Biomass Solid Fuel Market Size & Share Analysis - Growth Trends and Forecast (2025 - 2030)

Global Biomass Solid Fuel Market Trends and Insights

Rapid Decarbonization Mandates in the EU Heating Sector

Member states must reach 42.5% renewable energy in final consumption by 2030, and heating is the fastest lever to pull. Austria logged 19,181 new pellet-boiler installations during early 2024, with subsidies meeting 75% of capital cost, up to EUR 18,000 per unit. Germany mirrors this policy, offering up to 70% subsidy coverage, though potential political shifts may revise terms after 2025. The revised cascading principle under RED III gives material uses priority over energy, forcing utilities to compete for premium-grade pellets. Supply chains are pivoting toward lower-cost Brazilian imports that undercut Baltic shipments by more than USD 50 per tonne on a delivered basis. Facing these economics, Utilities are favoring long-term offtake deals to lock in certified volumes at predictable prices.

Expansion of Industrial Coal-to-Biomass Conversions

Power firms are pushing co-firing blends from 10% toward full fuel substitution, avoiding stranded-asset risks. Babcock & Wilcox retrofitted a Michigan plant to run on woody biomass and integrated carbon capture, targeting net-negative 550,000 tCO₂ annually.^{[1]Babcock & Wilcox, “SolveBright carbon capture integrated into biomass retrofit,” babcock.com}Hanwha Energy’s planned combined-heat-and-power switch in South Korea underlines broader Asian uptake even as subsidy cuts loom. Steam-explosion pretreatment boosts calorific value, letting pulverized units burn biomass without extensive mill upgrades. The upfront engineering costs favor incumbent utilities that own fuel-handling systems, widening the moat against smaller entrants.

Carbon-Neutral Corporate Procurement Programs

RE100 members’ electricity use now surpasses South Korea’s annual demand, bringing direct biomass contracts into focus. The Science Based Targets initiative encourages beyond-value-chain mitigation, nudging firms toward projects with verifiable sequestration benefits. Limited to 2% renewable penetration, Japanese buyers view biomass co-firing as an interim bridge. Sumitomo co-develops cellulosic ethanol for sustainable aviation fuel, signaling deeper vertical integration. Corporate buyers prefer long-term agreements backed by traceability audits, raising the bar for documentation across the biomass solid fuel market.

Maritime Demand for Torrefied Pellets as Drop-In Bunker Fuel

ISO 8217:2024 lets marine fuels contain up to 100% FAME, while the EU’s FuelEU Maritime rule caps fleet greenhouse-gas intensity from January 2025. Torrefied pellets reach 10,500 BTU/lb, nearly on par with coal, and remain hydrophobic—traits prized for onboard storage.^{[2]CIMAC, “ISO 8217:2024 marine fuel standard explained,” cimac.com} BHP’s pilot voyages on bio-derived blends proved engines need minimal hardware changes. Despite price premiums, shipowners are now signaling 2- to 3-year offtake tenders to ensure supply at scale once regulation kicks in.

Feedstock Competition with Panelboard & Pulp Industries

Panelboard mills offer premium pricing for fine sawdust, diverting up to 15% of residue that would otherwise feed pellet lines. Advanced mills marketed by ANDRITZ process mixed species efficiently, sharpening competition.^{[3]ANDRITZ AG, “Advanced panelboard lines for mixed hardwood residues,” andritz.com} Kraft pulp plants upgrading into biorefineries extract lignin, ethanol, and green chemicals, enabling higher margins than commodity energy pellets. In the United States, the forest-products sector contributed USD 24.1 billion in 2024 output, giving it negotiating muscle for feedstock. Pellet producers must therefore secure longer rotation contracts or co-locate capacity near secondary harvest residues to sidestep bidding wars.

Sustainability & Land-Use Scrutiny by NGOs and Financiers

Civil-society groups warn Southeast Asian pellet exports risk deforesting up to 10 million ha of tropical forest by 2040. The EU’s new deforestation-free regulation forces importers to prove legality and traceability for each consignment. Lenders now require robust certification before approving project finance, limiting capital access for plants lacking transparent land-tenure documentation. The Fern network argues that legality alone does not equal sustainability, prompting investors to demand ecological performance metrics.

Segment Analysis

By Type: Torrefied Innovation Drives Premium Growth

Wood pellets dominate the biomass solid fuel market, but torrefied variants headline growth. The segment commanded a 60.8% share in 2024, while torrefied and black pellets will post a 21.4% CAGR to 2030. Steam-explosion densification raises durability and reduces freight expenditure by 30%, spurring uptake among utilities that need coal-substitute grindability. Briquettes retain a niche in European households where existing stoves favor larger formats. Agricultural-residue pellets, abundant in Southeast Asia, struggle with variable ash content that complicates quality certification. Despite this, rising palm-kernel exports suggest a path for standardized grading systems to unlock latent volumes. Torrefied fuels meet maritime energy-density thresholds, positioning suppliers that build capacity now to capture bunker-fuel demand once FuelEU Maritime rules start. The biomass solid fuel market size for torrefied products is forecast to rise from USD 2.02 billion in 2024 to USD 5.35 billion by 2030.

