Wood Pellets Market

How big is Wood Pellets Market in 2026?

The wood pellets market is estimated at USD 12.1 billion in 2025 and is expected to reach USD 13.3 billion in 2026. Demand for wood pellets is projected to grow at a CAGR of 9.9% and reach USD 34.2 billion by 2036.

Wood pellets market share leans toward heat, and residential and commercial heating is expected to lead end use with 38% in 2026. In value terms, from an estimated USD 12.1 billion in 2025, sales of wood pellets are expected to reach USD 13.3 billion in 2026 as winter stocking resumes. Over the forecast period, FMI data indicate a 9.9% CAGR for the decade to 2036, taking the wood pellets market to USD 34.2 billion. Behind this, adoption analysis points to homeowners moving off oil once the fuel bill gap becomes visible. For example, Germany's DEPV put the October 2026 pellet price at EUR 464.61 per tonne, about 45% below heating oil and 21% below natural gas.[1] A gap that wide gives oil-heated houses a direct reason to price a pellet boiler first.

Competition is splitting between export mills on long utility contracts and regional producers selling bagged fuel to households. On the export side, Power Wood Holdings agreed terms in August 2026 for up to CA$84 million to build two black pellet plants in Northern Alberta.[2] Black pellets resist water, so coal stations can store and burn them with few handling changes. Meanwhile, Enviva and Graanul Invest compete for utility tenders on delivered cost per gigajoule and on sustainability paperwork. As a result, mills without port access or certified fibre are the most exposed, as each tender rewards the lowest landed price.

Key Market Trends & Insights

• Residential and commercial heating is expected to lead end use with 38% in 2026, ahead of CHP and district heating near 34% and co-firing at an estimated 28%.
• Forest and wood waste is projected to supply 68% of feedstock in 2026, as sawmill residue remains the cheapest clean fibre. For instance, German producers sourced 93.1% of raw material from sawmill by-products in Q2 2026.[3] Mills tied that closely to sawmill output face fibre shortfalls whenever timber demand slows.
• Industrial and utility grade is likely to hold 54% of grade sales, as power plants and large boilers buy to utility specifications, with premium residential grade (ENplus and DINplus) at an estimated 46%.
• Long-term offtake and utility contracts are projected to hold 62% of 2026 sales by contract type, against 38% for spot and merchant trading, as utilities sign multi-year supply deals before converting a unit.

Regional Highlights

• FMI expects the fastest growth in South Korea, at 10.4%, half a point over the 9.9% global CAGR, as state generators keep buying imported fuel for co-firing.
• The United States follows at 10.2% on export mills, and Germany at 10% as oil-boiler replacement continues. Next come the United Kingdom at 9.7% and Japan at 9.6%. At the lower end, Canada (9.1%) and Benelux (8.9%) close the list.
• Import dependence defines the British market. The United Kingdom is expected to consume 10.35 million metric tons of wood pellets in 2026, with imports of about 10.15 million metric tons, according to a USDA attaché report.[4] Almost all of that fuel arrives by sea, so UK power subsidy decisions move North American and Baltic export volumes directly.

Market Size & Forecast

Table 1: Market Size and Forecast for the Wood Pellets Market (USD billion and percentage), 2025 to 2036

Metric	Value
2025 Market Size	USD 12.1 billion
Estimated Market Size in 2026	USD 13.3 billion
Projected Market Size by 2036	USD 34.2 billion
CAGR, 2026 to 2036	9.9%
Added Revenue, 2026 to 2036	USD 20.9 billion
Market Expansion Multiple	2.6x

Global pellet supply is expanding faster than new utility contracts, which pushes more tonnes toward heating buyers. In volume terms, global pellet production rose 10% to 53.5 million tonnes in 2025, and consumption reached 51.5 million tonnes, Bioenergy Europe reported.[5] Output running 2 million tonnes ahead of use builds stock, which caps spot prices in a mild winter and gives distributors room to negotiate. At the same time, electric heating competes for the same homes, with a 10.2% CAGR forecast for the heat pump market, close to the pellet rate. By 2036 the wood pellets market is expected to be 2.6 times the 2026 size, an increase of about USD 20.9 billion, FMI analysis shows. Even so, subsidy cuts for pellet-fired power are the main downside risk.

