The biomass pellets market, currently valued at USD 12.3 billion (2025), is likely to reach USD 23.6 billion by 2035, growing at a CAGR of 6.7%. The USA is likely to hold leading market share in the biomass pellets market. China will register the fastest growth in this market between 2025 and 2035, driven by increasing industrial and residential consumption.
The biomass pellets market is primarily driven by rising demand for renewable energy sources, particularly for heating and power generation. This growth will be further fueled by the evolving regulatory environment and an increased emphasis on sustainability.
Regulatory frameworks in regions such as the European Union and East Asia have played a pivotal role by incentivizing the adoption of biomass co-firing and pellet stoves. Carbon trading programs, with their emission caps, have further contributed to market growth by encouraging the use of cleaner energy alternatives.
However, growth is somewhat restrained by challenges in raw material sourcing and fluctuating prices of wood-based feedstocks. Key trends include increasing investments in biomass pellet production technology and the expanding use of pellets in both industrial and residential sectors.
Players in the market are also focusing on enhancing supply chain efficiency and exploring alternative feedstocks to meet growing demand. These developments are expected to improve overall market dynamics, leading to a more robust and sustainable growth trajectory.
| Metric | Value |
|---|---|
| Industry Size (2025E) | USD 12.3 billion |
| Industry Value (2035F) | USD 23.6 billion |
| CAGR (2025 to 2035) | 6.7% |
Looking ahead, the biomass pellets market is expected to continue its growth trajectory between 2025 and 2035, driven by a sustained shift toward renewable energy. Innovations in pellet production technologies and the increasing adoption of biomass-based energy solutions are likely to support this expansion.
Moreover, ongoing regulatory support and a global push for carbon neutrality are expected to further boost demand across regions, particularly in Europe and East Asia. As the market evolves, continued investments in sustainability initiatives are anticipated to ensure long-term growth and resilience.
The market has been analyzed across various segments including product type, end use industry, and region. Under product type, the segments covered include wood pellets, agricultural pellets, industrial pellets, and others. By end use industry, the analysis includes energy, residential, commercial, industrial, and agriculture sectors. Regional coverage spans North America, Latin America, Western Europe, South Asia, East Asia, Eastern Europe, and the Middle East & Africa.
Wood pellets are projected to retain dominance in the industry, contributing the largest share by value over the forecast period. Estimated to account for USD 8.1 billion in 2025, wood pellets are forecasted to reach USD 15.7 billion by 2035, growing at a CAGR of 6.7%. This segment’s sustained growth is underpinned by consistent demand from residential heating applications and policy-backed utility-scale co-firing programs across Europe and East Asia. Their high energy density, uniformity, and compatibility with automated heating systems reinforce their value proposition in both developed and transitioning economies.
Agricultural pellets, comprising compressed residues like husks, straws, and stalks, are expected to scale from USD 1.9 billion in 2025 to USD 3.9 billion by 2035, registering a CAGR of 7.4%. Growth in this segment is driven by feedstock availability in agrarian economies and demand for decentralized energy sources in off-grid rural regions. Adoption remains strong in Latin America and South Asia due to lower raw material costs and basic production requirements.
Industrial pellets, used in energy-intensive processes including CHP (combined heat and power), are forecasted to grow from USD 1.5 billion in 2025 to USD 3.1 billion by 2035, at a CAGR of 7.5%. The segment benefits from rising industrial decarbonization mandates and investment in renewable heating solutions. However, adoption is sensitive to energy price volatility and regulatory compliance costs.
The 'others' segment which includes specialty pellets such as blends with torrefied biomass or waste-derived inputs is expected to increase from USD 0.8 billion in 2025 to USD 1.8 billion in 2035, reflecting a CAGR of 8.4%. Growth is led by innovation and pilot-scale demand, though volumes remain comparatively limited.
| Product Type | CAGR (2025 to 2035) |
|---|---|
| Wood Pellets | 6.7% |
| Agricultural Pellets | 7.4% |
| Industrial Pellets | 7.5% |
| Others | 8.4% |
The residential segment is expected to lead the industry through 2035, driven by policy-supported heating transitions and sustained demand for low-emission fuels. The segment is projected to grow from USD 4.8 billion in 2025 to USD 9.6 billion by 2035, marking a CAGR of 7.2%. Primary drivers include subsidy-backed pellet stove deployment in Europe, energy security policies in South Korea, and growing replacement of oil-based heating in colder regions. Residential demand is also supported by supply chain integration and growing availability of bagged consumer-grade pellets.
