Wood Chips Market

Wood Chips Market Size (2024-2029):

The Global Wood Chips Market size was valued at US$ 11.73 billion in 2023 and is anticipated to reach US$ 18.41 billion by 2029 and increase at a CAGR of 7.80% between 2024 and 2029.

Market Overview:

The Wood chips market has been developing faster with considerable growth rates over the last few years, and it is anticipated to increase significantly during the forecast period, Because of the increasing utilization of renewable energy resources. In addition, the escalating demand for thermal energy generation using renewable and green feedstock materials is expected to help the sector. During the forecast period, the enhanced energy coefficient of wood chips is predicted to keep demand strong. Woodchips are little pieces of wood. Primarily used elements to create wood chips include branches, stumps, roots, and trees, as well as logs and wood debris. To repair the environment, woodchips are often used in gardens, orchards, degrading bioreactors, and organic mulch. Wood chips are small-to-medium-sized wood bits formed by cutting and chipping large chunks into small-to-medium-sized pieces, such as trees, logging debris, branches, roots, stumps, and wood waste. Moreover, depending on the type of wood chip processing, each chipper has a specific purpose. Tree branches, treetops, and unsaleable items come under reclaimed resources used to make wood chips.

Market Drivers:

The increasing availability of wood chips as a source of energy and heating in the residential sector worldwide is a primary driver for the wood chips industry. In addition, the wood chips market is being driven by rising demand for wood chips as a composting material and increased use of woodchips as a solid biomass fuel and raw material for manufacturing wood pulp in pulp mills. Furthermore, nanocrystalline cellulose (NCC), made from wood pulp, in next-generation flexible electronic displays as the newest wonder material in several electronic sectors, is also a potential prospect for the wood chips market. The need for wood chips has increased dramatically due to increased demand from the pulp industry, which utilizes wood chips as a raw material in creating pulp. Furthermore, due to the depletion of conventional energy sources, the wood chips market is being boosted by factors including renewable energy sources such as biomass. Wood pellets, which have become popular as a substitute for these chips, pose a severe threat to the industry. Wood chips are a biomass solid fuel that can also make wood pulp raw material. In addition, these are also utilized in various segments namely landscaping, gardening, ecosystem restoration, and many others. Moreover, wood chips are primarily manufactured from waste wood, residual wood, and pulpwood from the agricultural sector. Woodchips can also be created from forestry waste such as crowns, limbs, unsaleable components, and stunted trees. Although wood chips have some benefits, their widespread usage could jeopardize the stability and long-term growth of the forests from which they are harvested. Furthermore, during the projection period, high pellet penetration in power production in the residential and commercial sectors could impede market growth.

Furthermore, the market is predicted to grow as sustainable production practices for wood growing and processing become more common. In addition, the presence of tight regulatory regimes in countries is expected to increase the demand for wood chips. Furthermore, consumer awareness of the products' use in home heating solutions is projected to drive the market forward. Softwood and hardwood variants of wood chips are commonly encountered, depending on the product. Increasing demand for the products such as garden mulch and other applications such as playground surfacing is projected to fuel the market during the forecast period. In addition, the high carbon content of hardwood-based goods is predicted to stimulate demand during the projection period.

Market Restraints:

The growing use of wood pellets for electricity generation in the residential and commercial sectors limits the market's growth. During the forecast period, the wood chips market is anticipated to be hampered by the requirement for sustainability-related certifications and restrictions imposed on GHG emissions from wood chips when used for energy generation.

WOOD CHIPS MARKET REPORT COVERAGE:

Market Segmentation:

Wood Chips Market - By Product Type:

• Hardwood
• Softwood
• Manual 

Based on product type, Due to increased demand for softwood products for gardening mulch and playgrounds surfacing worldwide, the softwood sector is expected to dominate the global wood chips market.

Wood Chips Market - By Variety Type:

• Forest chips
• Wood residue chips
• Recycled chips

Due to the rising usage of forest chips in the residential sector due to their high carbon content worldwide, the segment is expected to lead the global market based on various varieties.

Wood Chips Market - By Application:

• Household Furnishing
• Combined Heat and Power (CHP)

Based on application, the combined heat and power market is anticipated to have the most significant global wood chips market share during the forecast period due to the increasing usage of the product as fuel, primarily in combined heat and power applications. Combined Heat and Power is defined as an energy-efficient system that is utilized for generating electricity. It absorbs waste heat to produce useable thermal energy—such as steam or hot water—for space heating, cooling, home hot water, and industrial activities.

Market Regional Analysis: 

The Global Wood Chips Market Report includes the segmentation of Regions:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Asia-Pacific plays a dominant role in the wood chips market, owing to the rising use of wood chips in the residential sector in emerging economies. Another element boosting market expansion in this area is the emergence of enhanced technology in businesses.

Europe is anticipated to have significant global wood chips market growth because wood chips have been utilized for heat and generating power on a small scale in European regions.

North America is estimated to increase at a CAGR during the forecast period. This is because of the increasing preference for wood chips in the U.S. and Canada.

The Middle East and Africa wood chips market is expected to increase in the following years. Furthermore, this region's global wood chips market is expected to grow as the importance of sustainable production procedures for wood planting and processing produces.

Impact of COVID-19 on Wood Chips Market:

Many wood chip industries have had to suspend operations due to the COVID-19 (coronavirus) epidemic to preserve social distancing. The activities for the wood chips market were affected as a result of this. In addition, the power sector is one of the industries that has been impacted by the statewide lockdown that has been declared in several countries. Due to supply chain disruptions with solar and wind projects, a lack of staff, and challenges with project funding, lockouts have caused delays in power projects. On the other hand, restriction on trade fairs and cross-border trading is predicted to stifle growth in the forecast year.

Market Key Players:

The companies covered in the report include:

1. Cogent Fibre
2. Enviva Pellets
3. St. Boniface Pallet
4. American Wood Resources
5. EVOWORLD GmbH
6. Mitsui & Co., Ltd.
7. Oji Holdings
8. Rentech
9. Axpo Group
10. Great Northern Timber.

Market Recent Developments:

• Many MDF producers prefer Cogent Fibre's pine softwood and mixed hardwood chips because of their high quality and consistent supply. Cogent Fibre's consistency and professionalism have earned the trust of companies like Georgia Pacific, Mead Westvaco, and Rayonier.
• On 24 July 2017, Enviva, the world's largest wood pellet manufacturer, revealed its most recent proprietary Track & Trace forestry data, demonstrating its continued commitment to a sustainable and transparent supply chain. These figures are another essential instrument for assessing and proving Enviva's commitment to sustainability in the Southeast.