Wood pellets market report and potential forecast 2022 – 2030

Wood pellets are a solid fuel produced by crushing and concentrating waste wood such as sawdust. Contact to buy wood pellets for export in Vietnam: +84 366 274 472 (Rachel Duong)

Table of contents

1. Overview of the wood pellets market in 2022
2. Development trend of wood pellets in 2022 – 2023
3. The export potential of wood pellets in Vietnam
4. Factories producing wood pellets in bulk in Vietnam

1. Wood pellet market overview in 2022

Figure 1: Development of the market for wood pellets in countries

2. Development trend of wood pellets

Increasing demand for renewable energy globally: Key driver of wood pellet market

• According to the International Energy Agency, in December 2020, global carbon emissions were 2%, or 60 million tons higher than they were in the same month a year earlier. More carbon emission leads to negative effects such as heat-trapping, rise in maximum temperature, rise in minimum temperature, etc., which are responsible for global warming.
• The carbon emission rate should be on the lower side in order to curb the harmful effects of global warming, and this can be achieved by introducing energy sources that are carbon-free. Thus, renewable energy sources come into the picture, and clean energy can be produced by using renewable energy sources.

• Renewable energy is a prominent alternative to conventional energy (which is generated from fossil fuel), and several nations have imposed stringent rules to lower the use of fossil fuels and reduce their carbon footprint. Thus, a surge in the demand for renewable energy sources fueled renewable power generation by approximately 7.4% in 2019, which was the highest over the past five years. Production of renewable electricity stood at 2537 GW in 2019.
• Wood pellets are made from compacted sawdust and related industrial wastes from the milling of lumber, manufacture of wood products, and furniture. After the combustion of wood pellets, the emission of harmful gases is very low as compared to other fossil fuels. Demand is considerably high from thermal industries to generate clean energy; power can even be generated by co-firing wood pellets with coal. Thus, huge capital investment is not needed to generate power using wood pellets. These reasons create lucrative opportunities for the global wood pellets market.

Change in Policies Related to Coal-Fired Plant

• The number of countries accepting the “Paris Climate Change Agreement” has been increasing significantly across the globe. The agreement enforces countries to decrease their carbon footprint and greenhouse gases by reducing their dependence on fossil fuels.
• Wood pellets produced from sawdust and wood shavings offer environmental benefits over fossil fuels such as natural gas and heating oils. Wood pellets produce low volumes of hydrocarbons such as carbon dioxide (CO2) and methane. Additionally, wood pellets are carbon neutral, and switching from coal or natural gas to reduces greenhouse gas (GHG) emissions.

                                                                                              Coal-fired thermal power plant

• In December 2018, Canada announced regulations to phase out coal-fired as well as natural gas-fired electricity by 2030 to reduce greenhouse gas (GHG) emissions in order to tackle climate change and to fulfill its commitment to the Paris Agreement. The decision made by the Government of Canada related to greenhouse gas (GHG) emission is expected to boost investment in the wood pellets industry, as wood pellets are considered an efficient alternative required for green power generation.

• In Rotterdam, the Netherlands, the coal-fired power plant that is converted to pellet use generates about 5.5 TWh per year, which is over 40% more electricity than that generated by wind farms in Norway. This clearly represents the efficiency of wood pellets in generating energy, as compared to that of other renewable sources. The conversion of coal-fired power plants to pellets to generate electricity is driving the global wood pellets market in numerous countries.

3. The export potential of wood pellets in Vietnam

4. Bulk wood pellet factories in Vietnam

Due to the increasing demand for wood pellets, manufacturing plants have developed rapidly in the world in recent years. They are considered a form of carbon-neutral renewable energy. So power plants started to convert their coal-based systems to pellet-fired systems or plants that used both coal and pellets at the same time.

Wood pellet factory in Vietnam

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