The industrial segment, valued at USD 3.2 billion in 2025, is forecasted to reach USD 6.2 billion by 2035 at a CAGR of 6.9%. Demand stems from combined heat and power (CHP) installations and process heat requirements in sectors such as food processing, paper manufacturing, and chemicals. Industrial users are investing in on-site pellet storage and automated feed systems to ensure energy continuity and emission compliance.
The energy segment defined by utility-scale power generation and co-firing is estimated to expand from USD 2.6 billion in 2025 to USD 5.1 billion in 2035, reflecting a CAGR of 7.0%. Although absolute volumes are high, growth is tempered by regulatory uncertainty and competition from wind and solar energy in certain industries. However, Japan, the UK, and South Korea remain core demand centers for co-fired biomass generation.
Commercial applications, including institutional heating (schools, hospitals, municipal buildings), are projected to grow from USD 1.1 billion in 2025 to USD 2.1 billion by 2035 at a CAGR of 6.8%. Moderate growth is observed as adoption is often linked to broader municipal energy reform programs.
The agriculture segment largely driven by farm-based heating and drying operations is projected to grow from USD 0.6 billion in 2025 to USD 1.2 billion in 2035, with a CAGR of 7.1%. Demand is notably concentrated in agrarian economies with surplus biomass residue.
| End Use Industry Segments | CAGR (2025 to 2035) |
|---|---|
| Residential | 7.2% |
| Industrial | 6.9% |
| Energy | 7.0% |
| Commercial | 6.8% |
| Agriculture | 7.1% |
The USA is expected to grow from USD 2.65 billion in 2025 to USD 4.80 billion by 2035, reflecting a CAGR of 6.1%. Three primary drivers define the outlook. First, residential pellet stove installations continue to receive support from state-level clean energy incentives, especially in the Northeast and Pacific Northwest. Second, decarbonization targets for industrial and commercial heating have opened new demand corridors in food processing and municipal buildings. Third, federal bioenergy funding under the Inflation Reduction Act is being directed toward advanced pelletization technologies.
The regulatory environment favors adoption due to Renewable Fuel Standards and the expansion of renewable thermal credits in voluntary carbon markets. Supply-side consolidation has occurred, with major players scaling production in the Midwest and Southeast. Export capacity to Europe remains stable, but domestic demand growth now forms the primary margin lever. Risks are posed by alternative clean heat electrification programs in some states that may divert funding.
| Country | CAGR (2025 to 2035) |
|---|---|
| United States | 6.1% |
Canada is forecasted to expand from USD 810 million in 2025 to USD 1.52 billion by 2035, registering a CAGR of 6.5%. Growth is driven by abundant forestry residues, robust export infrastructure, and strong provincial renewable heat mandates. British Columbia and Alberta lead production, supported by long-term investments in sustainable forestry. Uptake in domestic regions is moderate but growing, particularly in off-grid areas like Quebec and the Northern Territories where diesel replacements are prioritized. Residential adoption is backed by Clean Fuel Regulations mandating reduced carbon intensity.
International trade dominates, with over 70% of output exported to Japan, the UK, and South Korea under long-term contracts. However, a shift toward domestic consumption is emerging due to freight cost volatility and geopolitical risks. In the industrial segment, pulp and paper firms are commissioning new cogeneration units aligned with energy efficiency goals. Regulatory alignment with European standards (ENplus, SBP) has enhanced export competitiveness. Traceability is now a regulatory priority under Canada’s Sustainable Biomass Program.
| Country | CAGR (2025 to 2035) |
|---|---|
| Canada | 6.5% |
Germany is projected to grow from USD 1.28 billion in 2025 to USD 2.26 billion by 2035, at a CAGR of 5.8%. It leads the European biomass pellet market in renewable solid fuel consumption, driven by its energy transition strategy and widespread residential boiler installations. The Renewable Energy Sources Act continues to promote adoption in regions where solar and wind grid integration is complex. Subsidy programs are accelerating the shift from oil heating in both urban and rural zones. Commercial transactions are now subject to mandatory ENplus and DINplus certifications requiring lifecycle carbon tracking and forestry audits.
