According to a new report published by Straits Research, the global Biomass Pellets Market was valued at USD 9.60 billion in 2024 and is projected to grow to USD 16.27 billion by 2033, expanding at a Compound Annual Growth Rate (CAGR) of 6.04% during the forecast period of 2025 to 2033. This steady growth trajectory highlights the rising significance of biomass pellets as a sustainable and renewable energy solution amid growing concerns over climate change, fossil fuel depletion, and carbon emissions.

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What is the Biomass Pellets Market?

The biomass pellets market revolves around the production, distribution, and utilization of compressed organic materials for energy applications. These pellets are typically made from agricultural residues such as rice husks and corn stalks, forestry waste like wood chips and sawdust, industrial byproducts, and dedicated energy crops. When compressed into dense pellet form, these organic materials become a highly efficient and low-emission fuel source suitable for residential heating, industrial boilers, and electricity generation.

Their uniform size, shape, and moisture content make biomass pellets easy to transport, store, and combust. Furthermore, biomass pellets are considered carbon-neutral, as the carbon dioxide (CO₂) released during combustion is offset by the CO₂ absorbed during the plant’s life cycle, contributing positively to global decarbonization goals.

Market Drivers

1. Rising Demand for Renewable Energy:
   Governments and industries worldwide are accelerating the shift from fossil fuels to cleaner, renewable energy sources. Biomass pellets, with their proven environmental and energy benefits, are gaining traction across multiple sectors.
2. Supportive Regulatory Frameworks:
   Policies like the European Union’s Renewable Energy Directive, India’s National Bio-Energy Mission, and carbon credit mechanisms have created favorable conditions for biomass pellet production and use.
3. Cost-Effective Energy Source:
   Compared to other renewable options like solar and wind, biomass requires lower upfront investment for heating and energy generation, especially in rural and industrial settings.
4. Waste-to-Energy Conversion:
   Utilizing agricultural and forestry waste for pellet production aids in waste management while creating additional revenue streams for farmers and industries.

Market Segmentation

By Source:

• Agricultural Residues: Includes rice husks, wheat straw, and corn stover. These materials are readily available in agrarian economies like India, China, and Brazil.
• Forestry Residues: Comprising sawdust, bark, and timber byproducts, this segment is significant in countries with large forestry industries such as Canada and the Nordic nations.
• Wood-based Pellets: One of the most commercially viable and widely traded biomass pellet types globally.
• Energy Crops: Crops like switchgrass and miscanthus, cultivated specifically for energy production.
• Industrial Waste and Co-products: Includes materials like paper mill residues and sugarcane bagasse.
• Others: This includes municipal solid waste and animal manure converted into pellets.

By Type:

• Wood Pellets: Dominating the market due to high calorific value and consistent combustion efficiency.
• Agro Pellets: Gaining ground in developing regions where agricultural waste is abundant.
• Torrefied Pellets: Treated at high temperatures to improve energy density and moisture resistance, suitable for long-distance transport.
• Others: Including mixed biomass and innovative formulations for specialized industrial use.

Regional Insights

Europe: Market Leader in Biomass Pellet Adoption

Europe remains at the forefront of the biomass pellets market, propelled by strong environmental policies, decarbonization goals, and infrastructure investments in renewable energy. Countries such as the United Kingdom, Germany, and Sweden have significantly adopted biomass pellets to phase out coal from power generation and to improve district heating systems.

The European Commission’s commitment to carbon neutrality by 2050 has encouraged governments to adopt subsidies, feed-in tariffs, and incentives for biomass usage, solidifying the region’s dominance in the market.

Asia-Pacific: Fastest Growing Region

Asia-Pacific is emerging as the fastest-growing regional market, particularly driven by countries like India, China, Japan, and South Korea. The region benefits from an abundance of agricultural residues and increasing energy demand. India’s National Bio-Energy Mission and various state-level initiatives promote the use of agro-waste for power and industrial heating, fostering rural economic growth. Meanwhile, China’s biomass initiatives are helping reduce coal dependency, particularly in rural and semi-urban areas.

North America: Rising Opportunities Amid Policy Reforms

North America, especially the United States and Canada, is experiencing a surge in biomass pellet production. The growing use of renewable fuels for heating and electricity, combined with carbon tax policies and government support for sustainable practices, is driving demand. Canada, in particular, is a leading exporter of wood pellets, mainly to Europe and Asia.

Key Players in the Biomass Pellets Market

• Drax Group plc – A UK-based energy company pioneering the large-scale adoption of biomass for electricity.
• Enviva Inc. – A major U.S. player and one of the world’s largest producers of wood pellets.
• Pinnacle Renewable Energy Inc. – Based in Canada, focuses on the production and distribution of wood pellets globally.
• Graanul Invest AS – A leading European manufacturer of premium wood pellets.
• German Pellets GmbH – Known for its high-quality biomass products catering to both industrial and residential consumers.
• Pacific BioEnergy Corporation – A Canadian enterprise involved in sustainable bioenergy solutions.
• Clean Energy Global
• Pacific Green Technologies, Inc.

Frequently Asked Questions (FAQs)

1. What are biomass pellets made from?
Biomass pellets are produced from organic materials such as agricultural residues (e.g., rice husks, wheat straw), forestry waste, wood chips, sawdust, and other plant-based resources.

2. What are the benefits of using biomass pellets?
Biomass pellets provide high energy density, are carbon-neutral, produce low emissions, and serve as a renewable alternative to fossil fuels for heating and electricity generation.

3. What is the growth forecast for the biomass pellets market?
The market is expected to grow from USD 10.17 billion in 2025 to USD 16.27 billion by 2033, at a CAGR of 6.04%.

4. Who are the leading producers of biomass pellets?
Major players include Drax Group, Enviva, Pinnacle Renewable Energy, and Graanul Invest, among others.

5. Which regions are driving market growth?
Europe is the largest market, while Asia-Pacific and North America are witnessing accelerated growth due to favorable regulations and increasing renewable energy demand.

About Straits Research

Straits Research is a premier market intelligence and consulting firm committed to delivering data-driven insights across a wide spectrum of industries. Known for its in-depth research, comprehensive analysis, and actionable strategies, Straits Research supports businesses in making smarter, future-ready decisions. From market sizing and competitive landscape to trends and forecasts, the firm delivers reports that empower clients to navigate complex markets with confidence.