In April 2022, Enviva, one of the leading wood pellets market players, announced plans to establish a new production plant in Bond, Mississippi. The project would involve an investment of USD 250 million,  comprising nearly 100 local workers in the Stone County plant. The growing adoption of similar initiatives by major industry participants is expected to drive business expansion over the coming years.

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Some of the key contenders in the global wood pellets market comprise Svenska Cellulosa Aktiebolaget, Pinnacle Renewable Energy, Stora Enso, and others. Further, these companies are also entering partnership agreements, owing to which the industry size is estimated to hit USD 20 billion by 2027, says Global Market Insights Inc. Some of the additional factors that are likely to drive the global business landscape have been mentioned below:

Rising number of acquisition and merger initiatives

Several industry players are adopting a series of strategic steps such as mergers, acquisitions, and product developments for consolidating their market position. Some of the other initiatives adopted by key wood pellet manufacturers include research activities.

Considering an instance, in April 2021, Drax Group completed the acquisition of Canada-based bioenergy pellets supplier, Pinnacle Renewable Energy Inc. The move made Drax the leading sustainable bioenergy generation and supply business at the global level. The increasing adoption of such steps is anticipated to drive market growth over the forthcoming years.

Increasing investment initiatives in the APAC region

The Asia Pacific wood pellets market demand is anticipated to surpass 7.5 million tons until 2027. The rise can be credited to an increase in favorable business initiatives across various countries. As part of the same, several studies are being launched for analyzing the need for biomass optimization.

One such study conducted by the Economic Research Institute for ASEAN and East Asia proposed a wood pellet business model for Indonesia. The research provided a set of recommendations and conclusions on optimizing the role of biomass in the achievement of low-carbon energy transition.

The proposal in the wake of the country’s potential for contributing toward the reduction of gasoline, coal, and diesel oil consumption via biomass. An increase in similar initiatives is expected to propel business expansion over 2021-2027.

Examining North America industry landscape

The wood pellets industry in North America is expected to record an appreciable valuation over the estimated period. The growth can be attributed to the expanding nature of the market in the southeastern parts of U.S.

According to reliable statistics, the industry in Southeast U.S. has expanded to 23 mills with an annual capacity of producing over 10 million metric tons for export. Besides, the industry has also proved to be beneficial in boosting the local trucking and logging businesses. These factors are estimated to drive the wood pellets demand in the region.

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Way forward

The forthcoming years are expected to record an increased product demand. This can be mainly credited to their lower ash content and moisture in comparison to traditional fossil fuels such as coal, LPG, propane, and commercial butane. Other factors driving wood pellets industry expansion comprise the formulation of favorable regulatory policies in countries such as Canada.

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