The global wood pellets market size is expected to reach USD 18.22 billion by 2027, exhibiting a revenue-based CAGR of 9.4% during the forecast period, according to a new report by Grand View Research, Inc. Wood pellets can be used as an alternative for fossil fuels as they are eco-friendly, sustainable, and carbon neutral in nature. This factor is anticipated to drive the growth of the market.
Rising demand from the power generation industry is likely to drive the market over the forecast period. In addition, increasing awareness regarding the use of renewable energy sources for power generation coupled with the high combustion of wood pellet is likely to augment the demand for wood pellets over the forecast period.
Rising concerns regarding global warming and climate change coupled with rising oil prices are expected to boost the demand for renewable energy. In addition, the increased government spending on the utilization of renewable energy for power generation is likely to augment the demand for wood pellets over the forecast period.
The market is characterized by the presence of large-scale manufacturers catering the global demand. The demand for wood pellet is high in developed economies including U.K., Germany, Netherlands, Italy, and U.S. owing to their increasing application for electricity generation in coal-fired power plants and domestic heating.
Europe accounts for a significant market share of 77.8% in terms of volume in 2019. The demand for wood pellets is expected to witness significant growth on account of a wide range of market factors including increasing consumption of the product in power generation and the incentives offered by the European Union (EU) member states over the forecast period.
The major factors driving the demand for wood pellets in North America include the regional price competitiveness with propane and residential heating oil along with the increasing replacement of traditional burners for improving automatic feed-in and comfort. The favorable climatic conditions for the requirement of heating in the residential and commercial building is expected to fuel the regional market growth over the forecast period.
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