Imports face strict scrutiny, favoring domestic producers aligned with EU Forest Strategy protocols. Industrial uptake is moderate but poised to grow through municipal initiatives in public infrastructure. Despite rising feedstock costs and policy changes, Germany’s policy stability, mature logistics, and eco-conscious consumer base position it as one of Europe’s most resilient renewable heating regions.
| Country | CAGR (2025 to 2035) |
|---|---|
| Germany | 5.8% |
The UK is projected to rise from USD 950 million in 2025 to USD 1.71 billion by 2035, reflecting a CAGR of 6.0%. Government support through Contracts for Difference (CfD) schemes has positioned the UK as a major importer and consumer of bio-based energy. The Drax Power Station remains the largest buyer, co-firing under strict carbon reporting guidelines. Residential demand has surged under the Boiler Upgrade Scheme, especially in off-grid rural areas.
Domestic production is expanding in Scotland and Northern England to reduce reliance on post-Brexit imports. Supply chains are adapting to tighter traceability rules under Ofgem oversight. Long-term subsidy reductions are anticipated post-2030, with momentum shifting toward high-efficiency decentralized systems. The UK remains structurally favorable for bioenergy investment due to regulatory transparency, consumer awareness, and its well-developed import logistics.
| Country | CAGR (2025 to 2035) |
|---|---|
| United Kingdom | 6% |
France is expected to grow from USD 870 million in 2025 to USD 1.59 billion by 2035, registering a CAGR of 6.2%. Solid biofuels are critical to the Multiannual Energy Plan (PPE), which aims to double the renewable heating share by 2035. Incentives under MaPrimeRénov’ are accelerating conversions from fuel oil in colder regions. Demand is also increasing in the public and commercial sectors, spurred by RE2020 mandates.
France operates more than 50 production sites, though capacity is strained by export flows to Spain and Belgium. Volatility during winter has been flagged by the national Biomass Energy Observatory. Agro-industrial uptake is growing steadily. Mandatory certification under PEFC and SBP ensures sustainability. Monitoring of forest biomass sourcing was tightened in 2024. France remains a top-tier European region, with a well-established supply chain and institutional support driving adoption of renewable heating solutions.
| Country | CAGR (2025 to 2035) |
|---|---|
| France | 6.2% |
Japan is projected to expand from USD 890 million in 2025 to USD 1.68 billion by 2035, with a CAGR of 6.6%. The energy mix is heavily reliant on imported solid biofuels, supported by Feed-in Tariff (FiT) policies. Major independent power producers operate dedicated and co-firing plants under long-term contracts. Residential and commercial sectors remain small, though district heating pilots in northern regions are encouraging diversification.
Japan’s sustainability regulations, overseen by METI, are among the world’s most stringent requiring traceability audits and full supplier disclosure. Import logistics remain a vulnerability, particularly in times of FX volatility. Domestic manufacturing has begun expanding in Kyushu, aiming to reduce exposure to external markets. As Japan deepens its renewable commitments, structured procurement and regulatory certainty will continue to support stable growth.
| Country | CAGR (2025 to 2035) |
|---|---|
| Japan | 6.6% |
South Korea is forecasted to grow from USD 710 million in 2025 to USD 1.37 billion by 2035, with a CAGR of 6.8%. It depends heavily on imports to support its Renewable Energy 3020 target, which positions solid bioenergy as a key base-load source. The Korea Forest Service has streamlined sustainability audits to ensure compliance. KEPCO and other utilities maintain long-term contracts with suppliers from North America and Southeast Asia.
Regulatory reforms now accommodate blended and waste-based fuels under trial frameworks. Domestic manufacturing is still limited, though facilities in Incheon and Busan are scaling up. Institutional heating demand is growing in healthcare and education sectors through municipal grants. Port congestion and FX fluctuations remain key risks, but consistent government direction and offtake guarantees reinforce attractiveness.
| Country | CAGR (2025 to 2035) |
|---|---|
| South Korea | 6.8% |
China is expected to grow from USD 2.45 billion in 2025 to USD 4.70 billion by 2035, achieving a CAGR of 6.7%. The sector benefits from unmatched agricultural and forestry residue volumes. Bioenergy is a pillar of the 14th Five-Year Plan, with specific emphasis on rural district heating. Provincial governments offer subsidies for boiler retrofits in regions like Hebei and Shandong.
