heating and power solution is intensifying.
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The residential heating segment is a key driver of this growth, projected to hold a commanding 38% share of global demand in 2025. With a forecast CAGR of 6.1% through 2035, this segment's expansion is attributed to consumers in Europe and North America seeking more stable and eco-friendly heating options in the face of volatile energy prices and rising carbon taxes. Government incentive programs in countries like Austria, Italy, and France are further accelerating the installation of pellet-based heating systems.
From a supply perspective, forest and wood waste resources are set to dominate, accounting for over 68% of the global feedstock share in 2025. This segment's growth, with a forecast CAGR of 6.1%, is underpinned by widespread availability and improved biomass collection logistics, supported by sustainability certifications like FSC and PEFC.
Technological innovation is also a critical factor in market evolution. The development of torrefied wood pellets, which offer higher energy density and improved storage properties, is enhancing the economic viability of the supply chain.
Simultaneously, the adoption of AI-based tools is optimizing logistics, from procurement to distribution, ensuring greater efficiency and reliability for producers like Enviva and Drax.
Competitive Landscape and Strategic Developments
The wood pellets market is becoming increasingly competitive, with key players focusing on strategic expansion and vertical integration to secure feedstock and optimize supply chains.
Recent developments highlight this trend:
• Drax Group, a global leader in sustainable biomass, completed its acquisition of Pinnacle Renewable Energy in April 2025. This move has expanded Drax's production capacity to 4.9 million tonnes annually and reinforces its position to achieve its goal of becoming carbon negative by 2030 through Bioenergy with Carbon Capture and Storage (BECCS).
• Enviva, the world's largest producer of industrial wood pellets, announced the completion of its 11th production plant in Epes, Alabama, in May 2025. This new facility is expected to produce approximately one million metric tons annually and signals the company's renewed growth following a successful financial restructuring.
These strategic moves, coupled with a broader industry-wide focus on certification standards such as ENplus and SBP, are building trust with environmentally conscious buyers and solidifying the market's growth potential.
About the Wood Pellets Market The global wood pellets market comprises the production, distribution, and consumption of densified biomass fuel derived from wood waste and sustainable forestry products. It serves as a vital component of the global transition toward a low-carbon energy economy, providing a renewable fuel source for residential heating, industrial processes, and utility-scale power generation. Key companies in the market include Enviva Inc., Drax Group, Graanul Invest, and Pinnacle Renewable Energy.
Wood Pellets Market Segmentation
By Feedstock:
• Forest and Wood Waste Resources
• Agricultural Residue and Waste
• Food Waste
• Virgin Lumber
• Energy Crops
By End User:
• for Residential/Commercial Heating
• for CHP/District Heating
• for Co-firing
By Region:
• North America
• Latin America
• Western Europe
• Eastern Europe
• East Asia
• South Asia Pacific
• Middle East and Africa
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Explore FMI's related ongoing Coverage in Chemicals & Materials Domain:
Black & Wood Pellets Industry Analysis in Europe: https://www.futuremarketinsights.com/reports/europe-black-and-wood-pellets-market
Wood Coatings Market: https://www.futuremarketinsights.com/reports/global-wood-coatings-market
Wood Plastic Composite (WPC) Floorings Market: https://www.futuremarketinsights.com/reports/wood-plastic-composite-floorings-market
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About Future Market Insights (FMI)
Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.
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