1/ The wood pellets market is expanding
- The global wood pellets market size was estimated at USD 8.91 billion in 2023 and is projected to grow at a CAGR of 6.2% from 2024 to 2030. The demand for wood pellets is expected to witness significant growth as they can replace fossil fuels due to their eco-friendly, sustainable, and carbon-neutral attributes. Wood pellets are used as a substitute for fossil fuels owing to the major advantage of reduced greenhouse gas and carbon dioxide emissions, which majorly contributes to their application in heating, fuel, and power generation
- The harmful effects caused by burning fossil fuels, including greenhouse gas emissions and global warming, have led to the search for new, renewable, and clean alternatives for power generation. Moreover, the combustion of fossil fuels results in the transfer of geological carbon into the atmosphere, which is the primary factor contributing to global warming. Thus, these factors have increased the global demand for these pellets. These pellets are among the major sources of power generation owing to the consideration that they are manufactured using residues or waste from sawmills, wood processing units, and other timber-related industries.
- Raw materials used for manufacturing these pellets include sawdust from sawmills and wood residues from timber processing companies. These materials are obtained at a low cost by the wood pellet manufacturers. In addition, urban wood waste, such as wood chips obtained by recycling residues and disposed of wooden pallets, is considered feedstock for manufacturing wood pellets. These raw materials are procured by manufacturers and transported to the production facilities using trucks.
- Companies involved in manufacturing pellets include Drax Biomass, Georgia Biomass, LLC, Energex, Vermont Wood Pellet Co., Singpellet Pte. Ltd., and Pinnacle Renewable Energy, Inc. Majority of the aforementioned companies have vertically integrated supply chains, wherein they are involved in harvesting raw materials, manufacturing wood pellets, and supplying them to power plants or residential applications.
2/ Market Concentration & Characteristics
- The market growth stage is medium, and the pace is accelerating. The wood pellets market is highly competitive in nature with the presence of several major players. Many manufacturers are integrated across the three stages of the value chain from manufacturing raw materials to distribution of these pellets. Furthermore, companies have vast distribution channels spread across the globe with numerous distribution channels.
- External substitution in the industry is high, as wood briquettes are perfect substitutes for wood pellets, offering high tolerance and involving the usage of a variety of raw materials. Furthermore, the product itself is a substitute for coal and other fossil fuels used in electricity generation in power plants.
- The market is regulated by various bodies, such as the European Standards (EN) and the International Organization for Standardization (ISO), which lay down regulations and standards that govern the production, testing, and application of wood pellets. The bodies define required technical specifications such as moisture content, pellet size, and calorific value.
- Buyers of these pellets include retailers and commercial buyers or importers. The buying power of resellers or retailers is low, as they rely on local suppliers and provide wood pellets for residential applications. Furthermore, the buying power of importers is moderate, as they can negotiate the prices owing to bulk demand.
Note: The information in this article is for reference only and may change depending on the manufacturer and source of raw materials. For the most accurate information, you should consult experts, wood pellet suppliers or contact Overc.vn to answer your questions and problems related to wood pellets and wood chips.
Source:
- Grandviewresearch
- Overc Team synthesise, analyse and write articles.
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OVERC was established in Vietnam, which has 17 FTA (Free Trade Agreement).
Vietnam is one of the countries with the most FTAs in the world.
Our main activities are manufacturing and distributing Wood Pellets and Wood Waste. Our wood pellet products, which are made from Acacia veneer residual 100% or wood waste (logs, sawdust, wood chips, wood shavings,…), have been exported to many countries around the world such as Japan, Korea, EU, etc.
OVERC Co.,Ltd would like to wish you all the best at this time.
For more information on our products, please visit our website at OVERC.VN – Renewable World.