Heating Season, Fibre Supply and Utility Contracts

Residential demand is strong enough that producers are building stock earlier in the year. Evidence of this comes from Germany, as German mills produced about 1,034,000 tonnes in Q2 2026, 33,000 tonnes more than a year earlier, and 98.4% of that output carried ENplus A1 certification.[3] Summer stock building at that scale lets distributors fill silos before the first cold snap. Likewise, in the United States, producers made about 950,000 tons of densified biomass fuel in June 2026 and sold about 960,000 tons, EIA data show.[6] Sales running ahead of output in early summer show distributors drawing on mill stock ahead of the heating season.

Policy, more than weather, sets utility demand. For example, panelists at the Wood Pellet Association of Canada conference in September 2026 put the possible long-term loss of pellet demand at 4 to 5 million tonnes, as a UK bridge scheme to 2031 would cut Drax support to 6 TWh.[7] As a result, exporters will seek heating, district energy and new Asian buyers to replace those tonnes.

Table 2: Heating, Supply and Trade Indicators for the Wood Pellets Market (volume, price and investment), 2026

Indicator	Data Point	Relevance	Source
Global pellet production, 2025	53.5 million tonnes; up 10%	Supply base for heating and power	[5]
German pellet output, Q2 2026	About 1,034,000 tonnes; 98.4% ENplus A1	Certified residential supply	[3]
German pellet price, October 2026	EUR 464.61 per tonne; about 45% below heating oil	Fuel switching from oil	[1]
US densified biomass fuel sales, June 2026	About 960,000 tons	North American shipments	[6]
UK pellet consumption, 2026	10.35 million metric tons expected	Largest import market	[4]
Japan pellet imports, February 2026	Up 34%	Asian power demand	[8]
Power Wood Holdings, August 2026	Up to CA$84 million for two black pellet plants	New Canadian capacity	[2]

Analyst Perspective

“Home and district heating will, in my view, carry the larger part of wood pellet growth over the next ten years. Subsidies for pellet-fired electricity are shrinking in the United Kingdom and Japan, and each cut releases export tonnes that European heating distributors and community boilers can absorb, opening a fresh lane for district heat in Canada and Central Europe. Producers with certified fibre and bagging lines close to cold-climate buyers will hold margin as single-contract mills lose volume.”

- Nikhil Kaitwade, Principal Consultant, Future Market Insights.

How is the wood pellets market segmented?

The market is segmented into end user, feedstock, grade, contract type, and region. Residential and commercial heating is expected to lead end use with 38% in 2026, and forest and wood waste leads feedstock with 68%.

By end user: residential and commercial heating, CHP and district heating, and co-firing.

By feedstock: forest and wood waste, agricultural residue and waste, energy crops, virgin lumber, and food waste.

By grade: industrial and utility grade, and premium residential grade (ENplus and DINplus).

By contract type: long-term offtake and utility contracts, and spot and merchant trading.

By region: pellet mills, distributors and power, heat and household buyers in North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia and Pacific, and Middle East and Africa.

Why does residential and commercial heating lead wood pellets sales by end user?

Residential and commercial heating is expected to lead end use with 38% share in 2026, ahead of CHP and district heating at about 34% and co-firing at an estimated 28%.

Table 3: End User Share for the Wood Pellets Market (percentage share), 2026

End User	Estimated Share (2026)
Residential and Commercial Heating	38%
CHP and District Heating	34%
Co-firing	28%
Total	100.0%

Table 4: End User Leadership and Market Growth for the Wood Pellets Market (segment and CAGR percentage), 2026 to 2036

Metric	Value
Global CAGR (2026 to 2036)	9.9%
Leading Segment	Residential and Commercial Heating

Household heating gives pellets the steadiest demand, as stoves and boilers refill every season. Over 6.5 million European households heat with pellets, and residential consumption in Europe rose 5% to 15.3 million tonnes in 2025.[5] That base is why residential and commercial heating is expected to lead with 38% in 2026. By comparison, CHP and district heating, near 34%, buys larger lots for municipal networks and industrial steam. Alongside this, boiler makers supply both groups, and an 8.4% CAGR is projected for the biomass boiler market, adding new burners for pellet fuel in schools, farms and apartment blocks. On the other hand, co-firing, an estimated 28%, is the most policy-driven outlet, as power companies burn pellets only for as long as support schemes cover the cost gap with coal. In practice, households refill every season regardless of power-market rules, which keeps heating ahead of both utility channels.

