Global Wood Pellet Market – The Advantages and Genesis

Global Wood Pellet Market – The Advantages and Genesis

By Knowledge Sourcing Intelligence Blog

Our lives have been enhanced in leaps and bounds by the evolution of technology. Especially more and more modern amenities have become integral to our daily lives. Most of them are energy-dependent. Further with the advent of COVID 19 energy has emerged instrumental in sustaining the global economic lifeline. On the other hand, we reside in a world that provides enormous sources of wastes, by-products, and residues of plant origin, which puts the utilization of biomass in an economic manner for the benefit of human lives, a lucrative business endeavor. There have been certain developments making technologies reliable to convert wood byproducts into briquettes and pellets which are primarily intended for heat generation. Palletization among others is the most common practice for using biomass towards facilitating energy supply in households and power plants.  Further contingent on the capability of combustion equipment to operate with the right stoichiometry, woody biomass is known to have relatively low emission of pollutants such as particulates and low occurrence of incomplete combustion products and nitrogen oxides. Further, it is also known for low ash content which enables the combustion equipment to operate devoid of any deposits. Moreover, the entire process of firing and heating can be managed through the means of efficient regulation and control that ensure a convenient environment application in communal buildings and households. This makes pellet-firing environmentally friendly.

wood pellet market

Also, wood pellets are known to have an enhanced heating value in the unit volume and there are boilers specially designed for using pellets with automatic feeding devices. This equipment ensures a complete and efficient burning with low ash content and particulate emission. The use of pellets varies for heating in small-scale residential and public buildings and also co-firing in coal power plants. The economic use of pellets is determined by the pellet production costs which depend on many influencing factors and conditions. The main cost elements are the cost of raw material and its preparation costs (chipping, grinding or hammermilling, drying, conditioning), industrial equipment (chipper, hammermill, dryer, pellet mill, cooler, screener and bagging), peripheral equipment (feeder, conveyor, loader) and operating costs such as labor costs and consumables. The collection, storage, and transportation of the raw material to the factory is an important cost factor. Pellet based heat generation has certain advantages and some of them are (a)clean, renewable energy, (b) easy to ship, (c) eco-friendly, (d) heat regulation is solved, (e)high energy efficiency (up to 95%), (f) its heat output can be easily modified, varied, (g) low CO2 emissions, (h) modern equipment at competitive prices, (i) the energy density of pellets is high, the storage is convenient, (j) the pellet boiler has low maintenance, (k) the pellet feeding can be automated, (l) well-defined, guaranteed heat value, well-scalable systems, (m) wood pellets produce little ash (<1%).

Besides as far as the retail and municipal sectors are concerned pellets are quite completive which adds to the factors apart from the aforesaid facilitating the global wood pellet market growth. Being appropriate for serving small and medium-sized households which are complemented by the automation and programmability facilities offered by the pellet boiler which makes it a technologically competitive alternative to gas boilers ultimately offering satisfying customer convenience.  Another benefit is the storage of pellets necessitates fewer safety precautions when compared to heating oil and bottled gas. During the last couple of decades, the market growth of wood pellets has been facilitated by two main factors. The first factor encompasses the constant rise in fossil fuel prices and the instability of prices which has catalyzed wood pellets adoption. The other factor is the growing concern related to the effects of fossil fuel utilization on the environment. Wood pellets market growth is also buttressed by the fact that production of pellets can be carried out locally by utilizing local wood and biomass materials which ultimately gives rise to affordable fuel which is made concomitantly local job creation while at the same time minimizing the carbon footprint to a certain extent. Further, it is also pertinent to note that today’s promising global wood pellet market which has been forecasted by Knowledge Sourcing Intelligence LLP to attain a market value of US$23.604 billion in 2025 after growing at a CAGR of 14.47% from the market value of US$10.491 billion that has been estimated for 2019 had its beginnings when both industrialization and animal husbandry was undergoing a dramatic transformation.

With the growing feed requirements and the development of the industry, there was a need to produce feed containing a certain proportion of ingredients. Associated with Louis Smulder & Co. machine factory in Utrecht which had brought about a viable solution that sustained a constant mixing rate in the product, the first machine was built in 1906. Further in the 1920s, pellets for fuel were manufactured n North America. Following this breakthrough, the raw materials pertaining to fuel pellet products primarily comprised sawdust from sawmills. It was primarily due to sawdust could be used in wood pellet making without the need for preparation. The fibrous cellulosic fibers are also known to reinforce the compaction which has been produced by the pressure. Further, in case, the wood has larger amounts of resins and oils, less pressure is required. Hence by employing such simple technology pellet production was made possible by utilizing wood waste. After 2000, the market experienced the emergence of manufacturing more energy-intensive pellets with the use of a braid range of raw materials especially in Canada and western Europe. Such advanced is the production capacity during present times that aspirations like the announcement in September 2020 by the Japanese energy company Idemitsu Kosan Co., Ltd. (TYO: 5019) which is the conducting of verification test for pelletizing the Sorghum plant, that is known to be suitable for growing in the area with low rainfall into wood pellets.  Further, there are plans to commence the torrefaction test which is a thermal process that converts wood pellet into black pellet later this year. This project has received 20,000 AU$ from the Queensland State Government.