Wood Chips Market Size (2024 – 2030)

The Global Wood Chips Market was valued at USD 9.56 billion and is projected to reach a market size of USD 16.32 billion by the end of 2030. Over the forecast period of 2024-2030, the market is projected to grow at a CAGR of 7.93%.

The wood chips market contains the global trade of processed wood pieces, helping various industries such as pulp and paper, agriculture, and bioenergy. It involves the buying and selling of uneven timber produced from logging and wood processing processes. This market thrives on the demand for maintainable alternatives to fossil fuels and traditional wood products. Wood chips find applications in landscaping, animal bedding, and mulching. Factors driving market growth include increasing environmental concerns, the rise of renewable energy sources, and the growth of bio-based industries. Moreover, technological developments in wood processing contribute to market modification and improved product quality.

Key Market Insights:

The wood chips advertise is seeing relentless development, driven by different components over different businesses. Fundamentally, the request for maintainable and renewable vitality sources has moved the showcase forward, with wood chips playing a significant part in the biomass control era.

Moreover, the mash and paper industry remains a major buyer of wood chips universally, assisting in fueling advertising development. Advertise division uncovers key experiences into the sources and end-uses of wood chips. Wood chips can be sourced from timberland buildups, counting branches and tops, as well as from logs and wood handling squander. Each source presents one-of-a-kind focal points and challenges, contributing to the generally showcased elements.

Despite its promising development direction, the wood chips showcase faces a few challenges that require vital contemplation. In addition, competition from other biomass sources, such as agrarian buildups and vitality crops, poses a challenge to showcase entrance. As partners prioritize supportability and grasp imaginative arrangements, the wood chips advertise is balanced to play an urgent part in the assembly of the developing request for renewable assets while tending to natural objectives.

Wood Chips Market Drivers:

Increasing demand for Paper and Pulp Industry.

The rise of e-commerce and expanding shopper requests for bundled merchandise, particularly in divisions such as nourishment and refreshments, hardware, and pharmaceuticals, is fueling the request for paper-based bundling. Despite digitalization, the printing and distributing industry proceeds to require paper items, such as daily papers, magazines, books, and limited-time materials. This, in turn, drives the requirement for wood chips as an essential crude fabric for paper and cardboard generation. Wood chips are fundamental for creating different sorts of printing papers and claim-to-fame papers. 

Wood chips are utilized to fabricate built wood items such as particleboards, fiberboards, and arranged strand sheets (OSB) in the Development industry.

The demand for wood chips inside the development industry stems from their vital part in the generation of different built wood items, counting particleboards, fiberboards, and arranged strand sheets (OSB). Furthermore, the worldwide move towards economical and ecologically neighborly building hones has altogether supported the request for wood-based development materials. This drift is driven by a developing accentuation on green building certifications and eco-friendly development guidelines. Wood chips, as a renewable and biodegradable asset, adjust superbly with these green building standards, assist impelling their appropriation in development ventures around the world.

Governments globally are passing arrangements to relieve climate alteration, emphasizing the utilization of renewable assets like wood chips.

Climate alter moderation has gotten to be a fundamental concern for governments universally, provoking the sanctioning of exacting approaches aimed at reducing carbon outflows and promoting economic hones. Wood chips, determined from reasonably managed woodlands, have risen as a favored choice due to their renewable nature and carbon-neutral properties. Besides, the surge in buyer and corporate awareness concerning natural sustainability has driven an increased preference for items sourced from certified economical practices. Governments are incentivizing businesses to move towards a biomass-based energy era and naturally inviting materials, in this way driving up the request for wood chips.

Wood Chips Market Restraints and Challenges:

The extraction of wood chips from woodlands carries a multifaceted natural effect that resounds over environments.

Categorization exercises, frequently vital for wood chip generation, can lead to deforestation, a preparation that not as it were changes scenes but too jeopardizes the fragile adjustment of environments. In addition, deforestation for wood chips regularly comes about environmental misfortune for various species of plants and animals. The expulsion of trees for wood chips not as it were decreases the carbon sequestration capacity of woodlands, contributing to climate alteration, but also poses a coordinated risk to biodiversity. This misfortune of territory parts biological systems makes it challenging for species to discover reasonable ranges for settling, scrounging, and breeding. The requirement for economical ranger service hones and mindful sourcing of wood chips is vital to moderate these antagonistic natural impacts and protect the biological keenness of woodlands for future eras. 

Wood Chips Market Opportunities:

The global energy landscape is undergoing a profound transformation as countries around the world strive to transition to sustainable and renewable energy sources.

In this paradigm shift, wood chips have become a central element in the biomass energy production sector, providing a flexible and environmentally friendly solution to meet the growing energy demand. The use of wood chips in biomass energy production is an important step towards energy independence and reduced dependence on limited fossil fuel resources. Wood chips are an important raw material for biomass power plants, where they are used to produce both electricity and heat through efficient and sustainable processes. Governments around the world have recognized the urgent need to accelerate the transition to cleaner energy sources and have therefore implemented a series of support measures to promote investment in energy infrastructure. Additionally, the global focus on reducing carbon emissions and mitigating the adverse effects of climate change has further boosted demand for biomass-based energy solutions, in which wood chips play an important role.

