The global wood pellet market has grown steadily over the past decade as countries look for practical ways to reduce emissions and shift away from coal. Wood pellets have become an important part of that transition because they can be used at scale and integrated into existing energy systems. Between 2012 and 2025, global wood pellet export volumes increased from 9.4 million metric tons to 35.0 million metric tons.
Much of that growth has been driven by policy. In both Europe and Asia, governments have supported biomass as part of broader decarbonization strategies. These policies have helped build long-term demand for pellets, especially in power generation, where biomass has been used as a lower-carbon alternative to coal.
The global pellet market is shaped by a concentrated group of major exporting countries and a small number of key demand centers. Trade flows have developed around regional policy priorities, available supply, and established infrastructure, creating a market that is both interconnected and sensitive to change.
Asia has been a major driver of demand growth in recent years, particularly as countries in the region have incorporated biomass into broader renewable energy strategies. Europe also remains a central part of the global trade picture, with established import demand continuing to influence supply patterns and investment decisions.
Because the market is so globally connected, changes in one region can quickly affect trade flows elsewhere. For companies across the biomass and forest products value chain, understanding where demand is growing, where supply is concentrated, and how those relationships are evolving remains important.
At the same time, the market is starting to shift. Policy changes in the UK are expected to reduce import demand beginning in 2027, which could affect trade flows well beyond Europe. Additionally, changes related to Drax’s Canadian pellet operations could have broader market implications, since those facilities have supplied both the UK and Asia.
Even with these shifts, there are still growth opportunities for biomass. One area getting more attention is the role biomass could play in meeting large-scale energy demand from new industries, including AI-related data centers. Biomass energy paired with carbon capture and storage (BECCS) could support reliable low-carbon or potentially carbon-negative baseload power in applications where consistent energy supply is important. BECCS is also expected to remain part of the long-term discussion around pellet demand in the 2030s.
Overall, the global pellet trade is entering a new phase. Demand is still tied closely to energy policy, but end-use opportunities are expanding and regional trade patterns may change over the next several years. For companies involved in biomass, forest products, or energy markets, understanding those shifts will be important.
Want to learn more? The full report, Biomass in Transition: What’s Next for Global Pellet Trade, takes a closer look at the data, trade patterns, and policy developments shaping the market.