HYDERABAD, India, July 9, 2026 /PRNewswire/ -- According to recent reports from Mordor Intelligence, the global wood pellet market is on a steady growth path, with its value projected to increase from USD 18.53 billion in 2026 to USD 26 billion by 2031, registering a CAGR of 7.01%. Demand is being driven by utilities and district heating systems shifting toward lower-carbon fuels, while businesses secure long-term biomass supplies to reduce exposure to volatile fossil fuel prices.  

Europe remains the largest trading hub, but increasing imports from Japan and South Korea, along with co-firing projects in China and India, are boosting Asia-Pacific's role. At the same time, producers are expanding the use of agricultural residues and energy crops, while industry consolidation in North America is reshaping competition. 

Wood Pellet Market Drivers and Key Trends: 

Biomass Co-Firing Policies Encourage Pellet Consumption 

Government-backed biomass co-firing programs are increasing the use of industrial wood pellets in power generation. Long-term supply agreements are giving producers greater investment confidence, while buyers are seeking more flexible contracts to manage changing fuel and transportation costs. Competition from alternative low-carbon fuels continues to influence purchasing decisions. 

"Wood pellet markets continue to evolve alongside changing energy demand, supply dynamics, and policy developments, making consistent market evaluation increasingly important. Mordor Intelligence applies a structured research approach using validated primary and secondary sources, enabling decision-makers to assess market developments with transparent, evidence-based analysis" says Himanshu Vasisht, Senior Research Manager, Mordor Intelligence.

Stricter Sustainability Standards Boost Certified Pellet Demand 

Tighter sustainability and traceability requirements are increasing the preference for certified wood pellets. Producers with recognized certifications are strengthening their position in long-term supply contracts, while stricter compliance standards are making market entry more difficult for smaller suppliers. This trend is encouraging industry consolidation and higher investments in sustainable sourcing. 

Access Japan-Focused Editions & Detailed Regional Insights: https://www.mordorintelligence.com/ja/industry-reports/wood-pellet-market?utm_source=prnewswire  

Wood Pellet Industry Segmentation Insights 

By Feedstock 

• Forest/Wood Residue 

• Agricultural Residue 

• Energy-Crop and Sawdust Mix 

By Grade 

• Utility-Grade (White) 

• Premium-Grade 

• Standard-Grade 

• Torrefied "Black" Pellets 

By Application 

• Heating 

• Power Generation 

• Combined Heat and Power (CHP) 

By End-user 

• Residential 

• Commercial 

• Industrial and Utility 

• Animal Bedding 

By Region: 

• North America 

• Europe 

• Asia-Pacific 

• South America 

• Middle East and Africa 

Wood Pellet Market Share by Region: 

Europe: Leading Consumer with Stable Demand 

Europe remains the leading consumer of wood pellets, supported by established biomass power generation, district heating systems, and residential heating applications. Although policy changes have created some uncertainty, demand for certified pellets continues to remain strong due to sustainability requirements. 

Asia-Pacific: Fastest-Growing Regional Market 

Asia-Pacific is emerging as the fastest-growing region as biomass co-firing programs and renewable energy initiatives encourage higher pellet consumption. Expanding clean energy projects and increasing industrial demand are expected to strengthen the region's long-term growth, while competition from alternative biomass fuels remains a challenge. 

Wood Pellet Companies 

• Enviva Inc. 

• Drax Group PLC 

• AS Graanul Invest 

• Lignetics Inc. 

• Segezha Group JSC 

• Fram Renewable Fuels LLC 

• Pinnacle Renewable Energy Inc. 

• Pacific BioEnergy Corp. 

• Viridis Energy Inc. 

• Georgia Biomass LLC 

• Rentech Inc. 

• German Pellets GmbH 

• Pannonia Bio Zrt. 

• PT South Pacific Viscose 

• Asia Biomass Public Co. Ltd. 

• Energex Inc. 

• Highland Pellets LLC 

• Pfeifer Group 

• Nova Pellet Srl. 

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SOURCE Mordor Intelligence Private Limited