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The global biomass wood pellet market has grown significantly over the past decade. From 2012 to 2018, the global biomass wood pellet market grew at an average annual rate of 11.6%, from about 19.5 million tons in 2012 to about 35.4 million tons in 2018. From 2017 to 2018 alone, biomass wood pellet production increased by 13.3%.
The heating (premium) pellet market is different from the industrial wood pellet market. However, these sectors influence each other. Within the pellet heating sector, there are two sub-sectors: the bag pellet market (for pellet furnaces) and the bulk pellet market (for pellet fuel central heating systems).
Demand for heating pellets is affected by policies, weather and other heating fuel prices.
Policies supporting the heating pellet market are based on low carbon emissions from pellet fuel appliances, support for local forestry and employment opportunities from pellet production, and no smoke pollution from burning wood.The chart below shows two positive environmental attributes.
Total pounds of particulate per year
Total pounds of CO2 per year
The size of the heated particles is large and is expected to grow significantly. The graph below shows the historical demand for global heating pellets and FutureMetrics' demand for heating pellets under current policies.
Global premium (heating) pellet demand (residential commercial) in 1000's metric tonnes
The first requirement for developing the pellet heating industry is to have sufficient heat requirements (heating days). The economic benefits of particulate fuels over alternative heat sources must then be tangible. In some places, particulate fuel is the lowest cost alternative. However, government support for the cost of capital for the new system is a key component of growth in almost all regions.
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