Global Wood Pellet Market Analysis

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From the view of global market, the demand for wood pellets is keep increasing all these years. The pellet fuel production has reached 12 million metric tons every year since 2009. And the number is predicted to increase to 100 million by 2020. Environment situation, global agreements (support of renewable sources of energy) and government policies are all the dives for this trend.

global energy production

Percentage of global energy production by source. Source: EIA 2008

The Global Energy Market

Compared with 2010, the global energy consumption will grow 50% by the year 2035. At present, coal, oil and natural gas are the top three energy sources in the world. And 86% of the world’s energy is supplied by these three traditional sources. However, there are also many new types of renewable energy are discovered and put to use, such as biomass energy, tidal and wave, solar, wind, geothermal and hydroelectric. It is projected that the renewable energy will take 15% of global energy consumption (100 quadrillion British Thermal Units (BTU)) by 2035.

global energy consumption

Biomass Fuel

In natural, there are plenty of biomass energy stored in organic material such as agricultural and forest products. In most developing countries, biomass fuel is generally used for cooking and heating in rural areas in the form of firewood. In developed countries, biomass fuel is widely used in electricity generation industry. Using biomass as the fuel of power plant can ensure continuous fuel supplement, unlike solar and wind, which rely on weather conditions. Wood materials are the main feedstock for biomass pellet production line. Agricultural residues such as grass, crop straw, peanut shell and rice husk are also hot choice for making pellets with different quality and utilization.  

Wood Pellets

Wood pellets are made from wood residues and wastes such as saw dust, wood chips and shavings. There are plenty of wood wastes produced in the wood processing factories including the manufacture of furniture and lumber. Wood pellets are the most common type of compressed or densified biomass fuel. Pellet making process can generally be divided into feedstock crushing, drying, pelleting, wood pellets cooling and packing or bagging. Before pelletizing, the raw materials need to be processed to certain moisture content and size, so that to meet proper specifications. Sometimes, steam conditioner is used in a pellet plant to soften the wood materials and make them less abrasive to the pellet making equipment. Then in the pellet machine, under high pressure, the crushed biomass materials will be extruded through holes in the pellet die. Because of pressure and fiction, the temperature will increase during the extruding. High temperature helps soften the lignin in wood materials and improve the pelletizing process. When discharged from the pellet mill, the pellets are hot and need to be cooled in the open air or by use of cooler. After cooling, the lignums solidify, and the pellet is formed. Industry groups have make standards on the density, dimensions and other characteristic of wood pellets. In the United States, a set of standards for wood pellets grading is designed by the pellet fuel institute.

Institute standards of Pellet Fuels, effective October 27, 2010 (PFI 2010)
Fuel property Premium grade Standard grade Utility grade
Bulk density 40.0–46.0 38.0–46.0 38.0–46.0
Diameter (inches) 0.230–0.285 0.230–0.285 0.230–0.285
Diameter (mm) 5.84–7.25 5.84–7.25 5.84–7.25
Pellet durability index ≥96.5 ≥95.0 ≥95.0
Fines (percent at mill gate) ≤1.0 ≤1.00 ≤1.00
Inorganic ash percentage ≤1.0 ≤2.00 ≤6.0
Length (percentage > 1.5 inches) ≤1.0 ≤1.0 ≤1.0
Moisture percentage (wet basis) ≤6.0 ≤10.0 ≤10.0
Chloride (parts per million) ≤300 ≤300 ≤300

International Market Overview of Wood Pellets

wood pellet production consumption

The global economy has recovered from the Great Depression gradually. Till 2010, the GDP growth is 4% of 2008. The global expansion will case energy demand increasing, including fuel pellets. In North America and Europe, United States, Sweden, Germany, and Canada are the major wood manufacturing countries. Sweden, the Netherlands, Denmark and Belgium are the main wood pellet importing countries. Heating and electric power generation is the two main applications of wood pellets in European. In Italy, Germany, France and Austria, wood pellets are generally used for heating. 

In 2010, the wood pellet production of United States has increased to 1.8 million metric tons. Only 20% of the pellet production is exported. Most of them are consumed domestically. The wood pellets which are used in pellet stoves for home heating are packaged in 40 pounds per bag. The pellets which are exported overseas are shipped in bulk.

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