• Pellet stoves in Italy and France and boilers in Austria, Germany and Poland form the core of heating demand.
• Southern Europe holds the largest installed stove base. Italy has over 2.3 million pellet appliances installed and France about 2 million, mostly stoves.[5] Each installed stove means repeat bagged-fuel orders for retailers through the season.

Why does forest and wood waste lead wood pellets sales by feedstock?

Forest and wood waste is expected to lead feedstock with 68% share in 2026, with agricultural residue and waste near 18% and energy crops at about 8%.

Table 5: Feedstock Share for the Wood Pellets Market (percentage share), 2026

Feedstock	Estimated Share (2026)
Forest and Wood Waste	68%
Agricultural Residue and Waste	18%
Energy Crops	8%
Virgin Lumber	4.5%
Food Waste	1.5%
Total	100.0%

Forest and wood waste is projected to lead feedstock with 68% in 2026, as sawdust and shavings arrive dry and clean from sawmills. Further back, agricultural residue and waste, about 18%, uses straw, husks and stalks, though higher ash limits these pellets to industrial boilers. In addition, energy crops such as willow and miscanthus hold an estimated 8%, held back by land cost and slow harvest cycles. Virgin lumber, about 4.5%, is used mainly when sawmill output falls, and food waste, near 1.5%, stays at pilot scale. Over the forecast period, wider supply of plant fibre will matter for non-wood grades, and the lignocellulosic biomass market is likely to expand at a 7.8% CAGR. Even so, pellet makers will keep sawmill residue as first choice, since ENplus A1 limits on ash favour clean wood.

• Sawdust, planer shavings, chips and thinnings from forest operations make up the bulk of feedstock.
• Central European mills lean almost entirely on sawmill residue. Sawmill by-products supplied 93.1% of German pellet raw material in Q2 2026.[3] That reliance ties German pellet supply to sawmill activity and the construction cycle.

Why does industrial and utility grade lead wood pellets sales by grade?

Industrial and utility grade is likely to lead grade sales with 54% share in 2026, against an estimated 46% for premium residential grade (ENplus and DINplus).

Table 6: Grade Share for the Wood Pellets Market (percentage share), 2026

Grade	Estimated Share (2026)
Industrial and Utility Grade	54%
Premium Residential Grade (ENplus and DINplus)	46%
Total	100.0%

Industrial and utility grade will lead with 54% in 2026, as co-firing units and most CHP plants burn bulk pellets with wider ash and size limits. By comparison, premium residential grade (ENplus and DINplus), about 46%, is sold in bags and blown deliveries to homes, and tighter ash and fines limits protect small stove grates. Power-station imports keep industrial grade volume high. For instance, the United Kingdom alone is expected to import about 10.15 million metric tons in 2026, mostly industrial grade for power stations.[4] A single import outlet of that size keeps bulk shipping and port handling central to industrial grade supply. Premium grade earns a higher price per tonne, so the gap between the two grades is narrower in value than in tonnage. In time, residential grade will gain share as utility contracts end and mills redirect output to certified heating fuel.

• Bulk pellets for power stations, CHP plants and large commercial boilers make up industrial and utility grade.
• Certification is now the norm for heating-grade output. German mills certified 98.4% of Q2 2026 output to ENplus A1.[3] Near-universal certification makes ENplus A1 the entry ticket for mills selling into German retail.

Why do long-term offtake and utility contracts lead wood pellets sales by contract type?

Long-term offtake and utility contracts are projected to lead contract type with 62% share in 2026, ahead of spot and merchant trading at an estimated 38%.

Table 7: Contract Type Share for the Wood Pellets Market (percentage share), 2026

Contract Type	Estimated Share (2026)
Long-term Offtake and Utility Contracts	62%
Spot and Merchant Trading	38%
Total	100.0%

Power stations and new export mills both need volume certainty before committing capital. For that reason, long-term offtake and utility contracts will account for 62% of contract type sales in 2026. These deals cover most co-firing and CHP demand and some large heating distributors. Spot and merchant trading, about 38%, instead serves stove owners, retailers and traders who buy by the season. Asian utility buyers still prefer contracted supply. A case in point is Japan, as Japanese wood pellet imports rose 34% in February 2026, and the average import price fell only 0.3%, Lesprom reported.[8] Steady prices on rising volume point to contracted cargoes, which keeps the long-term share high in Asia.

• Multi-year supply agreements with power generators, CHP operators and large distributors form the contracted channel.
• Contracted volume in the United Kingdom is set to shrink. A UK bridge scheme running to 2031 would cut support for Drax to 6 TWh of generation.[7] Lower supported output would release export tonnes that mills will need to place under new contracts.

