Wood Pellets Market Report 2026

The wood pellets market size has grown rapidly in recent years. It will grow from $13.32 billion in 2025 to $14.97 billion in 2026 at a compound annual growth rate (CAGR) of 12.4%. The growth in the historic period can be attributed to increasing use of biomass for residential heating, availability of sawdust and wood waste, expansion of pellet-fired boilers, supportive renewable energy policies, rising fossil fuel price volatility.

The wood pellets market size is expected to see rapid growth in the next few years. It will grow to $23.56 billion in 2030 at a compound annual growth rate (CAGR) of 12%. The growth in the forecast period can be attributed to expansion of carbon-neutral energy targets, increasing adoption of biomass power generation, rising investments in pellet export infrastructure, growing demand for industrial-scale heating solutions, advancements in pelletizing efficiency. Major trends in the forecast period include increasing adoption of biomass-based heating solutions, rising demand for high-density wood pellets, growing utilization of industrial waste feedstock, expansion of automated pellet production lines, enhanced focus on low-emission combustion performance.

The rising global demand for renewable energy is expected to drive the growth of the wood pellets market in the coming years. Renewable energy refers to energy derived from natural sources that are replenished faster than they are consumed. Wood pellets serve as a renewable energy source produced from various wood waste materials. For example, in December 2024, according to Eurostat, a Luxembourg-based statistical office of the European Union, renewable energy accounted for 24.5% of total energy consumption in the EU in 2023, marking a 1.5 percentage point increase from 23% in 2022. Likewise, the share of renewable energy used in the transport sector rose to 10.8% in 2023, up from 9.6% in 2022. Therefore, the growing global demand for renewable energy is fueling the expansion of the wood pellets market.

Major companies operating in the wood pellets market are emphasizing the development of advanced solutions, such as sustainable wood sourcing, to promote environmental responsibility and differentiate their products. Sustainable wood sourcing involves utilizing leftover or by-product wood from other manufacturing processes, reducing waste and supporting eco-friendly practices. For example, in March 2024, Traeger Inc., a US-based company, introduced limited-edition Louisville Slugger Pellets made from maple wood sourced from New York and Pennsylvania forests, traditionally used for bat production. These pellets repurpose leftover wood from bat manufacturing into high-quality fuel for grilling. The launch was supported by a comprehensive advertising campaign across TV, digital, radio, print, and social media, with Ken Griffey Jr. endorsing the product, connecting it to baseball culture and boosting consumer engagement. The pellets offer consistent burn performance, rich maple flavor, and an eco-conscious choice for consumers seeking premium grilling experiences. Traeger’s approach highlights innovation by combining product quality with sustainability and strategic brand partnerships.

In April 2023, LEAG, a German energy company, acquired Wismar Pellets GmbH for an undisclosed amount. This acquisition gives LEAG control over the largest pellet plant in northern and eastern Germany. It enhances its presence in the domestic market and expands its distribution reach, extending throughout Germany and into key international markets, including Denmark, Belgium, and the UK. Wismar Pellets GmbH is a Germany-based producer of wood pellets.

Major companies operating in the wood pellets market are Enviva Inc., Energex American Inc., Graanul Invest AS, Pinnacle Renewable Energy, Fram Renewable Fuels LLC., Segezha-Group, Lignetics Inc., Asia Biomass Public Company Limited, Sinclar Group Forest Products, Wood Pellet Energy UK Ltd., Highland Pellets LLC, Groupe Savoie Inc, Drax Group plc, The Westervelt Company, Forest Energy Corporation, New England Wood Pellet, Pacific BioEnergy Corporation, Maine Woods Pellet Company, Bear Mountain Forest Products, Michigan Wood Pellet Fuel LLC., Somerset Pellet Fuel, Trae Fuels Ltd., Vermont Wood Pellet Company, Appalachian Wood Pellets.

Europe was the largest region in the wood pellets market in 2025. Asia-Pacific is expected to be the fastest growing region in the wood pellets market report during the forecast period. The regions covered in the wood pellets market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the wood pellets market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The wood pellets market consists of sales of premium wood pellets, standard wood pellets, food-grade wood pellets, traeger signature wood pellets, applewood pellets, cherry wood pellets, pecan wood pellets, mesquite wood pellets, and hickory wood pellets. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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