Biomass Pellets Market to Reach USD 23.5 Billion by 2035, Driven by Green Energy Demand Across APAC, Europe, USA, and Saudi Arabia

The global biomass pellets market is valued at USD 12.3 billion in 2025 and is projected to reach USD 23.5 billion by 2035, expanding at a 6.7% CAGR. The market is poised to nearly double in value over the next decade, driven by the rising adoption of renewable heating systems, decarbonization targets, and policy support for sustainable energy transitions across key economies.

Market Summary

Biomass pellets, recognized for their high energy density and carbon-neutral combustion, have emerged as a cornerstone in global renewable energy strategies. The market's upward trajectory is supported by regulatory incentives, government subsidies for biomass heating systems, and the expansion of bioenergy capacity in industrial and utility-scale applications.

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Market Drivers

- Global Energy Transition: National decarbonization agendas and carbon trading frameworks are spurring demand for bio-based heating and power generation solutions.
- Cost Competitiveness: Rising fossil fuel prices are increasing the economic appeal of biomass as a locally sourced, renewable alternative.
- Technological Advancements: Innovations in pelletization and combustion technologies are improving energy efficiency and emission performance, particularly for residential and industrial use.

Market Challenges

Feedstock price volatility and seasonal availability of forestry and agricultural residues continue to challenge production stability. Infrastructure gaps in developing economies and the need for standardized certification systems also constrain large-scale deployment.

Key Trends

- Vertical Integration: Producers are consolidating supply chains to secure feedstock and ensure long-term reliability.
- Alternative Feedstocks: Agricultural residues and waste-derived biomass are gaining prominence as sustainable raw materials.
- Quality Certification: ENplus, SBP, and FSC standards are becoming benchmarks for international trade and sustainability verification.

Segmental Insights

- By Product Type: Wood pellets dominate with 65.9% market share in 2025, driven by consistent combustion quality and established infrastructure.
- By End Use: The residential sector accounts for 39% of demand, supported by heating transitions in cold-climate regions and subsidy-backed retrofit programs. The industrial sector follows, driven by decarbonization mandates for process heat and cogeneration.

Regional Insights

- APAC: China (6.7% CAGR) and India (6.8%) are leading with strong policy support for biomass co-firing and rural energy programs. Japan (6.6%) shows advanced integration in utility-scale power generation, while South Korea accelerates imports under renewable energy mandates.
- Europe: Germany maintains leadership with a 5.8% CAGR, driven by subsidy programs and ENplus-certified heating systems. The U.K. and France continue large-scale biomass power operations, while Nordic nations show strong renewable heating adoption.
- USA: Expanding at a 6.1% CAGR, the U.S. market benefits from state-level renewable incentives and technological advances in pelletization, particularly for residential and co-firing applications.
- Saudi Arabia: Emerging renewable diversification efforts under Vision 2030 are stimulating investment in biomass utilization, pilot heating systems, and agricultural waste-to-energy projects, reflecting growing Middle Eastern interest in sustainable energy models.

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Competitive Landscape

The market remains moderately concentrated. Enviva Inc., Drax Group plc, Pinnacle Renewable Energy, Fram Renewable Fuels, and Graanul Invest collectively hold nearly half of the global share. These leaders differentiate through integrated forestry management, certified production, and long-term supply contracts with utilities.

Market Outlook

Future growth will hinge on expanding certified pellet production, strengthening feedstock logistics, and aligning policy frameworks with carbon neutrality goals. Investments in local manufacturing, sustainable forestry, and advanced heating technologies will define the next phase of market evolution.

By 2035, biomass pellets are expected to play a pivotal role in achieving renewable heating targets across industrial and residential sectors, reducing carbon emissions by up to 80% compared to fossil-based systems and supporting the global transition toward energy resilience and sustainability.

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This release was published on openPR.