What are the drivers, restraints, and opportunities in the wood pellets market?

Cheaper heat than oil keeps households switching to pellets. Shrinking subsidies for pellet-fired power cut contracted export volume, and district heating and greenhouse boilers open new outlets for certified fuel.

• Driver: Homeowners replacing oil boilers compare the delivered fuel cost per unit of heat, and a wide gap in favour of pellets makes the switch easy to justify.
• Restraint: Governments are trimming support for pellet-fired electricity, which leaves export mills with fewer guaranteed utility tonnes.
• Opportunity: Community heating networks, nurseries and public buildings need reliable low-carbon heat, which opens contracts for local pellet supply.

Lower Heat Cost Brings Households to Pellets

Consumer preference for pellets grows fastest in regions with high oil and gas bills. In Germany, for example, DEPV said the German pellet price rose 2.3% in October 2026 after a 6.2% rise in September, and pellets still cost about 45% less than heating oil per unit of heat.[1] Consequently, each heating season with that gap brings another round of boiler replacements, and each new boiler locks in fuel demand for the life of the unit.

Subsidy Cuts Reduce Contracted Power Demand

Producers of utility pellets face fewer long-term buyers. On this point, WPAC panelists said Japanese demand has slowed as Feed-in-Tariff and Feed-in-Premium schemes phase out.[7] Accordingly, FMI data indicate that co-firing carries the most exposure among end users. In response, export mills will shift part of the lost volume to heating customers in Italy and Poland.

District Heat and Greenhouses Open Local Contracts

Adoption of pellet heat in community buildings is growing in Canada. As one example, the Kingsclear Provincial Tree Nursery in New Brunswick burned about 700 tonnes of wood pellets in 2025, replacing about 350,000 litres of furnace oil and cutting the fuel bill by over two-thirds.[9] Over time, utilities and municipalities tendering district energy schemes will become steady buyers for mills close to the network, and a 4.6% CAGR is expected for the combined heat and power (CHP) systems market as plants add heat recovery.

Which country CAGRs are profiled in the wood pellets market?

Table 8: Country CAGR Comparison for the Wood Pellets Market (CAGR percentage), 2026 to 2036

Country	CAGR (2026 to 2036)
South Korea	10.4%
United States	10.2%
Germany	10%
United Kingdom	9.7%
Japan	9.6%
Canada	9.1%
Benelux	8.9%

How do country-level CAGRs compare in the wood pellets market?

Korean generators buy most pellet supply through import tenders for co-firing, and FMI projects South Korea at 10.4%, half a point ahead of the 9.9% global CAGR. The United States follows at 10.2%, supported by southern export mills and northern stove owners. In Europe, Germany is forecast at 10% on boiler sales and domestic sawmill supply. Further down, the United Kingdom, at 9.7%, is expected to burn 10.35 million metric tons in 2026 and faces narrower power subsidies.[4] That combination leaves UK growth tied to how quickly heating buyers replace power-station tonnes. Meanwhile, feed-in support is phasing out in Japan, which grows at 9.6%, under the overall 9.9% CAGR for wood pellets. Next, Canada grows at 9.1% on export mills and local heating. Finally, Benelux is projected to grow slowest of the seven countries, at 8.9%, as large co-firing units run on short support terms.

• State generators in South Korea co-fire imported pellets to meet renewable obligations, so demand arrives in large annual tenders. Exporters that can meet those tenders on delivered price secure multi-year shipping volume.
• Southern US export mills ship to European and Asian utilities, and northern stove owners buy bagged fuel. That split gives American producers a second outlet when one channel weakens.
• Oil boiler replacement in German houses turns each heating season into a fresh wave of pellet customers. Bagged and blown fuel distributors see the steadiest gains from the switch.
• As British power support narrows, the import mix will shift from utility cargoes toward smaller heating lots. Suppliers serving stove and boiler owners carry less exposure than power-station exporters.
• Feed-in contracts in Japan run for fixed terms, which keeps biomass plants buying through the life of each award. Exporters are seeking longer offtakes now, since new volume will slow as those schemes phase out.
• West coast mills in Canada export industrial grade, and eastern provinces are moving public buildings onto pellet heat. Producers with both outlets carry less risk when a single utility contract ends.
• Dutch and Belgian co-firing units run on support with fixed end dates, so pellet burn falls as each term closes. District heating and industrial steam remain the main outlets for suppliers in the region.