The industrial sector leads consumption, with adoption seen in textiles, food processing, and chemicals. CNPC and Sinopec have launched centralized purchase initiatives to formalize the sector. National standard GB/T 33541-2017 governs quality, with upcoming revisions targeting lifecycle emissions. Local infrastructure gaps persist, especially in inter-provincial logistics. Still, China’s scale, feedstock advantage, and coordinated industrial policy make it one of the most influential regions globally.
| Country | CAGR (2025 to 2035) |
|---|---|
| China | 6.7% |
India is projected to grow from USD 1.15 billion in 2025 to USD 2.23 billion by 2035, posting a CAGR of 6.8%. The country's feedstock pool includes paddy straw, bagasse, and coconut husk. MNRE programs are promoting fuel blending in public and private thermal power plants. State-run NTPC has mandated increasing co-firing targets through 2030. Decentralized production is also scaling in Bihar, West Bengal, and Odisha. BIS grading norms are gradually being enforced, though regional inconsistencies persist.
Commercial demand is climbing in food processing and institutional buildings. Transport logistics and seasonal availability challenge reliability, yet government incentives and World Bank-backed rural energy upgrades are unlocking capacity. India’s demographic weight, policy alignment, and agricultural residue surplus ensure strong momentum through 2035.
| Country | CAGR (2025 to 2035) |
|---|---|
| India | 6.8% |
Brazil is projected to grow from USD 760 million in 2025 to USD 1.48 billion by 2035, registering a CAGR of 6.9%. Residues from eucalyptus, sugarcane, and sawdust provide the backbone of the country’s cost-effective feedstock. Under PNE 2050, bioenergy has been elevated as a strategic priority. Decentralized adoption is accelerating in agro-industrial hubs across São Paulo and Minas Gerais. Institutional demand is increasing among schools, cooperatives, and public facilities.
International interest is growing, especially from the EU and Japan, although certification shortfalls hinder full scalability. Brazil’s regulatory bodies through RENOVA-BIO and Selo Verde are tightening controls. Pilot projects are underway in cogeneration and ethanol production. Transportation bottlenecks and weather disruptions pose moderate risk, but low-cost structure and abundant biomass supply secure Brazil’s regional leadership in renewable thermal energy.
| Country | CAGR (2025 to 2035) |
|---|---|
| Brazil | 6.9% |
| Attribute | Details |
|---|---|
| Current Total Market Size (2025) | USD 12.3 billion |
| Projected Market Size (2035) | USD 23.6 billion |
| CAGR (2025 to 2035) | 6.7% |
| Base Year for Estimation | 2024 |
| Historical Period | 2020 to 2024 |
| Projections Period | 2025 to 2035 |
| Report Parameter | Revenue in USD billion |
| By Product Type | Wood Pellets, Agricultural Pellets, Industrial Pellets, and Others |
| By End Use Industry | Energy, Residential, Commercial, Industrial, and Agriculture |
| Regions Covered | North America, Latin America, Western Europe, South Asia, East Asia, Eastern Europe, and Middle East & Africa |
| Countries Covered | United States, Canada, Germany, United Kingdom, France, Japan, South Korea, China, India, Brazil |
| Key Players | Enviva Partners, LP; Drax Group PLC; Rentech, Inc.; Pinnacle Renewable Energy Inc.; Green Circle Bio Energy, LLC; Zilkha Biomass Energy; The Westervelt Company; Biopower Ltd; Babcock & Wilcox Enterprises; Sumitomo Corporation |
| Additional Attributes | Dollar sales by value, market share analysis by region, and country-wise analysis |
The industry is segmented into wood pellets, agricultural pellets, industrial pellets, and others.
Thesector is segmented into energy, residential, commercial, industrial, and agriculture.
Theindustry is categorized into North America, Latin America, Western Europe, South Asia, East Asia, Eastern Europe, and Middle East & Africa.
The global biomass pellets market is projected to reach USD 23.6 billion by 2035, growing at a CAGR of 6.7% from 2025.
Residential heating remains the dominant application due to ease of use, energy efficiency, and low emissions.
Asia Pacific is set to witness the fastest growth, driven by rising energy demand and strong policy support.
Top biomass pellet producers include Enviva, Drax Group, Pinnacle Renewable Energy, and Graanul Invest.
Emission regulations and renewable energy incentives are key factors boosting global biomass pellet adoption.
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Biomass Pellets Market
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