The torrefaction process records up to 96% thermal efficiency, creating a near-coal calorific value without sulfur emissions. Investors favor plants that integrate torrefaction and pelletizing to minimize double-handling costs, while end users require pellets with >97% durability. The agricultural-residue subsegment benefits from lower feedstock prices yet faces silo-storage challenges due to higher potassium content that elevates slagging risks. Supplier differentiation rests on testing protocols that assure combustion stability in pulverized boilers.

Note: Segment shares of all individual segments available upon report purchase

By Application: Utility Dominance Accelerates Transition

Utility-scale power generation held a 43.5% share in 2024 and will lead growth at a 10.9% CAGR. Carbon–pricing trajectories in the EU and Canada penalize unabated coal, incentivizing full replacements with certified pellets. Combined heat and power attracts industrial sites where steam demand aligns with onsite electricity generation, producing efficiencies above 80%. Investment cost ranges from EUR 3,410 to EUR 5,970 per kW, yet operating expenses fall sharply when low-grade residues are available. Residential heating expanded briskly in 2024 thanks to generous EU boiler incentives, but heat-pump adoption could temper further uptake after 2026. Commercial buildings prefer multi-megawatt pellet boilers that offer steady baseload and predictable maintenance schedules, helping them lock in cost savings over heating oil across a 15-year horizon.

The biomass solid fuel market size for utility applications is expected to climb from USD 11.24 billion in 2024 to USD 22.15 billion by 2030. Industrial heat users beyond CHP are exploring torrefied pellet blends to hit ISO 50001 energy-efficiency targets without retrofitting process furnaces. As carbon costs escalate, the economics tilt toward high-density biomass over liquefied natural gas imports in Europe and Northeast Asia.

By End User: Utilities Lead Infrastructure Transformation

Utilities and independent power producers controlled 46.2% of 2024 demand and will rise in lockstep with their pipeline of conversion projects. Long-term offtake deals now exceed five years on average, reflecting aversion to spot-market volatility. Industrial end users are moving toward onsite biomass boilers that secure process-heat independence and de-risk fuel-price swings. The biomass solid fuel market share held by utilities will widen as they integrate feedstock sourcing with power-plant retrofits. Small commercial consumers add incremental growth where pellet boiler replacements coincide with building renovations, though each project’s scale limits aggregated tonnage. Households anchor residual demand, especially in Alpine and Nordic regions, where winter heating days remain high. Suppliers catering to this segment bank on continued government rebates and tighter emissions caps on heating oil.

Utilities see strategic merit in co-locating pellet plants near port facilities to lower maritime freight for surplus volumes. Insurance premiums on fire risks have moved 12% higher since 2023, pushing operators to invest in spark-detection systems and nitrogen-blanketed silos that reduce ignition probability.

Geography Analysis

Asia-Pacific held a 38.1% share in 2024 and is projected to expand at a 11.2% CAGR. Japan’s palm-kernel shell imports hit 670,000 t in March 2025, while wood-pellet inflows grew 29% year-on-year to 685,000 t as new units such as the 46 MW Imari plant came online. South Korea’s December 2024 subsidy rollback curtails new projects, but retrofits already in construction continue under grandfathered terms. China aims for 58 million t of standard-coal-equivalent biomass by 2030, focusing on agricultural residues. Indonesia, Malaysia, and Thailand are scaling exports, yet mounting deforestation scrutiny may prompt stricter feedstock audits.

Europe enforces the world’s most stringent sustainability screens. Pellet consumption slipped 1.2% in 2023 to 24.5 million t after a mild winter, but residential boiler subsidies cushioned the decline. Austria’s record installations underline policy potency in stimulating demand. Finland and Sweden face resource-allocation clashes as cascading use principles prioritize timber for material applications over energy. From 2026, tighter RED III rules require producers to demonstrate forest-biomass compliance, likely spurring supply diversification outside the Baltic region.

North America dominates export supply, shipping 8.87 million t in 2024, up 3% year-on-year. Domestic consumption dipped 14%, reflecting cheaper natural-gas prices and mild winters. Drax’s USD 12.5 billion investment plan for US plants could redirect tonnage inward, shifting the biomass solid fuel market equilibrium toward tighter global seaborne balances. USA Bioenergy’s long-dated supply deal for a USD 2.8 billion sustainable-aviation-fuel complex locks in 2.2 million t of feedstock, shrinking export availability but raising in-region value capture.