Full report country CAGRs cover: seven profiled countries, grouped as South Korea, the United States and Germany growing faster than the 9.9% global rate, the United Kingdom and Japan close behind, Canada and Benelux at the low end, and the remaining standard countries reported region by region.

Country-wise Analysis

South Korea Wood Pellets Market Outlook (2026 to 2036)

Demand for wood pellets in South Korea comes mainly from coal plants operated by state generators and private power producers, which co-fire imported pellets. On that basis, South Korea's 10.4% is the fastest country rate. Buyers there run large annual tenders, and suppliers in Southeast Asia, North America and Russia compete on delivered price. Looking ahead, the length of co-firing support will set the pace after 2030.

Key takeaway: Delivered price decides who supplies Korean co-firing tenders, the fastest-growing outlet among the seven countries.

United States Wood Pellets Market Outlook (2026 to 2036)

US mills are selling roughly the full volume produced, which points to firm demand at home and abroad. US producers made about 950,000 tons of densified biomass fuel in June 2026 and sold about 960,000 tons, according to EIA figures.[6] With little stock building, a cold winter would quickly tighten bagged fuel supply in the Northeast. By region, large mills in the Southeast ship industrial pellets to Europe and Asia, and smaller plants in the Northeast and Great Lakes bag fuel for stoves. On this mix, FMI expects a 10.2% US CAGR.

Key takeaway: Exports and stoves split US demand.

Germany Wood Pellets Market Outlook (2026 to 2036)

German pellet supply is growing on a domestic fibre base. German mills produced about 1,034,000 tonnes in Q2 2026, with 93.1% of raw material from sawmill by-products.[3] That domestic supply and a price well below heating oil support boiler sales. At 10%, Germany is therefore projected to grow just over the global 9.9%.

Key takeaway: A wide price gap to heating oil keeps German households switching to pellet boilers.

United Kingdom Wood Pellets Market Outlook (2026 to 2036)

The United Kingdom is the largest single importer, and power policy decides most of the volume. A USDA attaché report expects the United Kingdom to consume 10.35 million metric tons of pellets in 2026 and import about 10.15 million metric tons.[4] That makes British demand the biggest single swing factor for exporters. Most of that volume feeds power stations, and a bridge scheme to 2031 would cut support for the largest station to 6 TWh.[7] However, heating demand will offset part of the lost power tonnes, and the UK rate is expected at 9.7%.

Key takeaway: UK growth hinges on how fast heating buyers replace lost power-station tonnes.

Japan Wood Pellets Market Outlook (2026 to 2036)

Japanese utilities are still buying more pellets for dedicated biomass plants. Japanese imports of wood pellets rose 34% in February 2026, Lesprom reported.[8] Plants built under feed-in tariffs absorb most of that fuel, so import growth reflects awards made years ago. On the other hand, Canadian exporters report slower Japanese demand as Feed-in-Tariff and Feed-in-Premium schemes phase out.[7] Rising imports today and slower demand later point to a front-loaded decade, and FMI's estimate for Japan is a 9.6% CAGR.

Key takeaway: Feed-in terms set Japanese contract length.

Canada Wood Pellets Market Outlook (2026 to 2036)

Most Canadian pellet output is exported, and new capacity targets coal replacement. In August 2026, Power Wood Holdings agreed terms for up to CA$84 million for two black pellet plants in Northern Alberta.[2] Black pellets open coal stations that cannot handle white pellets, which widens the export customer base. At home, the Kingsclear nursery in New Brunswick switched three boilers to pellets and burned about 700 tonnes in 2025.[9] Conversions of that kind build a domestic heating outlet that can absorb tonnes when export contracts end. Overall, Canada's CAGR is projected at 9.1%.

Key takeaway: Canadian mills are adding coal-replacement and local heating outlets to reduce reliance on one buyer.

Benelux Wood Pellets Market Outlook (2026 to 2036)

Large Dutch and Belgian power plants co-fire imported pellets under support schemes with fixed end dates, and household heating plays a smaller role than in Germany or Italy. In turn, utilities will cut pellet burn as subsidy terms close, so growth in Benelux comes mainly from district heating and industrial steam. The Benelux CAGR is therefore forecast at 8.9%.

Key takeaway: Subsidy end dates cap pellet burn at Benelux power plants, leaving district heat as the growth outlet.

