Renewable Energy Policies and Increasing Demand for Bioenergy are factors driving the Global Residential Wood Pellets Market in the forecast period 2025-2029.
According to TechSci Research report, “Residential Wood Pellets Market – Global Industry Size, Share, Trends, Opportunity, and Forecast 2019-2029”, the Global Residential Wood Pellets Market is expected to register robust growth during the forecast period. The primary drivers for the market include increasing demand for Residential Wood Pellets in clean energy generation, especially in the European region. However, the adoption and increasing deployment of alternative renewable energy sources such as solar photovoltaic, wind energy, and geothermal in various parts of the world is likely to hinder the market growth during the forecast period. The heating application held a significant market share in 2021, and it is likely to dominate the market during the forecast period.
As per the World Bioenergy Association, Residential Wood Pellets have the potential to replace coal in power generation facilities. With technology development in recent years, Residential Wood Pellets have undergone some thermal upgrading through various processes like torrefaction, hydrothermal carbonization, and steam explosion. The thermal upgrading enables Residential Wood Pellets to act as a fuel with coal properties. The Asia-Pacific region with the highest number of coal power plants in the world is expected to be an opportunity for the market to grow in the near future. With a significant production of Residential Wood Pellets during 2021, Europe is expected to dominate the market during the forecast period.
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Based on Application, The Heating segment emerged as the dominating segment in 2023. Pellets are a solid biomass fuel, primarily produced from wood residues and agricultural by-products like straw. Specific advantages of pellets as compared to unprocessed biomass include standardized properties, high energy content, and high density. Residential Wood Pellets for heating applications are primarily used in residential and commercial sectors for food, cooking and grilling, and supplying heat to homes. Since the cost of pellets remained cheaper than that of other fuels for a long time, it has become a more economical option, addressing the primary concern of the residential and commercial sectors. In addition to this, in 2020, the wood pellets, due to oversupply, experienced a sharp decline in their prices.
As a renewable energy source, Residential Wood Pellets have received subsidies and incentives from the governments in many countries, and many countries either launched or updated their policies and schemes related to Residential Wood Pellets for heating applications in recent years. For instance, in January 2021, a new Wood and Pellet Heater Investment Tax Credit (ITC) came into effect in the United States, under which consumers buying highly efficient wood, pellet stoves, or larger residential biomass heating systems can claim a 26% tax credit that is uncapped and based on the full cost (purchase and installation) of the unit.
On a similar note, from April 2021, the United Kingdom amended its Domestic Renewable Heat Incentive (Domestic RHI) of 2014 to aim at promoting the use of renewable heat at residential levels. Within the amendment, the Department for Business, Energy & Industrial Strategy (BEIS) announced the relaxation of the requirement for accreditation applications to be submitted within twelve months of the eligible heating system’s commissioning date. In addition, the participants whose heating system was commissioned on or after March 1, 2019, became eligible to apply for the Domestic RHI until the scheme closes to the new applications on March 31, 2022. Therefore, owing to the above points, the heating application is expected to dominate the wood pellet during the forecast period.
Based on Region, Europe is projected to dominate the market throughout the forecast period. In Europe, the demand for Residential Wood Pellets is expected to increase by 30-40% between 2021 and 2026. Europe represents more than 50% of global pellet demand. As of 2020, European nations’ use of pellets includes residential heating (40%), power plants (36%), commercial heating (14%), and combined heat and power plants (10%).
Moreover, pellets have also made their way into coal conversion projects in local authority or public administration buildings such as schools and offices. As of 2020, most of the co-firing power stations have either closed or converted since these early projects, with several making a move to 100% Residential Wood Pellets for fuel. The largest of these is Drax Power Station in North Yorkshire, which has converted four of its six 65 MWe generating units to run exclusively on biomass and is currently evaluating options for its remaining two coal-fired units.
As of 2020, sawmill residues make up 85% of the mix for wood pellet production, followed by roundwood (13%) and recovered wood (2%). Although the wood residues are likely to remain an important feedstock, especially in northern and western Europe, they will not be sufficient to meet the future fiber demand from the growing wood pellet sector. Further, technological advancements in the market in the region are also likely to increase the demand for Residential Wood Pellets during the studied period.
Key market players in the Global Residential Wood Pellets Market are: –
- Enviva LP
- Drax Group plc
- Graanul Invest AS
- Pinnacle Renewable Energy Group Inc.
- Energex American, Inc.
- German Pellets GmbH
- Westervelt Company
- Lignetics, Inc.
- TANAC S.A.
- Rentech, Inc
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“The global Residential Wood Pellets market is propelled by several key drivers. Firstly, renewable energy policies worldwide are fostering the adoption of Residential Wood Pellets as a sustainable biomass fuel, aligning with global efforts to reduce carbon emissions. The increasing demand for bioenergy, driven by environmental awareness and a desire to transition away from fossil fuels, further amplifies the market’s growth. Government incentives, subsidies, and tax benefits incentivize businesses and consumers to invest in wood pellet technologies.
Additionally, technological advancements in pelletization processes enhance production efficiency. The market is also buoyed by consumer awareness of the environmental benefits of Residential Wood Pellets and the global push for a green energy transition, emphasizing the role of Residential Wood Pellets in achieving renewable energy targets.” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.
“Residential Wood Pellets Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Feedstock (Forest Waste, Agricultural Waste, and Others), By Application (Heating, Combined Heat & Power (CHP), and Power Generation), By Region, and By Competition 2019-2029” provides statistics & information on market size, structure, and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in Global Residential Wood Pellets Market.
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