North America Wood Pellet Market

North America Wood Pellet Market Analysis

The North America Wood Pellet Market is expected to register a CAGR of greater than 7.8% during the forecast period.

• The heating application is expected to dominate the wood pellet market in North America during the forecast period.
• High demand for carbon neutral and sustainable fuel and wood pellets could replace coal-based power generation. Further, there is a rise in the wood pallet-based power plant in the region, which is expected to provide a significant opportunity for the wood pallets market during the forecast period.
• The United States has dominated the wood pellet market. The government's supportive policies for the research and development of wood pellets are expected to drive the market in the country.

North America Wood Pellet Market Trends

The heating application is expected to dominate the wood pellet market

• Wood pellets are gaining market share as these pallets have higher energy and density than unprocessed biomass. Furthermore, wood pellets production uses waste wood from agriculture and sawmills, an effective way to reduce waste and generate heat and power.
• Traditionally wood pellets are used for heating applications, primarily in residential and commercial sectors for food, cooking and grilling, and supplying heat to homes. Since the cost of pellets remained cheaper than that of other fuels for a long time, it has become a more economical option, addressing the primary concern of the residential and commercial sectors.
• Moreover, wood pellets are considered a renewable energy source. Thus, they received various subsidies and incentives from the regional governments, and governments have also updated their policies and schemes related to wood pellets for heating applications in recent years.
• For instance, in January 2021, a new Wood and Pellet Heater Investment Tax Credit (ITC) came into effect in the United States, under which consumers buying highly efficient wood, pellet stoves, or larger residential biomass heating systems can claim a 26% tax credit that is uncapped and based on the full cost (purchase and installation) of the unit.
• Furthermore, consumers have a rise in awareness about using coal for power generation. Thus many consumers are shifting from coal to wood pellets for heat generation during the winters in the United States and Canada, which is a major driving factor for the wood pellet market.
• Thus considering all the factors, the wood pellets market is likely to grow with a high CAGR in the North America region during the forecast period.

United States Dominate the Market

• North America is one of the leading regions in producing wood pellets on a global scale. Further is also one of the world's top regions in exports of wood pellets.
• In 2021 wood pellets production was around 20 million metric tons. Moreover, in 2021, in North America, the wood pellet capacity increased by 12%; this can ascribe to the rise in export-oriented projects in the region, particularly in the United States.
• According to the United States Energy Information Administration, wood pellet production is expected to rise in 2022 and reach 23 million metric tons. This significant rise in wood pellet capacity is due to increased investment in wood pellet production facilities in the South part of the country. The region consisted of
• Furthermore, the United States is the world's leading exporter of wood pellets; in 2021, the total wood pellets export reached a valuation of USD 1 billion for the first time. Between 2012 and 2021, U.S. wood pellet exports increased 296.3% by volume and 310.1 % by value.
• The United States exports the wood pellets to the country from Europe, the United Kingdom, Japan, and South Korea. In the last decade, the Exports of wood pellet in the United Kingdom has increased by 703.1% by volume and 563 % by value.
• With increased investment in wood pellet manufacturing coupled with supportive government policies, the wood pellets market in the country is expected to grow with a high CAGR.

North America Wood Pellet Industry Overview

North America wood pellet market is moderately fragmented. Some of the key players in the market include Enviva Partners LP, AS Graanul Invest, Drax Group PLC, Fram Renewable Fuels LLC, and Lignetics Inc.

North America Wood Pellet Market Leaders

North America Wood Pellet Market News

• In May 2021, Enviva Inc. and MOL Drybulk Ltd., a Mitsui O.S.K. Lines Ltd. subsidiary, announced that they had signed a memorandum of understanding to deploy an environmentally friendly bulk carrier. With this MOU, both companies reduce the greenhouse gas emissions in the ocean transportation of sustainable wood pellets and biofuels.
• In February 2022, Drax Group starts operations in its Leola satellite pellet plant in Arkansas. The plant is the first of three new satellite pellet plants that the company planned for Arkansas. The company invested USD 40 million in the plant. Furthermore, the company, with three plants, aims to increase the total wood pellet production to 120,000 tons annually.