Who are the notable companies in the wood pellets market?

Drax Group, Enviva, Graanul Invest, Vyborgskaya Cellulose, Power Wood Holdings, Lignetics, Fram Renewable Fuels, Energex and Land Energy are the profiled companies.

FMI analysis splits the competitive field into utility exporters that sell under multi-year contracts and regional producers that bag certified fuel for homes. Among utility exporters, Drax Group and other experts expect long-term pellet demand to fall by 4 to 5 million tonnes as UK power support narrows.[7] A fall of that size would push the largest exporters to compete for heating customers. At the same time, Power Wood Holdings is adding black pellet capacity in Alberta.[2] New capacity aimed at coal conversion shows producers targeting a different utility customer. Beyond these, Enviva, Graanul Invest and Vyborgskaya Cellulose supply industrial grades, and Lignetics, Fram Renewable Fuels, Energex and Land Energy serve the heating market.

• Utility exporters: Drax Group, Enviva, Graanul Invest and Vyborgskaya Cellulose.
• New capacity developers: Power Wood Holdings.
• Residential and commercial pellet producers: Lignetics, Fram Renewable Fuels, Energex and Land Energy.

Competitive Benchmarking: Wood Pellets Market

Table 9: Competitive Benchmarking for the Wood Pellets Market (qualitative ratings), 2026

Company	Utility Supply	Heating Fuel	Black Pellets	Recent Activity
Drax Group	High	Low	Low	High
Enviva	High	Low	Low	Low
Graanul Invest	High	Medium	Low	Low
Power Wood Holdings	Medium	Low	High	High
Lignetics	Low	High	Low	Low

Ratings compare the companies on utility supply, heating fuel, black pellets and recent activity.

Key Developments in the Wood Pellets Market

• DEPV put the average German pellet price at EUR 464.61 per tonne for six-tonne deliveries on 16 October 2026, a level that keeps pellets well below heating oil for households weighing a switch.[1]
• On 23 September 2026, WPAC conference panelists warned of a possible long-term loss of 4 to 5 million tonnes of pellet demand; for exporters this means a search for new heating and Asian buyers.[7]
• US producers sold densified biomass fuel near 960,000 tons in June, according to EIA figures released on 23 September 2026, a pace that shows stock being drawn ahead of winter.[6]
• In a report of 24 August 2026, the USDA attaché office put expected UK pellet use for 2026 at 10.35 million metric tons, confirming the country as the largest import outlet.[4]
• Power Wood Holdings agreed funding terms of up to CA$84 million on 10 August 2026 for two planned black pellet plants in Alberta, which signals new supply aimed at coal stations.[2]
• German mills pressed about 1,034,000 tonnes in the April to June quarter, DEPV said on 30 July 2026, giving distributors early stock for the heating season.[3]
• WPAC described in July 2026 the Kingsclear nursery switch from furnace oil to about 700 tonnes of pellets in 2025, an example of public buildings opening local heating contracts.[9]
• On 24 June 2026, Bioenergy Europe put 2025 global pellet output at a new high of 53.5 million tonnes, and supply growth at that pace gives heating buyers more choice of origin.[5]

Key Players in the Wood Pellets Market

Utility Exporters

• Drax Group
• Enviva
• Graanul Invest
• Vyborgskaya Cellulose

New Capacity Developers

• Power Wood Holdings

Residential and Commercial Pellet Producers

• Lignetics
• Fram Renewable Fuels
• Energex
• Land Energy

Wood Pellets Market - Report Scope

Table 10: Report Scope for the Wood Pellets Market (coverage fields and definitions), 2026 to 2036

Coverage field	Report scope
Market breakdown	End user; feedstock; grade; contract type; region
Quantitative units	USD billion
Market definition	Densified biomass fuel pressed from wood and other plant residues into small cylinders, sold in bulk or bags for home heating, commercial and district boilers, combined heat and power plants and coal co-firing.
Regions covered	North America; Latin America; Western Europe; Eastern Europe; East Asia; South Asia and Pacific; Middle East and Africa
Countries covered	United States; Canada; Brazil; Mexico; Argentina; Chile; Germany; France; United Kingdom; Italy; Spain; Benelux; Nordics; Poland; Czech Republic; Romania; Hungary; China; Japan; South Korea; India; ASEAN; Australia and New Zealand; GCC Countries; South Africa; Türkiye; Israel
Key companies profiled	Drax Group, Enviva, Graanul Invest, Vyborgskaya Cellulose, Power Wood Holdings, Lignetics, Fram Renewable Fuels, Energex, Land Energy
Forecast period	2026 to 2036