WOOD CHIPS MARKET REPORT COVERAGE:

Wood Chips Market Segmentation: By Product Type

• Hardwood

• Softwood

• Biomass Chips

In the vast world of wood chips, different types offer different benefits. Hardwood pieces, from sturdy trees like oak and maple, are sturdy and durable. On the other hand, softwood chips are made from lighter trees such as pine and fir. These types of softwood chips have the greatest value in the woodchip market by product type, often used in the production of newsprint, cardboard, and tissue paper.

However, the growth highlight is biomass chips, which are expected to witness the fastest growth during the forecast period. These chips, made from various types of wood, are essential for biomass energy production, thus strengthening the greener aspect of the market.

Wood Chips Market Segmentation: By Application

• Pulp and Paper Industry

• Residential Heating

• Chemical Industry

• Others

When it comes to where these pieces of wood find their home, it's a diverse application landscape. The pulp and paper industry is the largest segment, using wood chips as a foundation to create a variety of paper products.

 Another important area is residential heating, where wood chips play an important role in providing a sustainable heat source for homes. This segment is expected to witness the fastest growth during the forecast period as more households switch to environmentally friendly heating options. In addition, the chemical industry considers wood chips a valuable resource for the production of chemical pulp and other biological materials. Other applications, from landscaping to animal husbandry, demonstrate the versatility of these chips in everyday life.

Wood Chips Market Segmentation: Regional Analysis

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

In 2023, the Asia Pacific region dominates the wood chip market with a revenue of 42%. The demand for wood chips in large territories in Asia-Pacific is where the demand is greatest. This area is the largest consumer, with industries and homes depending on these wooden wonders.

 However, across the ocean, North America is predicted to be the fastest-growing region. Thanks to technological advances and a growing emphasis on renewable energy, It is a story of two continents, each with its rhythm in the symphony of wood chips. From the jungles of North America to the bustling paper mills of Asia-Pacific, wood chips travel around the world, meeting diverse needs along the way.

Meanwhile, Europe is in the spotlight during the forecast period. From powering biomass power plants to bringing warmth to homes, these humble chips play a vital role in a variety of industries. As sustainability takes center stage, European countries are increasingly adopting wood chips for energy production, paper production, and environmentally friendly construction practices.  Finally, the Middle East and Africa region, although smaller by comparison, is experiencing a steady increase in the use of wood chips for various industrial and agricultural applications.

COVID-19 Impact Analysis on the Wood Chip Market:

The COVID-19 pandemic has posed challenges for the wood chip market, affecting supply chains and demand dynamics. Barriers and travel restrictions have disrupted transportation networks, causing delays in the transportation of wood chips. Reduced industrial activity has led to lower demand, especially in the construction and manufacturing sectors. The pulp and paper industry, a major consumer of wood chips, has seen demand for paper products decline due to office and business closures. Fluctuations in energy consumption have led to demand instability for biomass power plants.

Despite these challenges, the biomass energy industry has proven resilient thanks to government support for renewable energy sources. Price fluctuations have made business planning difficult, leading to delays in investment and expansion projects. However, the pandemic has highlighted the importance of sustainability, leading to a gradual shift to environmentally friendly materials such as wood chips. The adoption of remote technologies has made it easier to maintain operations with minimal on-site labor. As the economy reopens and industrial activities resume, the wood chip market is poised to recover, with the construction sector expected to drive demand. Continued focus on renewable energy and supply chain diversification are key trends shaping the future outlook of the market.

Latest Trends/ Developments:

The Wood Chips Market is undergoing significant transformations driven by evolving consumer demands and industry innovations. A key trend is the increasing emphasis on sustainable sourcing practices, with consumers prioritizing wood chips derived from responsibly managed forests. This reflects a broader shift towards eco-friendly products in response to growing environmental concerns. Furthermore, there is a notable surge in the utilization of biomass chips, particularly in renewable energy applications such as bioenergy plants and biomass power stations. This highlights a growing interest in alternative energy sources and the potential of biomass as a viable solution.

In the residential sector, wood chips are gaining traction as a cost-effective and environmentally friendly heating option, especially in regions with prevalent wood-burning stove and boiler usage. This reflects consumers' desire for efficient yet sustainable heating solutions. Manufacturers are also diversifying their product offerings to cater to specific industry needs, including hardwood chips for high-energy content and specialized chips for various industrial applications. Technological advancements in wood processing are further enhancing production efficiency and product quality. Moreover, the Asia-Pacific region is witnessing significant market expansion, driven by industrial growth and increasing demand from sectors such as pulp and paper and biomass energy. Collaborative efforts towards sustainability, including responsible forest management and certification programs, are also shaping the industry landscape, emphasizing the importance of environmental stewardship throughout the supply chain.

Key Players:

1. Axpo Group

2. Boniface Pallet Company Ltd

3. Chip Chip

4. Enviva Pellets

5. American Wood Resources

6. EVOWORLD GmbH

7. Great Northern Timber

8. Mitsui & Co., Ltd.

9. Oji Holdings

10. Orsted A/S

• In 2024, a consortium of energy companies, including Bio Power Ltd., Eco Fuel Solutions, and Green Energize, collaborated to develop biomass power plants using wood chips. The consortium aims to invest $50 million collectively to establish five biomass power plants across Europe by 2026.

• In 2023, Enviva, a leading global producer of wood pellets, acquired Green Circle Bio Energy, a major producer of wood chips for renewable energy. The deal aimed to expand Enviva's portfolio into the wood chip market. The acquisition boosted Enviva's annual wood chip production capacity by over 1 million tons.