Asia Pacific Biomass Pellets Market Revenue was valued at USD 3.37 billion in 2024. The Asia Pacific Biomass Pellets Market size is estimated to grow at a CAGR of 3.1 % over the forecast period.
Market Estimation & Definition
Biomass pellets are compressed forms of organic matter—including agricultural residues, energy crops, wood waste, and food waste—used as a renewable fuel source. These pellets are primarily utilized in heating and power generation due to their low emissions, consistent energy output, and ease of transportation and storage.
In 2024, the Asia‑Pacific biomass pellets market was valued at approximately USD 3.37 billion, up from USD 3.27 billion in 2023. The market is expected to expand at a compound annual growth rate (CAGR) of 3.1%, driven by growing environmental concerns, strong policy backing, and increasing demand for cleaner energy alternatives.
Market Growth Drivers & Opportunities
Key Growth Drivers:
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Government Incentives and Policies: Numerous countries in the Asia-Pacific region are implementing mandates and subsidies for biomass usage, particularly in industrial co-firing and residential heating. India mandates biomass co-firing in coal-fired power plants, while South Korea and Japan enforce Renewable Portfolio Standards.
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Climate Goals and Emission Reductions: In response to climate change, many Asia-Pacific countries are shifting from coal to renewable sources. Biomass pellets offer a viable replacement for fossil fuels in industrial applications without extensive equipment changes.
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Technological Advancements: Innovations in pelletizing technology—including torrefaction and hydrothermal carbonization—are improving pellet energy density and combustion efficiency, making them more commercially attractive.
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Availability of Feedstock: Countries like India, China, and Vietnam have abundant access to agricultural residues and forest biomass, making feedstock both cost-effective and sustainable for local and export use.
Emerging Opportunities:
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Industrial Heat and Power Generation: The industrial sector is increasingly adopting biomass pellets for boilers and combined heat and power (CHP) systems, particularly in regions with limited access to cleaner fuels.
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Export Growth: Southeast Asian countries—such as Vietnam, Indonesia, and Malaysia—are capitalizing on strong export demand from countries like Japan and South Korea, where domestic supply is limited.
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Reduction of Agricultural Pollution: In India and parts of Southeast Asia, the adoption of biomass pellets is helping reduce air pollution caused by crop residue burning, creating environmental and health co-benefits.
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Decentralized Energy Systems: Biomass pellet adoption is growing in off-grid or rural areas where conventional electricity access is limited, particularly in Southeast Asia.
Segmentation Analysis
The Asia-Pacific biomass pellets market can be segmented based on product type, source, application, and geography:
By Type:
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Wood Pellets: The most dominant and fast-growing segment, especially in countries focusing on clean industrial energy.
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Agri-Pellets: Produced from crop residues, commonly used in India and rural regions.
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Torrefied Pellets: An emerging high-efficiency category with greater calorific value, ideal for co-firing.
By Source:
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Agricultural Residues
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Forestry By-products
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Energy Crops
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Industrial Waste
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Food Waste
By Application:
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Power Generation: Includes biomass-coal co-firing and dedicated biomass plants.
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Industrial Heating: Boilers and kilns in manufacturing and chemical industries.
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Residential Heating: Stoves and pellet heaters for domestic use.
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Others: Including district heating and commercial establishments.
By Geography:
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China
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India
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Japan
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South Korea
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Australia
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Rest of Asia-Pacific
Among these, industrial usage accounts for the largest share, projected to represent more than 35% of demand by the end of the decade. Wood pellets dominate across the region due to consistent performance, ease of export, and strong support in international markets.
Country-Level Analysis
China
China remains the largest consumer and producer of biomass pellets in the region. The country is focusing on reducing its reliance on coal, especially in the north where district heating demands are high. Local pellet manufacturing is largely supported by agricultural and forestry waste. Industrial adoption is rising steadily in both government and private sectors.
India
India’s biomass policy mandates at least 5% co-firing in coal-based power plants. The country also supports rural industries and energy access through subsidies for biomass pellet production. India has vast agricultural residue availability, particularly rice husk and wheat straw, making agri-pellets a major product category.
Japan
With strong energy import dependence, Japan is investing in biomass as a stable renewable source. It offers subsidies for both domestic heating and biomass power generation. Japan imports large quantities of wood pellets, primarily from Southeast Asia, to fuel its power plants and heating systems.
South Korea
South Korea enforces strict Renewable Portfolio Standards and is a major importer of biomass pellets. Industrial heating and utility-scale biomass projects are major consumers. However, the country faces scrutiny over the sustainability of imported pellets, especially from rainforest regions.
Southeast Asia (Vietnam, Indonesia, Malaysia)
These countries are growing rapidly as both producers and exporters. Vietnam leads with large-scale production and exports to Japan and South Korea. Indonesia is also expanding capacity, though it faces concerns over deforestation linked to pellet feedstock. Malaysia shows strong potential with increasing investments in pelletizing facilities.
Australia
Australia’s biomass pellet market is relatively small but growing. Policy revisions to exclude native forest biomass from renewable classifications may impact future supply-side growth, but demand for export remains steady.
Commutator Analysis
This analysis outlines the ecosystem of stakeholders and their interactions in the Asia-Pacific biomass pellet value chain:
Raw Material Suppliers
Agricultural cooperatives, forest product companies, and sawmills provide the feedstock needed for pellet production. These suppliers are crucial to ensuring low-cost, high-volume production.
Pellet Manufacturers
Producers operate in rural and peri-urban areas, often close to feedstock sources. The growth of torrefaction and high-efficiency technologies is allowing producers to improve pellet quality and cater to export markets.
Industrial and Utility Users
Power plants, manufacturing facilities, and CHP units represent the largest consumer segment. Their shift from coal to biomass aligns with national clean energy targets.
Residential Users
Homeowners in colder climates and rural areas use biomass pellets in stoves and boilers. Awareness and affordability remain key challenges in this segment.
Exporters and Traders
In countries like Vietnam and Indonesia, exporters play a central role in driving demand, especially from developed Northeast Asian markets.
Policy Makers and Regulators
Governments are enacting mandates, offering subsidies, and enforcing renewable targets that directly influence demand and infrastructure development.
Environmental Advocates
Activist groups and NGOs are calling for better supply chain transparency and sustainability in pellet sourcing. Their influence is shaping how pellets are classified under national and international carbon accounting rules.
Conclusion
The Asia-Pacific biomass pellets market is undergoing a significant transformation, fueled by the urgency of climate action, government support, and the region’s abundant biomass resources. Valued at USD 3.37 billion in 2024 and growing steadily, the sector offers strong potential in both domestic applications and regional trade.
Wood pellets lead the market, while industrial and residential heating are the most prominent application areas. Countries like China and India dominate in production and consumption, while Southeast Asia is rapidly positioning itself as the export engine for Japan and South Korea.
Going forward, the sector’s success will depend on:
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Ensuring feedstock sustainability.
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Strengthening international trade linkages.
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Enhancing production efficiency.
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Maintaining policy support for cleaner fuels.
Stakeholders from government, industry, and civil society must work together to promote transparent, low-carbon biomass solutions. With the right ecosystem in place, biomass pellets can become a cornerstone of Asia-Pacific’s clean energy future.
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