Australia Wood Pellet Market Report and Forecast 2025-2034

According to this report, the Australia wood pellet market size reached around USD 520.60 million in 2024. Aided by the increasing demand for renewable, eco-friendly energy sources and the rising adoption of biomass heating solutions, the market is projected to grow at a CAGR of 4.90% between 2025 and 2034 to attain nearly USD 844.3 million by 2034.

The Australia wood pellet market growth is being driven by an increasing demand for renewable energy sources and environmentally friendly heating solutions. Wood pellets, a form of biomass fuel made from compressed wood waste, are becoming an increasingly popular alternative to traditional fossil fuels. As global awareness of climate change grows, there is a shift towards cleaner, more sustainable energy sources, and Australia is no exception. Wood pellets are seen as a viable option for reducing carbon emissions, providing a renewable, carbon-neutral fuel source that can be used for heating, power generation, and even as a feedstock in various industrial processes.

The Australia wood pellet market expansion is largely attributed to the growing interest in biomass energy as part of the country’s broader efforts to transition to renewable energy. Wood pellets offer an efficient and sustainable solution for households, businesses, and industries looking to reduce their carbon footprint and embrace greener alternatives.

In addition to their environmental benefits, wood pellets are often more cost-effective than traditional heating fuels such as natural gas, oil, and coal, making them an attractive option for those seeking affordable energy solutions. With the Australian government setting ambitious renewable energy targets, the market is poised to grow, particularly as more consumers and businesses seek to meet these sustainability goals.

Australia’s wood pellet production is concentrated in regions with abundant forest resources, where sawmills and other wood processing industries generate large amounts of wood waste. This waste material is then processed into pellets, making it an efficient way to utilise what would otherwise be discarded. The availability of raw materials is one of the key factors driving the Australia wood pellet market development, as it allows for the production of pellets at a competitive price. Furthermore, the sustainable sourcing of wood waste and the minimal environmental impact of the production process make wood pellets an appealing choice for eco-conscious consumers and businesses alike.

As per the Australia wood pellet market analysis, the use of wood pellets for residential heating is particularly popular in areas of Australia that experience colder winters, where the demand for heating solutions is higher. Pellet stoves and boilers are becoming more common in these regions, offering a reliable, cost-effective, and sustainable heating option.

Unlike traditional heating methods, wood pellet stoves and boilers produce fewer emissions and offer a higher efficiency rate, which helps homeowners and businesses reduce both their energy costs and environmental impact. The convenience of automated feeding systems in modern pellet stoves and boilers has further increased their appeal, making them easier to use and maintain.

In addition to residential heating, wood pellets are gaining traction as a source of fuel for industrial processes, including power generation. Large-scale power plants are increasingly turning to wood pellets as a biomass fuel to reduce their reliance on coal and other non-renewable energy sources. Australia’s commitment to reducing carbon emissions and increasing the share of renewable energy in its energy mix is boosting the Australia wood pellet market revenue. Wood pellets offer a sustainable, low-carbon alternative to coal and have been successfully integrated into many power plants worldwide, providing a reliable and renewable energy source.

The export potential of Australian wood pellets is also creating lucrative Australia wood pellet market opportunities. As countries around the world seek to reduce their carbon emissions and transition to cleaner energy sources, the demand for biomass fuels such as wood pellets is increasing. Australia’s geographical location and access to global shipping routes make it well-positioned to export wood pellets to key international markets, particularly in Asia and Europe, where the demand for renewable energy sources is high. The export of wood pellets has the potential to become a significant contributor to the Australian economy, providing a new revenue stream for producers and further boosting the growth of the domestic market.

Despite the promising Australia wood pellet market outlook, there are challenges that need to be addressed. One of the primary concerns is the sustainability of raw material sourcing. While wood pellets are considered a renewable energy source, it is important to ensure that the wood waste used in pellet production is sustainably sourced and does not contribute to deforestation or environmental degradation.

Industry stakeholders are increasingly focused on sourcing raw materials from certified sustainable sources and implementing best practices in production to mitigate these concerns. Certification schemes such as the Forest Stewardship Council (FSC) are playing a critical role in ensuring that wood pellet production remains environmentally responsible.

Another challenge facing the Australia wood pellet market is competition from other renewable energy sources, such as solar, wind, and hydroelectric power. While wood pellets offer significant environmental benefits, they are not the only renewable energy option available. The growth of other renewable energy technologies and the decreasing costs of solar and wind energy could pose competition for the wood pellet market. However, the complementary nature of biomass with other renewable energy sources means that wood pellets can still play a crucial role in Australia’s energy transition, particularly in areas where solar and wind energy may not be as viable.

In addition to these challenges, the cost of wood pellets can fluctuate depending on factors such as production capacity, raw material availability, and transportation costs. While wood pellets are generally considered cost-effective, these price fluctuations could impact their competitiveness compared to other energy sources. However, as the Australia wood pellet market matures and economies of scale are realised, it is expected that the cost of production will decrease, making wood pellets even more accessible to a wider range of consumers and businesses.

Market Segmentation

The market can be divided based on feedstock type, application, end use, and region.

Market Breakup by Feedstock Type

• Forest and Wood Waste Resources
• Agricultural Residue
• Others

Market Breakup by Application

• Combined Heat and Power (CHP)
• Commercial Heating
• Power Plants
• Residential Heating
• Others

Market Breakup by End Use

• Commercial
• Residential
• Industrial

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Competitive Landscape

The report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the Australia wood pellet market.

Some of the major players explored in the report are as follows:

• Pellet Heaters Australia
• Pellet Experts Pty Ltd
• EcoPellets Tasmania
• Renewable Wood Pellets
• Wood Pellets Tasmania Pty Ltd
• Vios Pellets Pty Ltd
• Others