Pellet Fuel Market

Pellet Fuel Market: Overview

Increasing fossil fuel prices and environmental concerns have laid a direct implication on the pellet fuel market. According to a recent article published in Biofuel, Bioproducts and Biorefining (Biofpr) (2009) the wood pellet production in Europe was more than 10 million metric tons. The EU 2020 policy regarding the greenhouse gases emission and use of renewable energy resources are likely to create a positive impact in the pellet fuel market. Increasing natural gas and crude oil prices can serve as an important factor towards the use of pellet fuels. As per the biomass magazine the demand for the pellet fuels are directly related to the natural gas prices.

Pellet Fuel Market: Segmentation

Segmentation of the pellet fuel market can be done on the basis type of feedstock, grade, applications and location of pellet fuel using countries. Pellet fuel is made with the help of compressed biomass. On the basis of the feedstock pellet fuels can be classified as wood pellets, corn pellets, and grass pellets. Wood pellets are the most widely used types of pellet fuels. Wood pellets are prepared by the compression of the left over or the recycled woods.

The Wood pellets are mainly available as standard grade and premium grade. Standard grade contains 3% ash content and premium grade contain less than 1% ash content. Corn pellets are similar to wooden pellets in terms of cost to heat production ratio. Although the technology for the development of the stoves to use grass pellets is still in development phase, but there are many types of grasses that can be converted to pellet fuel. Some of the grasses that can be used for the production of pellet fuel are reed canary grass, switch grass and miscanthus. Pellet fuels are used in pellet stoves, pellet baskets and furnaces as a source of fuel.

Pellet Fuel Market: Region-wise Outlook

Geographical segmentation can be done on the basis of the location of pellet fuel consuming countries. Some of the major pellet fuel consumer countries include the United States (North America), Germany, United Kingdom, Belgium, Italy, Sweden, Denmark Austria, Netherlands and Russia (Europe), Australia, China, Japan and New Zealand (Asia Pacific). In Belgium, Netherlands and United Kingdom the pellet fuels are mainly used as fuel for large scale power plants. In Denmark and Sweden the pellet fuel is mainly used in the small scale power plants and residential heating systems. As per the report published by the European Union, the United Kingdom (4540000 tons), Denmark (2500000 tons) and Netherlands (2000000) tons are the three largest pellet fuel consumers in Europe.

Development of high efficiency pellet fuel stoves, low green house gas emissions, low cost of feedstock (corn, grass, wood), supportive government policies and depleting fossil fuel reserves are the main factors that are acting as the drivers for the development of the pellet fuel market.  High costs associated with designing of pellet fuel stoves and chimneys are the main restraints to the pellet fuel market. Recent government policies encouraging the use of clean and renewable sources of energy, depleting and unevenly distributed fossil fuel reserves can act as the opportunities for the development of the fuel pellet market in future.

Major pellet fuel producing companies include German Pellets Louisiana, Enviva Pellets Northampton LLC, Enova Energy Group, Bear Mountain Forest Products and Farm Renewable Fuels.