Wood Pellets Market

Wood Pellets Market Technology, Future Trends, Opportunities, Growth Factors, Demand, and Trends

Canadian Companies Ensure Supply for Rail Networks amid COVID-19

Modifying shift schedules to reduce employee contact and suspension on international trade are among the many strategies adopted by companies in the global wood pellets market amid COVID-19 pandemic. This has affected business in Japan, since Canada accounts for more than 50% of the country’s supply for wood pellets. As such, alternate revenue streams such as critical industries, including forest products, utilities, and energy are keeping economies running during the pandemic.

Majority of wood pellets is utilized in two markets. Firstly, in the power sector, wherein wood pellets are used for co-firing with fossil fuels such as coal in large boilers and power plants. Secondly, in the heating segment, wherein wood pellets are utilized in stoves. These factors are estimated to propel the global wood pellet market at a rapid pace during the forecast period.

Wood Pellets Market: Dynamics

Quality norms, such as low ash content and high ash melting point are essential for an uninterrupted utilization of wood heating systems. Consequently, the Solid Biofuel Technical Committee (SBTC) in Europe founded quality standards for wood pellets, namely EN14961-2 solid biofuels. This European standard has been implemented in various countries such as Austria, Germany, Italy, Spain, and Switzerland, by ENplus.

Kyoto Protocol, established under the United Nations Framework Convention on Climate Change (UNFCCC), in 1997, was the first major climate change agreement to minimize greenhouse gas (GHG) emissions. The emergence of these agreements is expected to stipulate the reduction of global emissions and hold the surge in the global temperature below 2°C. In the U.S., two major climate change bills have been introduced by the legislative branch– the American Clean Energy and Security Act and the American Power Act.

These agreements are expected to generate interest in renewable energy and substantially increase the utilization of wood pellets for power and heat generation. Tradable Renewable Energy Certificates (TRECs), established in the U.K., has been the main support scheme driving conversion of coal-fired power plants into wood pellets-fired ones. Under this program, green certificates are issued by the regulatory authority to industries based on the amount and type of renewable-based power generation. Subsequently, power distributors purchase green certificates from industries in order to cater to the power generation requirement from renewable sources. Power distributors pay a penalty in case of failure to supply their customers with necessary amount of power generated through renewable sources.

These practices help eliminate carbon dioxide emissions and create lucrative opportunities for the utilization of renewable energy sources such as wood pellets. Biomass Crop Assistance Program (BCAP) is a prominent federal program that offers incentives to wood pellet producers. Grants and payments are provided a cover of up to 75% of construction costs to biomass producers and US$ 45 per ton to suppliers. Renewable tax credit and investment tax credits are also provided for qualified installations and projects. These government incentives are projected to boost the global wood pellet market during the forecast period.

Wood Pellets Market: Prominent Regions

The wood pellets market in Asia Pacific is projected to expand during the forecast period. As per the International Energy Agency, in 2019, 20 co-firing plants were operating in Japan, most of these plants had a relatively small capacity (below 112 GW) and energy generated by co-firing (using renewable energy source) was only 10% of the total capacity. Up to 2030, Japan set the target to generate 5 GW of power by using biomass as the energy source, including 4 GW of power would be completely generated by wood-fired power plants. Several new smaller-scale coal-fired power plants in Japan are estimated to shift to dedicated biomass plants by 2030.

The wood pellets market in North America is projected to expand considerably during the forecast period. The U.S. Congress includes modern wood heating incentives in massive clean energy package. Modern wood heating incentives consist of providing “modern wood heating installation tax credit” to households that have installed home heating and hot water systems that utilize wood pellets, wood chips, and cordwood at efficiencies greater than 75% higher heat value (it means more than 75% fuel consumed in home heating & water heating should be derived from biomass [wood pellets, wood chips etc.] energy source). The wood pellets market in Europe is likely to expand during the forecast period, owing to policies around GHG (Green House Gas) emissions, especially the Renewable Energy Directive (RED) policy.

Wood Pellets Market: Key Players

Key players operating in the global wood pellets market are Enviva LP, TANAC SA, Energex, Grannul Invest, AN VIET PHAT ENERGY CO., LTD, Pinnacle Renewable Energy Inc., German Pellets, F.E. Wood & Sons, and Drax Group plc.

Global Wood Pellets Market: Segmentation

Wood Pellets Market, by Application

  • Residential Heating
  • Commercial Heating
  • CHP (Combined Heat & Power)
  • Power Generation

Indian Stakeholders Maintain Optimum Quality in Pellets for Consistent Commercial Heating

Manufacturers in the wood pellets market are boosting their output capacities in pellets made from 100% sawdust for burner applications. NDMI Renewable Energy Private Limited – a gas logs supplier in Uttar Pradesh, India, is unlocking revenue opportunities in commercial heating and industrial heating applications by producing 100% sawdust fine wood pellets that are economical and easy to use.

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