Wood Pellets Market - Research Methodology

Table 11: Research Methodology for the Wood Pellets Market (research methods and approach), 2026 edition

Method	Approach
Data Sources	Pellet association statistics, government energy data, attaché reports, company announcements and trade publications.
Desk Research	Desk research covers heating fuel prices, mill output, certification, utility policy and new pellet capacity.
Market Sizing and Forecasting	Sizing starts from the 2026 base of USD 13.3 billion and the 9.9% CAGR for 2026 to 2036.
Data Validation	Figures are cross-checked across company, industry and government sources.

Wood Pellets Market by Segments

Wood Pellets Market segmented by End User:

• Residential and Commercial Heating
• CHP and District Heating
• Co-firing

Wood Pellets Market segmented by Feedstock:

• Forest and Wood Waste
• Agricultural Residue and Waste
• Energy Crops
• Virgin Lumber
• Food Waste

Wood Pellets Market segmented by Grade:

• Industrial and Utility Grade
• Premium Residential Grade (ENplus and DINplus)

Wood Pellets Market segmented by Contract Type:

• Long-term Offtake and Utility Contracts
• Spot and Merchant Trading

Wood Pellets Market by Region

• North America
  • United States
  • Canada
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Chile
• Western Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Benelux
  • Nordics
• Eastern Europe
  • Poland
  • Czech Republic
  • Romania
  • Hungary
• East Asia
  • China
  • Japan
  • South Korea
• South Asia and Pacific
  • India
  • ASEAN
  • Australia and New Zealand
• Middle East and Africa
  • GCC Countries
  • South Africa
  • Türkiye
  • Israel

Research Sources and Bibliography

• [1] Deutscher Energieholz- und Pellet-Verband (DEPV). (2026, October 16). Pelletpreis im Oktober steigt weniger stark. https://www.depv.de/presse/d/pelletpreis-im-oktober-steigt-weniger-stark/
• [2] Biomass Magazine. (2026, August 10). Power Wood Holdings agrees to CA$84 million investment into black pellet production plants. https://biomassmagazine.com/articles/power-wood-holdings-agrees-to-ca84-million-investment-into-black-pellet-production-plants
• [3] Deutscher Energieholz- und Pellet-Verband (DEPV). (2026, July 30). Deutsche Pelletproduktion steigt im 2. Quartal 2026 weiter an. https://www.depv.de/presse/d/deutsche-pelletproduktion-steigt-im-2-quartal-2026-weiter-an/
• [4] Krueger, E. (2026, August 24). Report: UK wood pellet consumption expected to expand 4% in 2026. Biomass Magazine. https://biomassmagazine.com/articles/report-uk-wood-pellet-consumption-expected-to-expand-4-in-2026
• [5] Bioenergy Europe. (2026, June 24). Global Pellet Market Hits New High as Europe Weighs Its Clean Heat Options. https://bioenergyeurope.org/global-pellet-market-hits-new-high-as-europe-weighs-its-clean-heat-options/
• [6] Krueger, E. (2026, September 23). EIA: Densified biomass fuel sales at 960,000 tons in June. Biomass Magazine. https://biomassmagazine.com/articles/eia-densified-biomass-fuel-sales-at-960000-tons-in-june
• [7] Wood Pellet Association of Canada. (2026, September 23). WPAC Conference Panel Discusses Emerging Competition and Market Dynamics. https://pellet.org/news/wpac-conference-panel-discusses-emerging-competition-and-market-dynamics/
• [8] Lesprom Network. (2026, March 30). Imports of wood pellets to Japan expand 34% in February. https://www.lesprom.ru/en/news/Imports_of_wood_pellets_to_Japan_expand_34_in_February_122864/
• [9] Levesque, J. (2026, July 17). Reliable, Efficient Bioheat Can Reduce Electrical Grid Pressure. Wood Pellet Association of Canada. https://pellet.org/news/reliable-efficient-bioheat-can-reduce-electrical-grid-pressure/

This bibliography is provided for reader reference. The full report contains the complete reference list and detailed citations.

This Report Answers

• How big is the wood pellets market during 2026?
• What market size is projected by 2036?
• Which end user holds notable share?
• Which feedstock holds notable share?
• Which countries have notable growth?
• Which companies are notable in the market?