Wood pellets market in the United States

Earlier Report Observations

From 2018 to 2023, U.S. wood pellet production increased from 7 468 thousand tons to 9 821 thousand tons, while exports surged from 6 017 thousand tons to 9 541 thousand tons. This expansion was driven by growing global demand for biomass as a replacement for coal in power generation, bolstered by U.S. policy support including a $100 million Department of Energy funding program announced in 2023 to develop advanced biomass supply chains. The entry of new producers such as Canfor and Energex added capacity, and industrial applications in food processing, drying, and manufacturing created additional outlets for pellets.

Despite rising output, the domestic market volume contracted from 1 672 thousand tons in 2018 to 457 thousand tons in 2023. This decline reflected a strategic shift of supply toward export markets, accelerated by long-term offtake agreements like the multi-year deal between Drax Group and Pathway Energy in 2024 to supply over 1 million tonnes annually for sustainable aviation fuel production. Consumer preference for renewable heating and rising primary fuel prices continued to underpin domestic consumption in residential and industrial segments, but the rapid growth in exports consistently outpaced local demand.

In value terms, production rose from $1 005 million in 2018 to $1 805 million in 2023, whereas the domestic market value fell from $240 million to $101 million. Favorable government incentives for renewable energy and technological advancements in biomass encouraged investment across the supply chain. Factors such as raw material availability from sawdust and wood waste, along with energy and labor costs, influenced production efficiency, but the overall market trajectory emphasized strengthening international trade linkages.

Production wood pellets in the United States

In kind, 2017-2020, K t

From 2017 to 2020, the United States was the world's largest producer of wood pellets.

Top producers of wood pellets, 2017-2020

World map of production of wood pellets, 2017-2020

Wood pellets production in the United States declined after two years of growth. In 2020, the country produced 8,412 K t of wood pellets, which was 2.1% lower than in 2019. Over the 2017-2020 period, production increased by 21.9%, with a compound annual growth rate of 6.8%. The highest production level was recorded in 2019 at 8,593 K t, which also saw the largest annual increase of 15.1%.

Annual dynamics of production in the United States in kind, 2017-2020, K t

In value, 2017-2020, M $ US

Following two years of gains, wood pellets production in the United States declined in value terms. In 2020, the output was valued at 1,138 M $ US, representing a moderate year-over-year decrease of 3.6%. Between 2017 and 2020, production value increased by 27.3%, translating to an annualized growth rate of 8.4%. The peak value occurred in 2019 at 1,181 M $ US, which also experienced the largest annual increase of 17.5%.

Annual dynamics of production in the United States in value, 2017-2020, M $ US

Exports wood pellets from the United States

Exports in kind, K t

Wood pellets exports from the United States increased for the third consecutive year. In 2020, exports reached 7,257 K t, marking a 5.8% rise compared to 2019. Over the 2017-2020 period, exports grew by 41%, with a compound annual growth rate of 12.1%.

Annual dynamics of product's exports from the United States in kind, 2017-2020, K t

From 2017 to 2020, the United Kingdom remained the primary destination for U.S. wood pellets exports in kind, accounting for 78.3% of total flows, while the remaining volume was distributed across various other markets.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from the United States in kind, 2017-2020

Exports in value, M $ US

Foreign wood pellets supplies from the United States increased for the third year in a row. In 2020, exports were valued at 981.6 M $ US, showing a moderate advance of 4.1% compared to the previous year. Over the 2017-2020 period, export value rose by 47.2%, with a compound annual growth rate of 13.8%.

Annual dynamics of product's exports from the United States in value, 2017-2020, M $ US

During 2017-2020, the United Kingdom continued to be the main market for U.S. wood pellets exports in value terms, holding a 79.3% share of total flows, with the remainder fragmented among numerous other destinations.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from the United States in value, 2017-2020

Imports wood pellets to the United States

Imports in kind, K t

Wood pellets import volume into the United States declined for the second consecutive year. In 2020, the country imported 221 K t of wood pellets, which was 3.1% lower than in 2019. Over the 2017-2020 period, imports decreased by 3.1%, with a compound annual growth rate of -1.1%. The highest import volume was recorded in 2018 at 221 K t, which also saw the largest annual increase of 4.5%. The largest decline occurred in 2019 with a 4.3% drop.

Annual dynamics of product's imports to the United States in kind, 2017-2020, K t

From 2017 to 2020, the United States relied heavily on Canada for wood pellets imports in kind, with this market accounting for 99.2% of total imports.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to the United States in kind, 2017-2020

Imports in value, M $ US

Wood pellets shipments to the United States from abroad increased for the third consecutive year. In 2020, imports totaled 46.0 M $ US, up by 0.8% compared to 2019. Between 2017 and 2020, import value grew by 11.9%, equating to an annualized rate of 3.8%.

Annual dynamics of product's imports to the United States in value, 2017-2020, M $ US

Throughout 2017-2020, Canada dominated the geographical structure of wood pellets imports into the United States in value terms, representing 96.6% of total flows.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to the United States in value, 2017-2020